There is no minimum amount of money you need before seeing a financial adviser. What matters is your overall financial position, including what you have now, what you spend, your KiwiSaver and investments, your future income and the lifestyle you want your money to support. A financial adviser can help you put those pieces together and work out whether you’re on track.

“How much money do I need before I see a financial adviser?” is something quite a few people wonder about, and to be honest, I think it’s asking the wrong question.

The question I’d rather people ask is, “What does my overall financial position look like, and how do I manage it to make the most of it?” Some financial advice businesses require a certain amount of money to invest before they’ll work with you, but we don’t work that way.

As a financial adviser in Tauranga, when someone comes to see me, I want to understand where they’re at. How much do they have now? What might they have in the future? What do they spend? What sort of lifestyle do they want, and what is important to them? Then we can start working out whether what they have will be enough.

“I don’t really have much, but I hope it will be enough”

I was at a workshop recently with five other financial advisers and we got talking about something we hear from clients quite often: “I don’t really have much, but I hope it will be enough.”

Every adviser at the table had heard a client say something similar. What was interesting was that we were talking about people with anything from around $100,000 to $2.5 million. That feeling of not having enough had very little to do with how much they actually had.

I think people sometimes assume everybody else has more than they do. They can also worry that a financial adviser won’t want to see them because they don’t have “enough” money, but we don’t judge people on what they have.

We need to understand your individual situation because having a lot of money doesn’t necessarily mean you have enough, and having less doesn’t necessarily mean you don’t.

The amount you have is only part of the picture

You could have $1 million, but if you’re spending $500,000 a year, that money isn’t going to last very long. Someone else could have considerably less but only need a small amount each month on top of their other income. That’s why we need the facts.

We look at what you have, what you earn, what you spend, your KiwiSaver, your investments, other assets and what income you’re likely to have in the future. We also look at what you actually want to do.

We all have different spending habits and different ideas about what we want our retirement to look like, and we don’t judge people for that either. Some people want to travel, others might want to help their children or grandchildren, and you might want to replace the car every few years or know you’ve got money available if you need surgery.

It’s your money and your life. We just need to work out whether the numbers support it.

Two clients with very different amounts of money

One of my clients first came to see me when she was 62. She had $150,000 in savings, no KiwiSaver and was unable to work at the time. She didn’t qualify for a benefit either, so she needed to work out how she was going to get through the next three years until she reached 65.

One really important part of her situation was that she lives, as I would say, “off the smell of an oily rag”. She doesn’t spend very much at all. We invested the $150,000 so she could draw some income from it while trying not to eat into the money she would need for retirement.

When she was able to, she started doing some part-time work. She turns 65 next year and still has the $150,000, as well as some money she has saved in her bank account. She’s now planning to work for another couple of years because she can.

At the other end of the scale, I have worked with a retired client who had around $3 million in assets. Her husband had died suddenly and she was struggling with how she was going to maintain the lifestyle they had enjoyed together without the income he had previously earned.

She had considerably more money than the first client, but she still needed help answering the same basic question: “Is what I have going to be enough for the way I want to live?”

We worked through the numbers with her. She now has a budget, she knows what she can spend and she’s happy.

These are two very different financial situations, and that’s why I don’t think you can put a number on when someone “needs” a financial adviser.

How do I know if I have enough money to retire?

This is another question we get asked a lot.

We use software that allows us to create a lifetime cash flow graph. We put in things like what you’re earning, what you’re spending, your savings, KiwiSaver, investments and other assets, as well as income you’re likely to receive in the future. Then we can start looking at what happens over time.

For some people, the answer might be that working another year or two will make quite a difference. For someone else, we might be able to say, “Actually, you’re going to be okay. You could retire earlier if you wanted to.”

That can be quite a surprise.

You do need to know roughly what you spend

Around 90% of the people who come in to see us don’t really know how much they spend, which makes it quite hard for us to tell you whether you have enough.

