Retirement – 4 Tips for Lifetime Retirement Income in New Zealand

Investing for Retirement

‘Make sure you never run out of money’ is the first rule for retirement income. The second rule of retirement income is – you guessed it – ‘make sure you never run out of money.’

To ensure your retirement is relaxing and rewarding, without the worry that your funds will dry up, there are a few things you can do.

Tip 1. From saving for retirement, to spending in retirement.

You’ve spent your working life saving for retirement. So what happens when you do retire and the money starts flowing out rather than in? Everyone’s retirement is different. Some people stop working, some continue in their lifelong careers but with a reduced workload, some start new work and some may just choose to enjoy doing things completely differently. One of the greatest myths in retirement is that it’s about stopping, in our view it’s all about starting!

A flexible plan that balances NZ Superannuation, retirement savings and new sources of income with everyday spending needs, is the first step in enjoying a rich and rewarding retirement. At Britannia we have a number of plans that will help you take control of your retirement income and make a successful transition from saving to spending.

Tip 2. Term Deposits – don’t put all your eggs in one basket

This mistake is easy to make – term deposits certainly have their place as they provide certainty and security. Unfortunately they don’t pay you much interest, and you can’t access funds (unless you’re prepared to pay a penalty) until they mature. In addition, term deposits are not an adequate hedge against the erosive impacts of long term inflation. Global interest rates are historically low and that doesn’t look like changing anytime soon, so it’s best to look for other ways to help maximise your hard earned savings.

Tip 3. Know how much life costs.

The Westpac Massey Fin-Ed Centre has taken a long, hard look at living costs for retired people in New Zealand. Their 2019 report says:

"... a two-person household living in the city would need to have saved $787,000 to fund a ‘choices’ lifestyle, while a couple living in the provinces would need to have saved $493,000. The lump sums required for a ‘choices lifestyle’ for a one-person household are $764,000 and $411,000 for metropolitan and provincial areas respectively” … “A metropolitan two-person household with a ‘no frills’ lifestyle would still require savings of $261,000 at retirement to supplement their superannuation.”  

If you want any extras you’ll have to add a few hundred dollars to those amounts.

Currently, NZ Super pays $411* per week for someone living alone or $633* for a couple. So it’s best to start planning now how you can make up the difference.

Tip 4. Know how long your savings will last.

Kiwis now enjoy a much longer life expectancy. However, many people don’t realise just how long that is. If you reach 65 you can now expect to live another 18 years (if you’re a man) or more than 21 years (if you’re a woman). Life expectancy continues to go up so if you’re only 55 now, chances are it will be even more when you get to 65. As a result you could be facing a situation where you’re retired for a third of your life, and reliant on retirement income all that time.

When you look at things in this light you need to start thinking of ways to protect your savings while still growing them.

Retirement Income to last the rest of your life

Depending on your individual circumstances, Britannia’s Lifetime Retirement Income Fund may tick both these boxes. It combines longevity insurance to generate lifelong payments and managed investment funds to deliver growth (with gains locked in annually).

Need to know more? Talk to Britannia. We’re here to help.

Call us on 0800 500 811 or email us at 

If you have a UK pension, KiwiSaver account, a Term Deposit about to mature, or if you’re just interested to see how much you could receive every month with the Lifetime Income Fund, the first step is to get in touch.

*NZ Super rates current as at 1 April 2019 with net rates based on M tax rate. The couple rate is the total paid where both qualify.


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Product Disclosure Statements for the Britannia Retirement Scheme and the Integral Master Trust are available from the Scheme's issuer, Britannia Financial Services Limited, phone 0800 500 811.

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