A retirement income plan is not something you set once and forget. As markets shift, living costs rise and personal circumstances change, it is worth checking whether your income strategy is still doing what you need it to do. In “Is your retirement income plan on track?”, Lifetime Retirement Income explains why regular reviews are important and how small adjustments can help keep your retirement plans aligned with real life.
The article looks at key questions retirees should consider, from whether their income is keeping pace with expenses to how long their savings may last. It is a useful reminder that staying on track is not about having a perfect plan, but about staying informed, flexible and prepared.
You can read the original article here: Is your retirement income plan on track?.
Or you can read the article published in full below and tell us what you think in the comments section.
Times are tough, and it doesn't look like relief is on the way for retirees anytime soon. But putting your head in the sand and continuing to spend blindly are not options that will help anyone.
With the 1 April NZ Superannuation increases now flowing through to your bank accounts, it’s a good time to review your budget and reassess your retirement income plan.
Critically, retirement income plans are not set-and-forget. An annual check-in is vital to ensure your plan is on track. It also means you're well-positioned to make changes before it's too late.
Review your expenses:
Review your current income streams:
The critical question: Upon your review, is your retirement income still covering your day-to-day expenses? If the answer is no, you're not alone – and it may be time to change your plan.
As well as NZ Super, there are several other valuable benefits retirees might be entitled to which could help reduce day-to-day living costs:
The Winter Energy Payment: These started 1 May, and are paid until 1 October. If you are on NZ Super it's paid automatically, providing extra support during the colder months.
Community Services Card: Reduces healthcare costs for low-income earners and those receiving certain government benefits (such as the accommodation or residential care supplements) – superannuitants included.
SuperGold Card: You should receive this around the same time as your NZ Super payments start. It provides a wealth of benefits and discounts, including for transport, groceries, entertainment, and health and wellbeing services. It's worth asking whether there's a SuperGold discount whenever you pay for or book something. Every little bit helps.
Many retirees are hesitant to touch their savings, preferring to live only on the income their investments generate. While this approach feels safe, it can mean unnecessarily restricting your lifestyle – especially when you've worked hard to build that nest egg.
It's essential to think long term – longer than you might expect. Actuaries who specialise in mortality risk suggest that people retiring these days should assume they'll live to between 90 and 95 years old. That means you'll need an income that lasts up to 30 years.
The key is finding the right balance: drawing down enough to enjoy your retirement without running out of money too soon.
If capital drawdown is not part of your plan, you may not be getting the most out of your retirement income. At Lifetime Retirement Income, we know this can be a scary concept to manage on your own – which is why we developed the Lifetime Retirement Income Fund.
Historically, term deposits and property investments shaped many Kiwis' retirement income plans. But today, there are more options available, each with different benefits and trade-offs.
Term deposits: Provide security and fixed returns, but in today's environment, interest rates may not keep pace with inflation, meaning your purchasing power gradually erodes.
Rental property: Can provide regular income, but comes with management responsibilities, maintenance costs, and the risk of periods without tenants. It also ties up a significant portion of your wealth in a single asset.
KiwiSaver and investment funds: Can continue to grow in retirement, but you'll need to manage withdrawals to ensure your money lasts carefully.
This is a managed drawdown fund designed specifically for retirees. It invests your retirement savings in a diversified portfolio. Then it distributes your savings and the investment returns (after fees and taxes) in regular fortnightly income payments that can continue for your nominated lifetime.
How it works:
Your capital is invested in a balanced portfolio managed by professional investment managers.
You receive regular fortnightly income payments directly to your bank account.
The fund is designed to provide income for your nominated lifetime (typically to age 90-95).
Each year on your birthday, your income is recalculated based on your remaining balance, investment returns, and life expectancy.
Payments are not guaranteed and may change from one year to the next based on fund performance and your circumstances.
Key benefits:
Takes the guesswork out of how much you can safely withdraw each year.
Provides professional investment management.
Gives a regular, predictable income stream.
Is flexible to adjust as your circumstances change.
If you're one of the thousands of Kiwi retirees who have a mortgage-free home but are struggling to get by on NZ Super alone, tapping into your home's equity could be an option worth considering.
Lifetime Home is NZ's first and only debt-free home equity release product. Unlike reverse mortgages, which create debt, Lifetime Home allows you to sell a minority share of your home (typically 35%) in exchange for a fortnightly income stream spanning up to 10 years.
How it works:
Key benefits:
An income derived from the gradual drawdown of savings over a long period needs to be managed carefully. Plans should be reviewed at least once a year to ensure the amount being withdrawn is sustainable, or whether your income should be tweaked to reflect fluctuating investment returns, inflation, or mortality risk.
What you should review annually:
Lifetime Retirement Income recognises that everyone's retirement plan is unique and circumstances can change over time. That's why Lifetime Retirement Income Fund customers have their income calculation reassessed every year on their birthday. That way, we can ensure your retirement plan is the very best fit for you.
Have you thought about Lifetime Retirement Income to look after your money in retirement?
They know that people spending in retirement require significantly different strategies to those who are saving for retirement. They manage retirees money a little differently to people who are saving for retirement. The reason for that is we have to make sure retirees savings last.
So click on the button below and take a couple of minutes to read all about them.