How much savings should you have at a particular age?

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Forums › Finance and wealth management › How much savings should you have at a particular age?

Finch

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#207614 5-Jan-2017 10:52

Hey guys.

Im wondering if there was some kind of chart/table out there that showed how much the average person has saved up at a certain age, along with other factors such as if they have kids, do they own their own home, did they go to uni etc?

Obviously there is no magic number, but thought it would be cool to compare and see how much everyone has a specific age along with other factors.

Any idea if one exists or not? Specifically for NZ.

Thanks

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#1698786 5-Jan-2017 11:14

Hang on whilst I look up this 'savings' of which you speak....

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Jase2985

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#1698789 5-Jan-2017 11:18

it would be hard to find such information as you are basically asking people financial questions to get the answer, and most dont like answering those.

Fred99

13684 posts

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#1698792 5-Jan-2017 11:20

More information here

linw

2835 posts

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#1698803 5-Jan-2017 11:35

https://www.sorted.org.nz/guides/planning-for-retirement

marpada

470 posts

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#1698808 5-Jan-2017 11:54

In NZ If you don't own at least 4 investment properties before turning 25 you're hopeless, or that's what they say in the news.

mattwnz

20004 posts

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#1698816 5-Jan-2017 12:38

marpada:
In NZ If you don't own at least 4 investment properties before turning 25 you're hopeless, or that's what they say in the news.

The big problem in nz is so much emphasise by the media has been put into people needing to own their own homes to be financially successful. That has help to fuel house prices as there has been a lot of greed involved. But there are other ways to save money and make money from that investment.

alasta

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#1698832 5-Jan-2017 13:20

The graphic that Fred99 shared above has a few really fascinating revelations;

- Net worth doesn't appear to consistently increase towards retirement age and then decrease beyond retirement age, particularly for individuals.

- Up to 49 years of age couples appear to have at least five times the net worth of individuals. Is there some social phenomenon here whereby people with successful careers or investments are more likely to have partners?

- Net worth around retirement age appears much lower than what I would expect to need when I eventually retire.

It's really hard to know how much you're going to need because you don't really know what assumptions to make around how much the state pension is going to be when you retire, how long you're going to live, at what age you're going to need to retire, what will be your return on investment and the rate of inflation, etc. What you can be sure of is that the more you save when you're young, the better off you'll be long term because of the power of compounding returns.

alasta

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#1698834 5-Jan-2017 13:22

mattwnz:
marpada:

In NZ If you don't own at least 4 investment properties before turning 25 you're hopeless, or that's what they say in the news.

The big problem in nz is so much emphasise by the media has been put into people needing to own their own homes to be financially successful. That has help to fuel house prices as there has been a lot of greed involved. But there are other ways to save money and make money from that investment.

I totally agree. Housing investors might scoff at me because they are getting a slightly better return than I'm getting on managed funds, but long term I can't see how they can possibly continue to get capital gains at ten times the rate of inflation on a non productive asset. It just isn't sustainable, and noone knows when it's going to go to hell in a handcart.

mattwnz

20004 posts

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#1698840 5-Jan-2017 13:37

alasta:

The graphic that Fred99 shared above has a few really fascinating revelations;

- Up to 49 years of age couples appear to have at least five times the net worth of individuals. Is there some social phenomenon here whereby people with successful careers or investments are more likely to have partners?

I agree it is interesting. I think that couples are worth a lot more upto 49, because a couple would have likely purchased a house (plus perhaps an investment house when they upsized) at least 10 years ago, and that house may have appreciated a lot over recent years. Whereas it is almost possible for a single person to buy a house in Auckland unless they have a very good income, as you need 2-3 full time wages to do this. So the money they paid for living (mortgage payments) would have instead gone to rent, to pay off the couples house they are renting it from. It does perhaps show how heavily weighted NZ culture is towards investing in housing.

mattwnz

20004 posts

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#1698842 5-Jan-2017 13:40

alasta:

mattwnz:
marpada:

In NZ If you don't own at least 4 investment properties before turning 25 you're hopeless, or that's what they say in the news.

The big problem in nz is so much emphasise by the media has been put into people needing to own their own homes to be financially successful. That has help to fuel house prices as there has been a lot of greed involved. But there are other ways to save money and make money from that investment.

