Canadian retirement expert, author and founder of the Retirement Lifestyle Center Barry LaValley was in Hawke's Bay this week, talking to clients of the Hastings-based Stewart Group, and addressing about 60 people at a public meeting on retirement issues in Hastings. Hawke's Bay reporter Andrew Ashton caught up with man dubbed "Canada's self-help retirement Guru".
How long have you been associated with Stewart Group?
I have my own consultancy business based in Canada but most of the work I do is in the US, Australia and New Zealand. I have also done some stuff in China and Great Britain. Stewart Group was an organisation I was introduced to maybe five years ago and they liked the message I was sending and hired me as a consultant to talk to their clients.
What is the feedback you have been getting from people in Hawke's Bay?
The feedback is always "Wow, I never though about that".
I look at things like relationships, what happens as we get older as far as health issues we should be aware of, the role the workplace has as we get older, and our relationship with leisure.
The feedback is always pretty universal and I'm amazed at that. We're always clear on what we are retiring from but not always clear on what we are retiring to.
I think what has to change is redefine what retirement is. Our parents defined it as not working but clearly people are going to continue to work because we're meant to work. if you just quit and don't work health issues start to arise that don't arise for people still in the workplace.
What I call retirement is that point on your life when you can choose to do what you want, when you want and how you want. It's more a mindset than anything else.
People always ask me when am I going to retire - I'm already retired, I'm doing what I want. I don't have to do this but I'd rather be doing this.
The message I want them to take away is retirement isn't work versus no work. Retirement is when you decide you are going to live the life that you can afford and you are in control.
How do you feel about the New Zealand KiwiSaver scheme?
It's pretty good - but it's a bubble and it's not good forever.
I think that extraordinary amounts of payouts, which is one aspect of KiwiSaver right now is not good. If you look at KiwiSaver or Canada Pension Plan or Social Security, they have to continue to be funded all the way through and the question I ask of governments is are they going to be able to pay these as the Baby Boomers continue to get older and draw on them.
The other issue is these were never meant to be the sole source of income you have in retirement and yet, unfortunately, for many New Zealanders and many Canadians and Americans, their retirement will be living off their Social Security or their pension. That's a sad situation, that's why so many people are up in arms about trying to extend when you can get KiwiSaver. So, 67, 68 is going to be pretty common in the future, otherwise they will go broke.
How do you advise people wanting to sell assets to move into a retirement village?
You can get a reverse mortgage so you are getting your money back but for the boomer it's really about lifestyle and many boomers are happy to give up the assets we have in order to fund lifestyle.
I happen to like what retirement villages provide but I don't like the fact I'm giving up all my money, I would prefer to retire to a retirement community where I can buy my own place, transfer the assets out of my home and downsize. But I want to be around people and be around activities.
How do we deal with the challenges of a rapidly ageing population?
It's a challenge - you have to make adjustment for that. Access to healthcare is a universal right and that's going to place a real problem on existing facilities.
I think we need more education, we should be encouraging people to learn more about the ageing process. Everybody treats retirement as a financial issue but it's more a physical, emotional issue.
We should be educating people in the workplace about what retirement is and how important the transition is.
What are the common mistakes people make around saving for a pension?
The biggest mistake is that they don't save and they don't start early enough to save because they have this idea that it will all look after itself.
Our level of savings is nowhere near where it needs to be. We are going to have many people that are going to have to continue to work because they can't fund their life in any other way and that of course is going to be a challenge for society.
The good news about that is there a growing number of places for older people in the workforce. HR departments are trying to keep the older worker in the workplace because they don't want to lose all that intellectual talent that they have. I think you'll see that this whole concept that retirement mens quitting work will disappear.
When is it too late to start saving for retirement?
i wouldn't say it's ever too late, you either earn more, spend less or cut down on things you don't need to buy and do a budget. It's never too late but it may mean your choices become more limited over time.
Retirement isn't planning for a bucket list, you're really planning for the last third of your life. It is a time when time is precious, it is a time when change is more common than being the same and we have to learn to adjust.
The keys to retirement success are first and foremost having a positive attitude, the second this is you have to feel like you have a purpose. Retirees don't look at themselves as a wasting assets - they look at themselves as still relevant and useful.
The third thing is relationships. We need engaging activities that are meaningful - it can't just be taking the caravan around New Zealand perpetually or being on the golf course every day - it has to be things that make you feel you are connected to life.
The last one, and the one that surprises people, is we need achievement. Money, in retirement, isn't the measure of achievement any more, the measure of achievement is what ever you say it is.