**My partner and I are both in our early fifties and recently we have been thinking about planning for our funerals. Is it better to go for a pre-paid funeral plan, or just have a separate savings account for that set purpose? Would we be penalised in any way when we retire and collect superannuation?
**
I think planning for your funerals in your early fifties is a touch premature. The average life-span of New Zealand females is 82 and for males it’s 78. I would continue with a general savings plan until you are at least 60 years old. This will offer you more flexibility at a time when demands on your savings come from a host of other directions aside from funerals.
I reckon a sensible savings scheme that covers upcoming costs such as the house repaint, the teenagers’ university fees, and funerals, is a lot more flexible than a wide range of specific plans. The exception would be health insurance if you can afford it, but I accept there are those who find it easier to save if there are target-specific plans. Some go for Christmas club accounts and the like. Maybe that’s you. If a funeral plan helps you save, then good.
Do you have a consumer question for Kevin? Email [email protected], or post to Weekly Consumer, PO Box 90119, Victoria St West, Auckland 1142.
