Retirement planning. Facilitator s guide. brought to you by the commission for financial capability

Transcription

1 Retirement planning Facilitator s guide brought to you by the commission for financial capability

2 Welcome to the Facilitator s guide Thinking about retirement is the first step you need to take to achieve the lifestyle you want when you re no longer working. But what else do you need to do? Getting out of debt and saving for the long-term will both help you to be better off in your retirement. This Sorted seminar introduces your audience to retirement planning. The Facilitator s guide, has all the information you need to successfully deliver the seminar. The seminar will take hours during which participants will be given an opportunity to think about the kind of retirement they would like to have, and find out more about how different people manage in retirement. They ll think about different income sources in retirement and the value of getting out of debt and saving for the long-term before retirement. Participants will receive the free Sorted booklet Retirement planning. For any participants close to retirement, we recommend you also give them a copy of the free Sorted booklet Your money in retirement. If you have time, allow 1.5 hours so you can encourage discussion and make it possible for participants to ask questions. Disclaimer Presenters must agree not to give personal financial advice nor to promote or recommend any financial product when delivering this seminar. The information in this guide is generalised and current as of April Laws or policies may change at any time. This seminar should not be the only source of information when making financial decisions. It should be treated as a starting point before seeking professional advice. 2 Sorted Retirement planning Facilitator s guide

3 What s in this guide? Section A: Preparing for the seminar This section explains the things you need to do to prepare for this seminar from inviting participants to the materials you need to present effectively. The Sorted booklets and resources are available for free. The booklets should be ordered in advance. Section B: Presentation guide This section includes explanations you can use as the basis for a script for the presentation, suggested activities to help you to involve participants in the seminar and resources people can refer to for more information and help. Remember to order Sorted s booklets from sorted.org.nz/ordering at least four working days before the seminar. All of Sorted s booklets and resources are free. 3 Sorted Retirement planning Facilitator s guide

4 Section A: Preparing for the seminar Inviting participants Encourage participants to attend by explaining that they will learn about the steps they need to take now to achieve the lifestyle they want when they retire. They ll hear about how today s retirees are managing on different budgets. And they ll learn about the different sources of income in retirement (eg, NZ Super, savings and other forms of investment). Each participant will receive a copy of the Sorted booklet Retirement planning to keep. You may wish to keep the number of participants to between 12 and 16. As money matters are often shared within a household, you may want to consider giving participants the opportunity to bring a family member. Materials you need to present effectively You will need: The presentation. This can be downloaded for free from the Sorted website at sorted.org.nz/seminars. To run the presentation, you ll need a computer or mobile device with Adobe Reader connected to a projector or television, or an overhead projector with the presentation printed on transparencies. A whiteboard and marker (or similar) Pens and paper Sorted booklets see the next page. If you have Internet access, you will also be able to show the calculators and tools on sorted.org.nz during the seminar. This seminar is generalised, so it s important that you think about the ways you can make it more relevant to your audience: Is the audience young, middle aged, old? Are they nearing retirement or still a long way off? What sort of incomes do they earn? Have they started saving yet or not? Are they concerned about being able to save enough? What cultural values do they bring? Will you need to consider extended families and family obligations that may be different to yours? Read this guide and accompanying materials carefully and use the resources and tools on sorted. org.nz before presenting this seminar. Familiarity with the material and Sorted resources will help you to present this seminar well. 4 Sorted Retirement planning Facilitator s guide

5 Sorted.org.nz tools and calculators Familiarise yourself with the following calculators and tools on sorted.org.nz so if you have time, you can demonstrate them: Retirement planner KiwiSaver account calculator Debt calculator You can find all Sorted s calculators at sorted.org.nz/calculators. If you won t have Internet access during the seminar, consider printing screen grabs of some of these tools so participants can get an idea of how they work. Sorted booklets for participants order now Retirement planning Provide all participants with the Sorted booklet Retirement planning. This booklet is used during the seminar. Your money in retirement For participants close to retirement, you may wish to provide them with the free Sorted booklet Your money in retirement as well. This isn t used in the seminar, but provides useful information for people thinking about how they will manage their money in retirement. All of Sorted s booklets and resources are free. Booklets can be ordered from sorted.org.nz/ordering or by calling 0800 SORT MONEY ( ). Allow four working days for delivery. 5 Sorted Retirement planning Facilitator s guide

