Retirement Income Planning

A couple of news items have me thinking. And frankly, getting a bit agitated. The first was the news that the Kiwisaver gender gap has got worse in the past year. New research from Te Ara Ahunga Ora The Retirement Commission shows a 36 percent gap between the amount men and women are putting into KiwiSaver each year, far outpacing the actual gender pay gap. Men and women are contributing the same percentage of their salaries, but women are disadvantaged by working part-time and taking greater (unpaid) care responsibilities. The other bit of not-unrelated news, is the NZ Herald’s list of top-earning CEOs. Of the top 10 - just one woman. In the 54 CEOs surveyed: seven women. In the immortal words of Carrie Bradshaw: I couldn’t help but wonder… WTF is going on here? How have we not come further? Of those top 10 CEO’s companies, how many are reporting on their gender pay gaps? (The answer, according to the Mind the Gap registry: 4) Is there a relationship between perimenopause/menopause support (or lack of it) and the lack of women in CEO roles in our top organisations? AND between perimenopause/menopause and the Kiwisaver gender gap? I think there might be. We know, for example, from the work of Sarah Hogan who found in her NZIER research that 14% of women said they had to reduce their working hours to manage their menopause symptoms, and 6% had changed roles. Twenty percent of women who experienced symptoms said it would have been helpful to be able to make adjustments, but they never requested any, mostly because of menopause and gendered ageism stigma. All of us who are working in menopause education have heard stories from women who - at a critical stage in their careers in midlife - have made the call to step back rather than step up into senior roles, because of the challenges of menopause and the lack of support for them in their organisations. We have to talk more about this. In fifty years we’ve made so little progress… we REALLY don’t want our granddaughters to be still facing these kinds of shocking statistics in fifty years’ time. 

Retirement savers are getting a boost in 2026. The IRS just raised contribution limits, giving workers a little more room to build long-term security. Here’s the quick rundown: 🔹 Workplace plans (401(k), 403(b), 457) – New limit: $24,500 – Catch-up for 50+: $8,000 – Catch-up for ages 60–63: $11,250 🔹 IRAs – New limit: $7,500 – Catch-up: $1,100 These increases help your savings keep pace with inflation… but only about 14% of people actually max out their plans. One key update: if you earn more than $150,000 in 2025, your catch-up contributions must go into a Roth account — no upfront tax break, but tax-free withdrawals in retirement. If your employer offers a match, make sure you’re taking full advantage. And if you’re thinking about increasing your contributions for next year, these new limits give you more room to work with.

Did you know on average women in the UK need to work 19 years longer than men to bridge the pensions savings gap? This was highlighted by findings from the Pensions Policy Institute earlier this year. The gender pension gap is a serious issue, particularly for women in midlife and beyond. Many women are forced to leave the workforce early due to health concerns like menopause, and at retirement, women’s pension pots are £136,000 short of men’s, leaving many to face financial insecurity. Also, 37% of women in the country do not engage in investments beyond their workplace pension, whereas this figure is 24% for men -- in part due to having less disposable income available for investment -- according to Aviva, a UK pension provider. The pandemic made things worse, with women over 65 struggling to bounce back from job losses. Gender pay gaps, ageism, and caregiving duties further compound these challenges, particularly when viewed through an intersectional lens. In the UK, women are almost three times more likely than men to retire early to care for a family member. All together, from the gender pension gap to caregiving duties, these findings paint a stark picture of the challenges midlife and older women face in the workplace. Yet, organisations are lagging. Despite Europe’s median age climbing, less than 10% of companies factor age into their diversity strategies. Older workers are often overlooked, but the skills they bring are invaluable. We need to prioritise flexible work, carer’s leave, and menopause support. Some companies are making strides by integrating age-inclusive practices—but more must follow suit. It’s time to close the pension gap and give older and midlife women the recognition, financial security and pension parity they deserve. Learn more about gendered ageism in one of our most recent blogs: https://lnkd.in/eEurQvKJ And read more about the gendered pension gap: https://lnkd.in/eNRxk2gu #GenderEquality #GenderEquity #EDI #DEI #ThreeBarriers

What if a tiny 0.2 % fee could add ₹2 lakh to your retirement corpus? → Expense ratio measures the annual cost of managing a mutual fund expressed as a percentage of assets. In India the average equity mutual fund expense ratio is about 1.5 %. A fund with a 1 % expense ratio charges Rs 10,000 per year on a Rs 10 lakh investment. → Lower expense ratios are linked to higher long‑term returns because fees compound over time. Data from the AMFI shows that funds in the lowest expense‑ratio quartile outperformed the highest quartile by roughly 1.2 percentage points annually over ten years. Passive index funds typically have expense ratios below 0.2 %. → Even a 0.5 % reduction in expense ratio can increase the final corpus by about Rs 2 lakh after twenty years on a Rs 10 lakh SIP. Investors should compare expense ratios alongside performance when selecting a fund.

