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Making your retirement funds go the distance

Retirement is a marathon, not a sprint. So, here are some tips to ensure your savings last as long as you do.
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Are you on track for the retirement lifestyle you’re envisioning? Retirement is a marathon, not a sprint – so planning for your ‘golden years’ is an important part of your financial strategy.

In this quick guide, we’ll look at the key things to consider, to ensure your retirement savings last as long as you do. Remember, the earlier you start preparing, the more options you will have when the time comes.

What kind of retirement are you dreaming of?

Retirement means different things to different people. Some people look forward to more leisure time, or the opportunity to start something new. Others would like to travel more or spend more quality time with their family.

So rather than focusing on retiring from something – your full-time job – it’s a good idea to consider what you’ll retire to.

How much money will you need?

The answer to this question depends on the sort of retirement you have in mind.

Of course, it can be difficult to wager a guess on how much money you’ll realistically need. To help you get started, you can try some of the calculators available online, like this one from

Alternatively, consider some common rules of thumb. For example, aim to have seven times your current household income saved for your retirement nest egg. Or you might focus on saving 13 per cent of your annual income each year.

Keep in mind that these figures are not personalised to your journey, but rather based on generic assumptions and estimates. Having said that, they can give you a rough understanding of where you’re at, and how far or close you are to your goal.

For a more personalised assessment, consider seeking financial advice – get in touch to learn more.

What’s your financial ‘big picture’?

Once you’ve determined how much you think you’ll need in retirement, the next step is to work out where you’re at and what tools you have in your toolbox.

For example, do you have any financial assets – like a property or investment accounts? What are they worth? How much money do you currently have saved?

Answering these questions will help you get a clear picture of where your retirement income may come from. For example, you may look at selling the family home and downsizing. Or you might be able to rely on several investment vehicles – including KiwiSaver, shares, or your ROPS fund.

Plus, is continuing to work an option for a while? Working part-time for a few more years could delay drawing down on your assets, helping stretch your savings for longer.

What about the New Zealand Superannuation?

NZ Super may also be part of the picture. To be eligible, you need to be aged 65 or over, be a legal resident of New Zealand, and have lived here for 10 years since age 20. It’s key to note here that starting in July 2024, the residency requirement will be gradually increased to 20 years by July 2042.

The level of NZ Super payments is set by the Government each year, and adjusted to take into account inflation and average wages – check out the current rates here. However, as welcome as this financial support is, according to the latest NZ Retirement Expenditure Guidelines, NZ Super is unlikely to be enough to fund most people’s living costs. The key thing is to put a plan in place to bridge the pension gap.

How do you plan to access your retirement income?

When it comes to your options, there’s a great degree of flexibility about how you turn your savings into a retirement income.

Generally speaking, you may look at withdrawing lump sums or taking a smaller regular income for the rest of your life. Also known as ‘drawdown’, this latter option allows you to leave your money invested, so that your funds can continue to deliver returns.

To manage investment risk, some people choose to divide the allocation of their money into three ‘buckets’. The immediate bucket is for money that you need to access now, usually kept in a low-risk or cash account. The intermediate bucket is for expenses you plan to make from years two to ten, which might be allocated in a medium-risk fund. And lastly, the long-term bucket is for funds that you don’t plan to touch for at least a decade, which could be invested at a higher level of risk.

Plan around your lifestyle decisions

One rule of thumb recommends withdrawing between 4 and 5 per cent, and no more than 5 per cent, of your household retirement savings in the first year of your retirement. Then, you can adjust that amount over time for inflation.

Of course, your needs might be different, so it’s a good idea to plan a course that suits you. For example, you may like to spend more in the earlier stages of retirement for travel, renovations, and big-ticket items like a boat or a motorhome. And down the line, you might sell your home and downsize, freeing up equity and generating a higher living income.

Review your journey

Whatever your plans are, make sure you review your finances on a regular basis, ideally once a year.

It may be worth seeking expert advice early in the process. A financial adviser can help you structure a diversified investment strategy and map out your lifestyle and needs, so you can make well-informed decisions about your future. Plus, they’re there to answer any questions you might have and check that you’re on track for the lifestyle you’re envisioning.

We’re here to help

Are you a UK ex-pat living in New Zealand or a Kiwi who returned from the UK? Keep us in mind: we’re UK pension transfer experts. We can help you understand if a pension transfer is an appropriate move for you, so that you can make a well-informed decision about your future.

Like to know more? Click here to contact us.



Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance. Past fund performance is no guarantee of future returns.