Whether you are nearing retirement or have already retired, you’ll probably have built up the most savings that you have ever had, especially taking into account KiwiSaver funds. Remember though, this pot of money needs to last for the rest of your life.
So, as you approach retirement, it might be a good time to take another look at your investments and savings and not purely rely on Term Deposits to fund your retirement. Your retirement could be 30 years long and interest rates are expected to remain low for the foreseeable future. Therefore, earning minimal interest is going to mean that you will have to start dipping into your capital before too long. In all honesty, you are probably going to have to look at other options to make your money last. So, how can you do this whilst also protecting yourself from market risk and to ensure your money lasts as long as you do? Lifetime Retirement Income offer a solution to turn your savings into a fortnightly income that is guaranteed for life. Your money is invested in a balanced fund (similar to a KiwiSaver fund) and your regular income is guaranteed for as long as you live, meaning even if the funds are depleted, your income will continue for the rest of your life. You can also withdraw the balance at any time, or any fund balance on death is paid to your Estate. For example, a 65-year-old couple could turn $100,000 of retirement savings into a net income of $5,000 a year (after fees and tax) paid fortnightly at a rate of $192.31 for life.
Lifetime Retirement Income can play a key part in a robust retirement plan. Like all good investing though, diversification is essential, and Lifetime is not a one-size-fits-all solution. Combined with the NZ Super though, it enables you to meet your regular expenses for life. Meaning that any other investments can provide for ‘lifestyle goals’ in retirement but you have peace of mind knowing that the basics, to enable you to remain comfortable, are covered. Each person’s retirement lifestyle and goals are unique so please give us a call to help you plan and prepare for your retirement.
This article is general information and not personalised advice.