"My CPA told me: You don't have to spend your HSA — just let it grow." Last week, I reviewed a client's tax return. They contributed $8,300 to their HSA... and panicked thinking they had to spend it all. They'd been saving receipts all year, planning a December shopping spree for eligible expenses. I stopped them cold: "That's FSA thinking. Your HSA never expires." That money? Still sitting there, tax-free, compounding. Completely untaxed growth — potentially for decades. Their face when they realized their HSA could become a stealth retirement account was priceless. The HSA is the ONLY triple-tax-free account in existence: - Tax-deductible going in (immediate savings) - Grows tax-free (no capital gains taxes ever) - Withdraw tax-free for qualified medical expenses — even decades later And if you don't use it for medical expenses? At age 65, it works like a traditional IRA — withdraw for anything, just pay income tax (no penalties). Here's how to actually win with an HSA: - Max out the contribution every year ($8,300 family limit for 2024, rising to $8,550 in 2025) - Do NOT spend it. Pay medical costs out-of-pocket if you can  - Invest the HSA balance — don't leave it in cash earning nothing - Keep every medical receipt digitally. You can reimburse yourself years later, tax-free - Treat your HSA as part of your retirement portfolio — not a short-term medical fund Remember: The average couple needs $315,000 for healthcare in retirement. Your future self will thank you for this tax-free medical nest egg. If your CPA hasn't explained this strategy to you, you're leaving one of the most powerful tax advantages on the table.

Turns out, this is when I should have started thinking about saving for my pension. Research found women retiring at 67 – the new UK state pension age from 2026 – will have saved an average of £69,000, compared with £205,000 for men. If you’re a woman and want to retire with the same pension as a man: 🗓️ Just work another 19 years, OR 🍼 Go back in time so you can start saving at three years of age When I was doing research for The Hilda Project, I spoke to many women who couldn’t save for their pension when they were in their 20s & 30s - taking career breaks to raise children, single parents with no extra money to set aside, working part-time jobs that didn’t hit the earnings threshold for workplace pension enrolment. A few were now high earners in their 50s & 60s, but after *decades* of not using their pension allowances, they had now lost it because they made too much money. The entire pension system is designed to support unbroken, linear career progression, meaning it’s rigged against the lived reality of most women.

The IRS finalized rules this month on a 2022 law that impacts high earners over 50. Starting in 2026, if you made over $145,000 in 2025, your 401(k) catch-up contributions must go into a Roth account. The pretax option? Gone. For a 60-year-old in the 35% bracket, that's nearly $4,000 in lost deductions on an $11,250 super catch-up contribution. The math stings: • You'll pay taxes upfront during peak earning years • Higher AGI could disqualify you from other tax breaks • 14% of 401(k) plans don't even offer Roth (meaning no catch-ups at all) But before you panic, consider the opportunity. Roth money grows tax-free forever. No required distributions. Your heirs inherit it tax-free. And with the top 10% now accounting for 49.2% of consumer spending (highest since 1989), tax rates might only go up from here. Three moves to make now: 1. Verify your plan offers Roth contributions. If not, push HR to add it. 2. Run the numbers on converting more to Roth. Many high earners have too much in pretax accounts anyway. 3. Remember the threshold applies per employer. Multiple jobs could mean multiple opportunities. The government wants its cut upfront now. But forcing high earners into Roth might be the push they needed to build truly tax-free wealth. Sometimes the best financial moves are the ones we're forced to make. What's your take... setback or opportunity?