I totally agree. Housing investors might scoff at me because they are getting a slightly better return than I'm getting on managed funds, but long term I can't see how they can possibly continue to get capital gains at ten times the rate of inflation on a non productive asset. It just isn't sustainable, and noone knows when it's going to go to hell in a handcart.

Exactly. The other thing is that apparently the sharemarket has performed better than housing over the last 10 years, (apart from possibly housing in Auckland over recent years). This isn't reported so much in the media, as they are so fixated on housing, possibly because much of heir advertising is centered around housing.

nzkiwiman

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#1698855 5-Jan-2017 13:56

Mid 30's, single (and only child)

Have a 7k student loan (started at $35k 10 years ago) and $20k in savings (plus another $1400 in bonus bonds), no house of my own, have a newish car and making a few dollars per hour over the minimum wage (not sure what is in my Kiwisaver - either $6k or $16k depending on what graph I look at)

Everything I read/listen to about live says that I am failing (hard)

But .. I don't see it that way at all, and am very happy

RickW

298 posts

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#1698871 5-Jan-2017 14:28

I'm 28 my partner is 24 neither of us have student loans. we are in Christchurch and own our own home that I purchased at 23. We have a 2.5 yo son and we're looking at getting another house and using the current as a rental because it has over 40% equity. W

Bobdn

222 posts

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#1698914 5-Jan-2017 15:42

nzkiwiman:
Mid 30's, single (and only child)

Have a 7k student loan (started at $35k 10 years ago) and $20k in savings (plus another $1400 in bonus bonds), no house of my own, have a newish car and making a few dollars per hour over the minimum wage (not sure what is in my Kiwisaver - either $6k or $16k depending on what graph I look at)

Everything I read/listen to about live says that I am failing (hard)

But .. I don't see it that way at all, and am very happy

No, I think you're in a pretty good situation, not dissimilar to where I was at 35. Main thing now is to maximize your income (and savings) over the next 10 years or so to give yourself a ton of freedom as you approach 50. May I recommend the book Your Money or Your Life. It's pretty much the mother of all personal finance books and helped me so much. I'm financially independent now and it is partly due to that book. The website Mr Money Moustache does a good job too but YMOYL got there 20 years earlier.

alasta

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#1698930 5-Jan-2017 16:20

mattwnz:

alasta:

I totally agree. Housing investors might scoff at me because they are getting a slightly better return than I'm getting on managed funds, but long term I can't see how they can possibly continue to get capital gains at ten times the rate of inflation on a non productive asset. It just isn't sustainable, and noone knows when it's going to go to hell in a handcart.

Exactly. The other thing is that apparently the sharemarket has performed better than housing over the last 10 years, (apart from possibly housing in Auckland over recent years). This isn't reported so much in the media, as they are so fixated on housing, possibly because much of heir advertising is centered around housing.

Yes, although residential property is generally a leveraged investment, so people are getting returns on the full value of the house rather than just their equity. The problem with leveraged investments is that you're assuming that your return exceeds the cost of debt (i.e. mortgage rate) which is probably true in the current environment but, again, not sustainable over the long term.

alasta

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#1698931 5-Jan-2017 16:26

Bobdn:

No, I think you're in a pretty good situation, not dissimilar to where I was at 35. Main thing now is to maximize your income (and savings) over the next 10 years or so to give yourself a ton of freedom as you approach 50. May I recommend the book Your Money or Your Life. It's pretty much the mother of all personal finance books and helped me so much. I'm financially independent now and it is partly due to that book. The website Mr Money Moustache does a good job too but YMOYL got there 20 years earlier.

Also, for anyone who doesn't already have a system in place, I would strongly recommend getting some decent budgeting software and put aside a whole day to learn how to use it effectively.

A lot of people think they don't need a budget because they are "already good with money" but it is just too complex to manage your finances on the back of an envelope because most people these days have a multitude of different expenses, varying cycles on income and expenses, multiple bank accounts, non cash expenses, etc. If you don't have a system in place that includes bank reconciliations then I can pretty much guarantee that you'll have some leakage somewhere.

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