As we move through life, our circumstances change. Whether it be from being two full-time working adults with no dependents to having a family with less income and little mouths to feed, or children getting older and becoming independent, or you’re getting older and looking at retirement. Changing circumstances can present challenges, risks, and opportunities.

Although the focus for many is day-to-day survival, it is important to also take a step back and think about the future. Questions to consider include;

• When do you want to retire?

• What lifestyle do you want in your retirement?

• How much and what type of assets will you need at retirement?

• What risks do I need to consider that could impact my retirement?

For many New Zealanders, working until our mid-60s is normal, and expected. However, what happens if we are unable to work until then? Being unable to work, and hence earn, due to health issues can have a significant impact on one’s ability to accumulate wealth.

There is financial assistance available, such as the Supported Living payment from WINZ, that can help but it may not be enough to keep your retirement plan on track. There are insurances such as income protection insurance that provide cover to a person if they suffer from an illness and are unable to work, ACC cover if an accident occurs, or Total & Permanent Disability cover which provides a lump sum in the event of certain health events being triggered.

A good start to planning your retirement is understanding your spending habits and lifestyle needs. Lifestyle is a personal choice, there is no right or wrong way to retire if you have the funds and are prepared. However, without this preparation you run significant risk of not having enough money or your money running out and having to compromise your desired life.

Our ability to earn and save whilst we are young has a huge impact on where we end up financially. The closer we get to retirement age, assuming everything is financially on track, the less risk there is if something goes wrong, and we can no longer work. So, as we progress through life, we should be reviewing our insurances and tweaking them as our circumstances change.

Once we reach retirement age, we can then be thinking about how to best protect our nest eggs. This covers not only protecting the purchasing power of our savings but also ensuring we are not putting it at risk of loss.

Planning for the future is important. Having a life plan is a great way to document how to mitigate the risks and take advantage of the opportunities. Regardless of your current circumstances and how they will change, what you do now will impact how and when you retire.

Talk to a financial planning expert to plan for the retirement you want.