When I meet with families, many of them are usually not taking advantage of a strategy that can save them thousands. Tax location. This strategy helps minimize taxes by using multiple tax-advantaged accounts. These are the 3 types: Pre-Tax: - Allows you to deduct expenses today - Funds are tax deferred until distribution - Funds at distribution are taxed as income Examples: 401k, IRA, 403b etc. Post-Tax: - No deduction upfront - Funds are grow tax-free - Funds are tax-free at distribution Examples: Roth 401k, Roth IRA, etc. Taxable: - No deduction and no tax growth - No early penalties or contribution limits - Capital gains treatment (Can tax loss harvest) Examples: Brokerage, Savings, etc. By utilizing all three, you can strategically maximize your tax diversification how you distribute your funds, and when they go out. Cause you don't know what your future income will look like. And you won't know what your future tax rates will look like either. All three give you flexibility and the tools to tackle whatever outcome.

$500K in their 401(k) at age 35. "Did we make a mistake?" Sounds like a great problem to have, right? For this husband and wife, it felt like a burden. Sales executive. Stay-at-home mom. Two young kids. Their fear: "Life is short. Friends are passing away. Family members we love are gone." "Do we really want ALL this money locked away until we're 65?" So they looked at 3 scenarios: Option 1: Continue current high 401(k) contributions → Long-term projection: Amazing wealth by 65 → Short-term reality: Tight budget for family experiences Option 2: Lower contributions to 50% → Future outlook: Still bright for retirement → Present benefit: ~$2,000 monthly for family priorities Option 3: Stop contributing entirely → Retirement projection: Comfortable but not luxurious → Current cash flow: Maximum flexibility The breakthrough moment: We mapped out their "dream lifestyle" in detail. The result? They chose Option 2. Why? → They were already ahead of 95% of Americans their age → Their current 401(k) would grow substantially by retirement → The extra $24K annually meant family trips, experiences, and peace of mind → They could increase contributions later Having "too much" in retirement accounts is a real problem. Your money should enhance your life at every stage. Not just fund a future you might not be healthy enough to enjoy. Balance today with tomorrow.

𝗠𝗼𝘀𝘁 𝗽𝗲𝗼𝗽𝗹𝗲 𝗵𝗮𝘃𝗲 𝗴𝗼𝘁 𝘁𝗵𝗶𝘀 𝘄𝗿𝗼𝗻𝗴: It’s clear to me that a lot of people don’t know what real financial planning is – they still think it’s choosing investment funds and recommending pensions. “𝘞𝘩𝘺 𝘴𝘩𝘰𝘶𝘭𝘥 𝘐 𝘱𝘢𝘺 𝘢𝘯 𝘢𝘥𝘷𝘪𝘴𝘦𝘳’𝘴 𝘧𝘦𝘦 𝘧𝘰𝘳 𝘳𝘦𝘤𝘰𝘮𝘮𝘦𝘯𝘥𝘪𝘯𝘨 𝘢𝘯 𝘪𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘧𝘶𝘯𝘥 𝘸𝘩𝘦𝘯 𝘐 𝘤𝘢𝘯 𝘫𝘶𝘴𝘵 𝘣𝘶𝘺 𝘢𝘯 𝘪𝘯𝘥𝘦𝘹 𝘵𝘳𝘢𝘤𝘬𝘦𝘳 𝘧𝘰𝘳 𝘱𝘦𝘯𝘯𝘪𝘦𝘴 𝘰𝘯 𝘵𝘩𝘦 𝘱𝘰𝘶𝘯𝘥?” The reality is that the true value is in so many other areas and not in investment fund selection: • Co-creating a lifetime financial plan gives you and your spouse a clear framework to guide your future decisions for your family. - The ability to run multiple ‘what if?’ scenarios and determine the impact ahead of time - ‘What if we helped our kids get on the property ladder?’ ‘What if we bought a holiday home?’ ‘What if I retired, or sold the business next year?’ • Getting you financially organised – do you have a will? is it up-to-date? , what about LPAs? Is everything organised and optimised? • Helping you become as tax efficient as you can be. Are your assets held in the most effective structures? If you take income, is it optimised for tax efficiency? • Acting as a trusted adviser to keep you accountable, answer your questions, be a sounding board for your latest idea, and ensure that you remain on track to achieving all the things that are important to you and your family. • Becoming the essential point of contact should any family member need help, guidance, or assistance, particularly if you were incapacitated or were no longer around. The list goes on, but it’s clear that there’s a lot more to real financial planning than recommending investment funds - although we can do that as well 😉. What would you add?