6 Section B: Presentation guide This section guides you through the presentation. It has extra information to clarify details or make the presentation more interesting: Key points to cover A summary of the key points for each slide. Notes Background information to use as a rough script for each slide. Your actions These include the key things to do during each slide including suggested activities, which you may wish to use, to help discussion and get participants involved in the seminar. It is important to make the session as interactive as possible. This will help participants to reconfirm their learning and clarify anything that they have not understood. Definitions You may need to explain some key terms or concepts. Where necessary, definitions are included to help you do this. It might be useful to check participants understanding of some of these terms before explaining. People may be uncomfortable sharing information about their personal financial situation with others. You can help by using the examples in the Retirement planning booklet, talking about your own experiences or asking participants to think about hypothetical situations. 6 Sorted Retirement planning Facilitator s guide

7 SLIDE 1 Retirement planning Welcome participants to the seminar and introduce Sorted. Introduce the topic. Reconfirm how long the seminar will take. Find out what participants are expecting from the seminar, what they hope to learn and what they already know. Show slide 1. Activity: Whole group Check what the group is expecting to learn. If necessary, you may need to establish some common objectives. Ask each person to introduce themselves to the group and say what they want to get from being at the seminar. Start with yourself. Activity: Whole group Ask participants what they know about retirement planning. Write their answers on the board. If appropriate ask one or two participants to share their experience of retirement planning. Welcome to Sorted s seminar on retirement planning. This seminar will take about an hour. During it we ll take a look at how to go about planning for retirement. Let s start by finding out what everyone here wants to learn about retirement planning; what you want to achieve in today s session......and what do you already know about retirement planning? By the way, this seminar is brought to you by Sorted. You might recognise the mouse or know the website sorted.org.nz. Sorted is provided by the Commission for Financial Capability and it provides free, independent and impartial information on money matters. Because the information Sorted supplies is impartial, you won t get advice in this seminar but you will get information you can use to get your retirement planning underway. 7 Sorted Retirement planning Facilitator s guide

8 SLIDE 2 Today s seminar What lifestyle do you want? How much will you need? Where will your money come from? What can you do now? Introduce the key topics. Hand out the Retirement planning booklet. Get participants to share their ideas about the retirement they would like. SLIDE 2 Show slide 2. Hand out the Retirement planning booklets to participants. Activity: Whole group Ask participants to share some of the things they plan to do when they retire. Write their suggestions on a whiteboard. Possible icebreaker if you need one: In today s seminar we re going to think about the kind of retirement you would like to have, and how today s retirees manage in retirement. We ll take a look at how much money you ll need to achieve that lifestyle and where that money might come from NZ Super, KiwiSaver and other forms of long-term investment. And we ll look at what to do now to achieve that retirement lifestyle. By the end of this seminar, you ll have a better sense of what your retirement could be like. And you ll know the next steps you need to take. So let s think about the kind of lifestyle you might like in retirement: what are the sorts of things you might want to be able to do? Ask participants: Whether they know the average life expectancy of men? Of women? Who gets NZ Super? How much is NZ Super? How old do you have to be to get it? Write the answers to the questions on a whiteboard and refer back to these with the correct answers during the seminar. 8 Sorted Retirement planning Facilitator s guide

9 SLIDE 3 What lifestyle do you want? Travel New fridge Rent a house Visit grandchildren Hobbies / interests Help with the garden/home Dinner out A smaller house Gifts for friends Vet bills & family Medical bills Money for emergencies Continue to discuss the kind of retirement participants imagine for themselves. What will you want in retirement? SLIDE 3 Show slide 3. You might want to travel, visit your grandchildren or spend more time on your hobbies and interests. At the same time you might be thinking about how to juggle these things with other costs like increasing medical bills or needing to get help around the home. You might imagine moving to a smaller house. Thinking early about what your lifestyle could be like is an important first step in retirement planning. 9 Sorted Retirement planning Facilitator s guide