We don’t need to know what you spent on a cup of coffee last Tuesday, but we do need a reasonable idea of what it costs to live the way you live. This becomes particularly important when you retire because you move from accumulating money to spending it.

You’ve spent your working life saving and then suddenly we’re saying, “Now you’re allowed to spend it. This is what you’ve been saving for.” That can be a really hard mental shift for some people.

Your savings might need to help fund another 20 or 30 years of your life, so we want you to be able to spend your money and enjoy it while also knowing there’s a plan behind what you’re doing.

Sometimes people just need to hear, with the numbers to back it up, “Yes, you can afford to do that.”

You don’t need to have everything worked out before you see us

Sometimes people put off seeing a financial adviser because they think they should have everything organised first. You don’t. You might not know exactly what you spend, whether your KiwiSaver is going to be enough, or what you should be doing with your investments, savings or an inheritance. That’s okay. That’s part of what we help you work through.

My background before becoming a financial adviser was in social work, and I think that has always influenced the way I work with people. I’m interested in the person sitting in front of me and what they’re trying to achieve.

There’s no judgement about what you have or what you want to spend your money on. We start with where you’re at, get the facts and work from there.

So, how much money do I need before I see a financial adviser?

There isn’t a magic number. If you’re wondering whether you have enough, we don’t know the answer yet either. What we can say is, “Let’s find out.”

That might mean looking at whether you can afford to retire, whether your KiwiSaver and investments are on track, whether you can afford to spend more, or whether there are things you could do now that will put you in a better position later.

You don’t have to wait until you think you’re wealthy enough to ask those questions.

Frequently asked questions about financial advice and retirement in New Zealand

Do I need $1 million to retire in New Zealand?

No particular amount works for everybody. How much you need depends on how you live, what you spend, what other income you’ll have and what you want to do in retirement.

Someone with $1 million can still worry about whether it’s enough, while someone with much less may be absolutely fine. We need to look at your situation rather than somebody else’s number.

How do I know if I have enough money to retire?

We start by looking at what you have, what you spend and what income you’re likely to have in retirement. We can then create a lifetime cash flow projection to see how the numbers look over time.

It won’t make every future expense predictable, but it gives us something much more useful to work with than guessing.

Can a financial adviser help me with KiwiSaver?

Yes. KiwiSaver can be an important part of your retirement planning, but we don’t look at it in isolation. We look at your KiwiSaver alongside your savings, investments, other assets, income, spending and what you’re trying to achieve.

When should I start planning for retirement?

You don’t have to wait until you’re about to retire. The earlier we look at where you’re heading, the more time you have to make changes if you need to. If retirement is already quite close, that’s okay too. We start with where you are now.

Do I need to know exactly how much I spend before seeing a financial adviser?

No. Most people who come to see us don’t. We’ll need to get a reasonable idea of your spending as part of the process because it’s very difficult to work out whether you have enough for retirement without knowing roughly what your lifestyle costs.

Is there a minimum amount I need to invest with DecisionMakers?

We don’t start with a minimum investment amount. We start by looking at your financial position, what you’re trying to achieve and whether we can help you.

What happens when I first meet Tanya?

We talk. I want to understand where you’re at, what’s important to you and what you’re trying to work out. Then we can look at what information we need and what the next step might be.

The first hour with me is always free, so you can come in and have that initial conversation without having to decide beforehand what advice you might need.

Would you like to talk about your own situation?

If you’ve been wondering whether you have enough to retire, whether your KiwiSaver and investments are on track, or whether you’re making the most of what you have, you’re welcome to come and talk to me.

The first hour with me is always free.

You can book a time to talk with me here.

Kia ora, I’m Tanya Gilchrist, Financial Adviser and Certified Financial Planner with DecisionMakers in Tauranga. I help people make the most of what they have, so they can feel confident about their financial future.

Financial advice disclaimer: This article provides general information only and is not personalised financial advice. Everyone’s financial circumstances, goals and needs are different. Before making any financial or investment decisions, you should consider getting financial advice that takes your individual circumstances into account.