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68 in 2038 - how to be financially secure

Posted to Financial Capability on 01-08-2018

65 plus woman generic

By Amy, aged 68

Happy New Year! 2038 began with a bang. Or rather, my car going bang, for the last time. Turns out hybrids have a shelf life. I won’t pour any more money into it. It’s time to go shares in an AV – autonomous vehicle. For a few dollars a month I can order one to take me to work, or out for the evening, or to meet a friend for lunch on the weekend, without the hassle of having to house it, find a park or maintain it. And I get to catch up on emails or read the news while it’s driving me where I want to go.

I could turn my garage into a games room for the grandchildren. Dorothy’s 4 and Arthur’s 6. They come and stay on Saturday night sometimes while my daughter and her partner go on a “date”. I made sure I downsized to a townhouse with a spare bedroom so I could have them over, but not so big that my son will feel comfortable staying too long the next time he breaks up with a girlfriend, or is “between jobs”. It gets expensive having him stay for too long. “Kippers” I think they’re called – Kids In Parents’ Pockets Eroding Retirement Savings.

I am planning to retire eventually. I invested the money I had left over from the family home so it will keep earning some interest to add to my KiwiSaver when I need it. Thank goodness I got into KiwiSaver soon after it came in, back in 2007. I only ever contributed 3%, but my employers put in 3% on top of my salary, and I contributed enough to get the government tax credit of $520 each year, and now there’s nearly $270,000 in there, earning compound interest as we speak. It’s the nest egg that keeps on growing. Since I’m still working I’ll wait as long as I can before I dip into it, considering I could live till my mid-90s!

My friend Sophie didn’t get into KiwiSaver, but she does own her own home. She says she’ll get a reverse mortgage when she stops working, and start “eating her house”, chipping away at her equity as she needs it. She’ll pay interest for the privilege but it won’t be taken out till she dies, which means her kids will get less inheritance. They say they don’t mind as long as mum’s happy and can manage financially.

I’m more concerned about my cousin Dan and his wife Sandra. They didn’t buy a house and both suspended their KiwiSaver payments when things were tight. They never restarted, and Dan was made redundant from his last job at 56. He was a construction supervisor, but so many houses now are built from kits or 3D printing. He’s in one of the government retraining programmes for people from the construction sector, learning how to supervise the new builds. At the start he was pretty grumpy about needing to upskill but now we can’t shut him up about the new technology; he wishes it had been around for the first half of his career.

I’m glad I can still work. I used to manage the cosmetics department at a department store, and chose to go down to three days a week a couple of years ago. I help out in the city salons for morning makeovers now – the fashion is so theatrical these days, all mauve eye shadow and glitter and big eyelashes – women prefer to get us to do it for them on their way to work. I’ve kept up with the technology too – the customers love creating holograms of themselves with different looks; we export them to their phones and they can take them away to show friends and family.

I like my colleagues and my customers, and there’s something nice about teaching the young ones tricks and techniques that I used in the 2010s. If they strike a problem applying or shaping something, they often ask me for advice. The money is handy too – I put some in my “rainy day” fund in case the solar power system needs fixing or the cat needs an operation. I save the rest for my next holiday – my daughter Ellie lives in England with her partner and my other three grandchildren, and I try to get over to visit them all once a year.

I have four days a week to myself, which is just right. I go to yoga, meet my book club for coffee once a week, and volunteer for the Look Good Feel Better charity, helping women with cancer get back on their feet – I show them some tricks with make-up to help them feel good about themselves again. It’s often the most rewarding time of my week.

I also visit my sister Rose in her retirement village. They have a great happy hour! She’s 75 and loves it there – gets involved in all the activities and clubs – and hassles me to move in too. I might one day, but the cost of getting in is high, and ongoing. I’d have to look more closely into the financial side.

I will have to have another talk to Rose about this chap she’s been emailing overseas. She’s always been a bit of a romantic, and was looking for company. She turned to one of those “match-maker” sites for older people. All of a sudden she’s in contact with some guy in America who reckons she’s the perfect woman and wants to come and visit her, but is broke and asking if she can send him money for airfares. It all sounds a bit dodgy – I’ve heard of people losing their life savings through these romance scams. I don’t want Rose to be one of them.

I’m happy enough on my own. I’ve been divorced for about 20 years and couldn’t imagine living with a man again – all those compromises! No, I have a very full life, enough money to be comfortable, and am looking forward to what could be another 30 years to enjoy it. Old age? Bring it on.

Next: Retirement Commissioner urges calm over KiwiSaver funds

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