10 SLIDE 4 How much will you need Life expectancy: Today s 65-year-old males live to 86 Today s 65-year-old females live to 88 Men reaching 65 in 2031 can expect to live until 88; women until at least 90 You can expect to live for years in retirement. Working out how much you need in retirement is up to you. You could be in retirement for 25 years or more. SLIDE 4 Show slide 4. If you used the icebreaker in Slide 2, refer back to this and the answers people gave regarding life expectancy. So we ve thought about the kind of lifestyle each of us would like to have. And we ve looked at how today s retirees are living. So how do we work out how much money you need for retirement? Well, it depends on how long you plan to live! On average, today s 65-year-old men live to 86. And women live to 88. In the future, we ll probably live even longer. Men reaching 65 in 2031 can expect to live until they re 88 and women until they re at least 90. So if we anticipate living for 20 to 30 years in retirement, how much money do we need for the lifestyle we want? 10 Sorted Retirement planning Facilitator s guide

11 SLIDE 5 NZ Super NZ Super is the only source of income for 40% of today s retirees NZ Super rates Week Annual Single (living alone) $375 $19,476 Couple $576 $29,962 Weekly NZ Super rates (after tax at M rate), rounded to the nearest dollar. Valid as at 1 April For more information about NZ Super rates, visit workandincome.govt.nz. Discuss the incomes provided by NZ Super. Highlight that NZ Super is not means or asset tested. People can work beyond 65 and receive NZ Super. Discuss the retirees stories in the Retirement planning booklet how do these compare with what they ve learnt so far about saving for retirement and NZ Super. SLIDE 5 Show slide 5. If you used the icebreaker in Slide 2, refer back to this and the answers people gave regarding NZ Super. Activity: Three groups Split participants into three groups. Assign a story from the Retirement planning booklet (pages 3-5) to each group, for discussion. Ask each group to report back.you may want to write their ideas on a whiteboard. As mentioned just now, the figures shown in the previous table allowed for NZ Super payments to be made. And 40% of today s retirees live on NZ Super alone. For a single person living alone, their NZ Super is about $375/week ($19,476/pa). For a couple where both people qualify, the combined income is about $576/week ($29,962/pa). NZ Super is our government provided, taxpayer funded pension. It s paid to all New Zealand residents over the age of 65 regardless of your income or assets. It s likely that there will be a gap between the income NZ Super provides and the income you want in retirement. So if you don t want to live on NZ Super alone, then you need to save or have other sources of income. Let s take a look at the three stories in the Retirement planning booklet these have been developed from interviews with retired New Zealanders about their spending patterns. As you read about their situations, think about what you want. Discuss the kind of lifestyle these people have: Is it one you can relate to? How does it compare to the kind of retirement you would like to have? How does it compare to what you have learnt about saving for retirement and NZ Super? 11 Sorted Retirement planning Facilitator s guide

12 SLIDE 6 Other sources of income Your savings Employment Gifts or inheritance Sale of property or business Rental property Discuss the different types of income people may have in retirement. Remind people that they can continue working and still receive NZ Super. Warn people not to rely on inheritances or gifts. Remind people that rental property comes with expenses. SLIDE 6 Show slide 6. So, as discussed, if you don t want to live on NZ Super alone, then you need to save or have other sources of income. These may include: Your savings including income from retirement savings schemes like KiwiSaver or other workplace savings schemes, or cash deposits you ve saved up. You may find that you would like to continue working in some way as a consultant or mentor, part-time or in a completely different job with less demands. More than one third of Kiwis continue working as they pass age 65. There may be an inheritance you re counting on. However be careful with depending on such things, as circumstances can change quickly and you may not get what you had hoped for. If you have a business or property then selling these, may provide you with a lump sum that can be converted to regular income. Renting property can be a source of income but remember that it will also come with expenses such as rates and maintenance which will need to be paid. 12 Sorted Retirement planning Facilitator s guide

13 SLIDE 7 Other sources of income Your own home Downsizing Subdivision Renting out Equity release Selling your home to family Discuss other sources of income for homeowners SLIDE 7 Show slide 7. Activity: Whole group Ask if anyone can think of other things they could do to generate additional income in the future. If you own your own home, you may be able to use that to generate income as well: You might consider downsizing to a smaller, cheaper house If your section is large enough, subdividing may be an option Or you might choose equity release. That s when you take out a reverse mortgage so you borrow against the equity in your home. Or sell your home to family/whänau while still continuing to live in it. 13 Sorted Retirement planning Facilitator s guide

