As we say goodbye to 2024 and welcome in 2025, it’s a good time to catch up on the very best of some of the Herald columnists we enjoyed reading over the last 12 months. From politics to business, these are some of the voices and views our audience loved
I own a $1.1m home and have $530k, will I have to keep working? - Mary Holm
There's much to enjoy about the retirement years - and you don't need a million dollars to do so. Photo / 123rf
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Will I have enough to retire or will I have to go back to work fulltime, although I have only worked part-time for the past 20 years? Do I get boarders? I do not spend a lot, but with insurance, rates and car repairs etc, I worry about my future.
I just checked a New Zealand website and it suggested I need $1.1m in the bank to retire comfortably.
A: You’ve got enough else to think about without worrying about your finances. And you probably don’t need to.
I get cross with statements that you need a million dollars to retire comfortably. Take a look at who is saying these things. It’s almost always someone who will gain if you use their products or services to grow your savings - or in some cases not grow your savings, as not all the “help” out there is good.
If the million-dollar estimate were correct, a huge proportion of New Zealand retirees with much smaller savings would be miserable. And they’re not.
The best way to get an idea of where you stand is to use the retirement calculator on sorted.org.nz. That website is run by the Retirement Commission, not someone trying to get your business. It takes into account New Zealand Superannuation and 2 per cent inflation. I think you’ll find that you are not badly off. Read more >
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My husband is worried our $4m isn’t enough to retire on - January 27, 2024
Q: My husband is 69. He is starting to have a few health issues and I want him to retire. He thinks we can’t afford it and that I’ll be penniless and living in my car if he dies.
I want us to sell up. We will have a mortgage-free home and about $4 million in the bank. I think this is enough. Please advise.
A: I sometimes get complaints from readers that too many letters in this column are from wealthy people, despite the fact that I try to favour letters from people with average wealth or less. But – and please don’t be hurt by this – your letter takes the cake! Or rather, your husband’s attitude takes the cake.
Perhaps he was raised by parents who went through hard times in the Great Depression of the early 1930s, or he faced hardship earlier in his life. But clearly that no longer applies. While some people have too much of a “she’ll be right” attitude to funding their retirement, your husband is way too cautious.
A fairly conservative way to estimate how long your retirement savings will last is: for every $100,000 you have saved, you can spend $100 a week. For example, if you have saved $300,000, you can spend $300 a week, and your savings should last as long as you do. That’s on top of NZ Super.
That calculation assumes you both stop work at 65. Assuming you are both older than that, you would have more to spend each year.
But putting that aside, you have 40 lots of $100,000. So you could spend 40 times $100, or $4000, a week. That is indeed enough. Time to put your feet up, hubby! Read more >
What happens to your KiwiSaver money when you die - September 7, 2024
Q: When I was asking an ANZ KiwiSaver specialist adviser what happens to my KiwiSaver funds on my death, they told me a disturbing story of how my wife can’t simply access my KiwiSaver.
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I was given an example of how a husband’s ANZ KiwiSaver funds are being held in a solicitor’s trust account and denied to his wife for over a year so far, due to time taken to obtain probate, despite his very normal and uncontested will leaving everything to her.
I suspect many a retired husband is looking after the family capital in KiwiSaver in his own name, expecting that the conditions of his will would release the money soon after his death. What advice would you give to prevent spouses being denied access to possibly the only funds they have?
A: You may well be right about people’s expectations. And this issue doesn’t apply just to retired people, but everyone at every age. Nor does it apply only to KiwiSaver investments. Thanks for raising an important point.
I suggest every couple reading this talks today about how each of them would cope financially if the other person dies. Ideally, each partner has enough money in their own name to manage expenses while the estate is being sorted. Read more >
Whatever happened to the $20m Lotto winner? - August 24, 2024
Q: I had a small Lotto win late last year – approximately $25,000 from memory. Paid off the credit card which took half of it, then upgraded my already-booked cabin on a cruise. Friend’s partner was quite wealthy so I took the liberty of asking how he gained his wealth? He won $20 million on Lotto – gave half to his wife at the time and then she did a runner (as you would!). He invested in a couple of properties and a sportscar. He then had a stroke which changed his personality where he just sat around the house watching TV all day, so my friend ended up leaving him (just as well she had kept her own house as a rental). So you have to be in to win (i.e. buy a ticket)!
A: Gosh, Lotto is the topic that keeps on giving. There are so many different takes on it.
I like what you did with your winnings, especially getting rid of that credit card debt. Please don’t run it up again! The interest is such a financial killer. I hope the cruise was fun.
However, I’m not sure the story of your friend’s partner will inspire others to “be in to win”! Your letter underlines my earlier point, that winning a relatively small amount is great, but a huge win often doesn’t seem to buy happiness. Read more >
Should I ditch KiwiSaver for term deposits? - June 15, 2024
Q: I’m 76 and had $120,000 in ASB’s Moderate KiwiSaver Fund four years ago. After losing about $10,000 12 months ago, I converted to their Conservative Fund, not wanting any more downward fluctuations.
Since January 2024, when I began monitoring my balance, it has gone up, then down over a $1000 range. I don’t need the funds currently, but am dismayed at the lack of progress, especially when bank fixed deposit rates are about 6 per cent, returning about $7000 less tax. What to do?
A: Your numbers don’t seem right. The Smart Investor tool on sorted.org.nz tells us that ASB’s Moderate Fund reported losses of minus 1 per cent after fees and tax in the year ending March 2022, and minus 1.7 per cent in the following year – about average for funds in that risk category.
They were not good years. But those two losses should have reduced your balance by around $3000 to $4000 in total, not $10,000. What’s more, the previous year the fund grew by a very healthy 12.1 per cent after fees and tax. So your balance should be well ahead of your initial $120,000. (In the latest year, the return was 8.4 per cent – but you were out of the fund by then.)
You might want to check your numbers, and ask ASB for clarification if you’re in doubt.
The broader point, though, is that – unlike many things in life – it’s not wise to watch your KiwiSaver balance closely. Once a year, when your annual statement arrives, is often enough – although even one-year performance is pretty meaningless. To get a good feel for how a fund is doing, it’s best to look over 10 years or more. Read more >
