Today’s low-interest, higher-inflation environment demands new strategies when it comes to retirement income. The days of living off the returns alone or drawing down a fixed percentage each year (4 per cent) simply don’t work any more.

Under New Zealand regulation KiwiSaver providers are required to provide their customers with a simplistic retirement income projection based on a single investment return, single tax rate and the assumption all New Zealanders have the same life expectancy of age 90. This is basic and may well prove to be misleading for many of today’s retirement savers.

Lifetime Retirement Income, founded by former AXA and ACC chief executive Ralph Stewart, is changing the way we think about retirement income.

“Calculating a reliable retirement income that will last a lifetime is deeply personal and anything but static or linear. Every saver in retirement deserves a dynamic personal projection that identifies their individual circumstances. This in turn should be regularly reviewed and recalculated to maintain accuracy and relevance.”

How much income could you draw in retirement?

Lifetime Retirement Income has set out to help retirees do just this. Lifetime has a retirement income fund specifically built for those in retirement who want to draw an income. It helps you design an income which suits you and manages a safe drawdown of your income. Each year it is reviewed to ensure you are not overspending, or underspending.

Liz Koh, a New Zealand’s leading retirement income specialist, believes one of the biggest challenges for retirees is how to plan the use of their retirement nest egg.

“Accumulating savings and investments during your working life is hard work. It requires discipline and sacrifice to set aside funds for later in life and there is a sense of immense relief in getting to retirement with a decent lump sum set aside.

What I really like about Lifetime is that they understand retirees. They know that managing your investments to spend in retirement is different to saving for retirement. It requires different strategies.”

The saving industry manages assets to support the accumulation of savings while working. The emerging retirement income industry does the opposite, it helps retirees spend their savings over their retirement lives with confidence. It’s time to recognise the difference.

As the migration out of the workforce into retirement gathers momentum, the importance of understanding the differences between saving for retirement and spending in retirement becomes all important.

At Lifetime we have an affinity and passion for developing transparent, low-cost, high value retirement income solutions that New Zealand retirees can have confidence in.