Budgeting for seniors
Retiring in Aotearoa? Learn vital budgeting strategies tailored for New Zealand seniors and achieve financial stability
Budgeting Summary
Retirement should be a time of relaxation, celebration, and security. For seniors in New Zealand, understanding the local financial landscape is crucial. This guide offers an introduction to essential budgeting tailored for Kiwi seniors. New Zealand is beautiful and a paradise for many to retire in. We encourage you to enjoy your senior years by practicing good budgeting advice so you may live happily in this paradise.
We discuss the various income sources for seniors such as; NZ Super, Kiwisaver, various passive incomes while reminding you that you don’t have to retire at 65 years old.
Following this we look at some budgeting strategies and where you are likely to be able to save money.
Income sources for seniors
New Zealand Superannuation: This is an important income source for most seniors in NZ. If you are yet to retire, make sure you set yourself up so that you are eligible to receive this retirement income. This will provide you a steady income to meet all your needs.
KiwiSaver: When you turn 65 you are entitled to draw from this saving initiative. Be wise in drawing too much down at one time as wasting the money away. It is better to strategically use these funds when needed.
Passive Incomes: Incomes from stocks, real estate can provide you are good income on top of your superannuation. Remember that NZ Superannuation is not asset nor income tested, so getting income from other sources will not affect your eligibility.
Wages: Reaching 65 doesn’t mean you have to retire. You can continue working either full or part time. You can still get NZ Super. Most people get considerable satisfaction from working, so it is worthwhile to consider working either full or part time after you turn 65 years old. If you are able it is a great way to build up more saving for later in life.
Addition Government Support: NZ provides a lot of additional support that you can receive. Visit government websites and see what other support is available. Examples are additional housing assistance and winter energy payments. However, above that there are plenty of other support options available.
Budgeting Strategies
1. Recognising Priorities:
- Fixed vs. Flexible: Begin by categorising your expenses into fixed (rent/mortgage, utilities, insurance) and flexible (dining out, entertainment, travel). Knowing where your money must go versus where it could go is pivotal.
- Needs vs. Wants: Revisiting this age-old budgeting principle becomes essential in retirement. Ensure necessities are covered before allocating funds for luxuries.
2. Creating a Tangible Monthly Plan:
- Write It Down: Whether on paper, a computer, or a budgeting app: physically seeing where your money goes can be enlightening.
- Review Regularly: At the end of each month, review your budget. Where did you spend more? Where did you save? Adjustments are part of the process.
- Cater for Seasonal Changes: In New Zealand, different seasons may bring about varying expenses, such as higher energy bills in winter or increased travel in summer. Anticipate and plan for these changes.
3. Future Planning:
- Anticipating Healthcare Needs: As we age, health can become unpredictable. Setting aside funds for potential medical needs will reduce financial stress later.
- Living Arrangements: Consider potential changes in the future, such as downsizing, moving in with family or home help.
- Leisure and Travel: Perhaps you’ve dreamed of visiting the South Island or exploring more of the North. Setting aside a specific fund for these dreams can make them achievable without straining your regular budget. If you have the funds, overseas travel is also an option or maybe even a cruise.
Saving Money: Where to cut costs
Healthcare: Keep fit, eat well and stay stress free. It will not only give you a much better life but also will reduce healthcare costs considerably. Regularly go to the doctor: it’s better to catch potential issues early, before they become expensive and risky to fix. Consider overseas health care options, such as overseas dental trips (where you can have a holiday and get a dental procedure done at the same time). Remember that the NZ government has emergency funding in certain situations, so also good to check if available for your situation.
Groceries: Buying produce in season is not only fresher but also cheaper. Familiarise yourself with seasonal produce in New Zealand and plan meals around them. Shop your general groceries at the lower cost supermarkets such as Pakn & Save. However, note that you can also get good discounts at the more expensive supermarkets, so keep that in mind.
Transportation: Most NZ cities provide free off-peak public transportation for those who have a SuperGold Card. Travel around and explore the city with this benefit. For short distances consider walking or cycling. It’s good for both your health and wallet. No need to rush from here to there, live in the moment and enjoy NZ.
Utilities: Buy energy-efficient bulbs and appliances. They will save you money in the long run. If you are on NZ Super you will get a Winter Energy Allowance to help you keep you house warm. Also get out and enjoy the warm library or other public buildings.
Leisure and Entertainment: There are plenty of free community events that local councils or groups host. Keep an eye out for them and get involved. There are group discounts available so make use of them. Remember also the Super Gold Card provides discounted access to many venues.
Household and Maintenance: Before hiring someone for repairs, see if it’s something you can do yourself. There are plenty of online resources and community classes that teach basic home maintenance skills. If you house is too big, consider selling it for a smaller place or renting a room out.
In conclusion there are many things you can do to reduce your costs and increase your income. The best investments is to invest in your health. You will not only be happier, but it will help reduce your future health burden. Stay engaged with community groups, have a purpose and keep using your mind and body to stay healthy.