Your money: Fear biggest hurdle on retirement road

Are you having difficulty deciding the best place to save your hard-earned money for retirement? Are you worried about who to talk to, who to trust and whether you know the right questions to ask?

Three publications from the Retirement Commissioner called How to Pick an Investment, Test Before You Invest and Your Retirement Action Planner help answer some important questions for beginner investors, and offer a three-step approach to help you work out how to decide the best saving option for you and who to talk to.

"People tell us that one of the most difficult aspects of financial planning for retirement is deciding where to put their money," says Retirement Commissioner Colin Blair.

"Many people find the prospect of seeking professional advice daunting. They don't feel confident about the language of investment, and they worry they will make the wrong decision because they don't understand the information they are given.

"Unfortunately, this often means people's concerns about making a bad investment choice prevent them from making any decision at all except the decision to do nothing."

The information provided by the commissioner is designed to help you feel more confident about making your saving and investment decisions and to understand some of the language and concepts you are likely to come across as you work through your options.

"In the end, you are the best person to decide the right savings plan for you. But one of the secrets to making a good decision is taking the time to understand as much as you can about the options you are considering before signing on the dotted line."

Mr Blair says the first step to deciding where to put your money is to think about what you want your money to do.

"For most people, the overall objective will be to invest their regular savings so they enjoy reasonable returns, without taking what they consider to be unacceptable risk. Above all else, the average New Zealander simply wants a relatively safe haven for their hard-earned savings that will see the real value of their money maintained."

Mr Blair says you should aim to have a savings plan that meets your needs in:

The risk you are comfortable with.

The returns you expect.

Allowing you access to an emergency fund to meet any unexpected, urgent requirements.

The commissioner has an important message about getting financial advice.

"In New Zealand anyone can describe themselves as an investment adviser or financial planner. You need to take reasonable steps to ensure that any person offering you savings or investment advice is suitably experienced and qualified.

"Unfortunately there is no guarantee of the quality of the advice you will receive. Be wary if an adviser is not a member of a professional organisation.

"This in itself is not a guarantee, but members of most organisations are subject to qualification requirements, codes of conduct and disciplinary complaints procedures."

Mr Blair says that with a basic understanding of saving and investment, and armed with a good understanding of what you want to achieve with your plan, people can feel much more confident in talking to the professionals about savings options.

"It is important that people don't put off saving because of a reluctance to make a commitment to a savings product. The information in our publications and on our web site can help people feel much more confident about making a start."

* For more information about how to pick an investment or make a financial plan for retirement, call 0800 45 65 85 or visit www.retirement.org.nz