14 SLIDE 8 What can you do now? Start a long-term savings plan KiwiSaver Workplace savings Other, e.g. rental property While it s always good to start saving early, it s never too late to start. You need to start saving now. KiwiSaver and workplace schemes are easy. While it s good to start saving early, it s never too late to start. SLIDE 8 Show slide 8. So what do you need to do now to help achieve the retirement you want? Workplace savings schemes like KiwiSaver make saving easy. That s because your contributions come direct from your pay before you have the chance to spend it elsewhere. In addition, workplace savings schemes often include contributions from your employer. So your money really grows a lot more quickly than if you re saving on your own. As well as employer contributions, KiwiSaver also has tax credits of up to $521 each year. The incentives with KiwiSaver mean it s worth joining right up until the age of 65 although the earlier you start the better. You may have other ways you prefer to save money. Some people prefer to invest in rental property or a business, for example. Whatever the case even if you haven t started saving, it s never too late to start. 14 Sorted Retirement planning Facilitator s guide

15 SLIDE 9 What can you do now? Become debt-free Save and invest sooner The sooner you re debt-free, the sooner you can save even more. Become debt-free as soon as possible. Pay off high-interest debts first. If you ve got a mortgage, aim to be mortgage-free. Group activity to encourage discussion on the different topics covered SLIDE 9 Show slide 9. If you have Internet access, demonstrate the Debt calculator on sorted.org.nz. Activity: In groups Split the class into groups. Get each group to discuss one or two of the thought bubbles on pages 9-10 of the Retirement planning booklet. Ask groups to share their ideas with the rest of the class. As well as saving for retirement, you also need to get out of debt. There s no point saving a whole lot of money if you ve still got significant debts in retirement. Aim to be debt-free as soon as possible and definitely by retirement. If you ve got a number of debts, focus on paying off the high-interest debts first. If you ve got a mortgage, then you want to be mortgage-free by retirement. Ideally, you ll be mortgage-free sooner than that so you can really start saving your money. 15 Sorted Retirement planning Facilitator s guide

16 SLIDE 10 Find out more Sorted booklets Calculators and information on sorted.org.nz If you re close to retirement Work out a budget for retirement Read Your money in retirement The best thing you can do is take action. SLIDE 10 Invite participants to share what they ve learnt. Remind participants to use the free Sorted booklets and tools on sorted.org.nz. Hand out Your money in retirement booklets to any participants close to retirement. Encourage participants to take action now. Show slide 10 Activity: Individuals Ask participants to write down one or two things they are going to do as a result of attending the seminar. Or key points that they found valuable. Then go around the room and ask each participant to share what they ve written with the others. Once everyone has contributed, thank them for attending the seminar. The Sorted Retirement planning booklet has all the information we have covered today including where to get more help. There s more information and calculators on sorted.org.nz. If you re close to retirement: Work out the kind of budget you ll have in retirement based on your savings now and any income you expect to get. Read the booklet Your money in retirement. It has information on all sorts of things about managing your money in retirement. If you re not so close: Think about the lifestyle you d like. Work out how you would get there, eg reducing or paying off debt by when to save how much. Start saving now the earlier you start, the better. Remember, no matter what your situation the best thing you can do now is to take action. 16 Sorted Retirement planning Facilitator s guide

17 The Commission for Financial Capability The Commission helps New Zealanders prepare financially for retirement, through education, information and promotion. Our Sorted information programme helps Kiwis of all ages to understand money matters and manage their personal finances throughout life. The Sorted programme is made up of the website sorted.org.nz, a range of Sorted booklets, Sorted workplace programmes, and Sorted seminars. The Sorted website was launched in 2001 along with the Sorted mouse, which was created to encourage people to go online and get sorted. If you have any feedback on this seminar material we would like to hear from you. Please the Sorted team at office@sorted.org.nz. Commission for Financial Capability PO Box Wellington 6144 cffc.org.nz To order Sorted booklets: sorted.org.nz/ordering 0800 SORT MONEY ( ). the commission for financial capability all rights reserved.