Too many retirees are living more frugally than they need to because they’re too afraid to spend their hard-earned nest eggs. Yet, the days when we could supplement NZ Superannuation with investment returns alone, leaving our capital intact, are long gone.  

The thought of chipping away at capital to fund a desirable retirement is terrifying for many seniors, despite the fact that’s precisely what savings are there for. We work hard for our money, then in our golden years our money should work hard for us.

But there’s a science to making sure your money lasts the 20 or more years most people will spend in retirement. And without expert support and guidance, few retirees will have the confidence to structure their savings in such a way that it can provide them with a regular income that’ll last as long as they do.

So, they underspend. It’s entirely understandable, but it’s not right.

Money isn’t an end in itself. It’s a tool that can help you achieve your goals or maintain a particular standard of living. And there are a lot of retirees missing out on a comfortable, active, happy retirement because they haven’t made the necessary emotional and financial transition from ‘saving’ to ‘spending’.

But what’s the point of working so hard all your life then sitting on the proceeds because you’re too afraid to spend it?

The financial industry has done a great job preaching the gospel of KiwiSaver, but has typically provided less guidance for those at the next stage of the investment lifecycle.

Thanks to prominent and ongoing education campaigns, we’re all gradually getting our heads around how crucial it is that we save for our own retirements.

Calculate what you could draw in retirement.

But, the next part of that conversation is largely missing, which would help people get comfortable with decumulation, or how to spend in retirement.

The fact is, it’s daunting thinking about how to invest and manage your savings in retirement, when that lump sum has to last the rest of your life.

There are several factors that have to be considered, like life expectancy, optimal risk-adjusted investment returns, tax, inflation, and spending preferences during the post-work years. These things are often highly personal and far from fixed.

Which is where retirement income experts prove their worth. And it’s precisely the reason Lifetime Retirement Income exists.  

We use our proprietary tools to calculate a safe amount that retirees can draw down from their savings annually, tailored to individual circumstances. And we recalculate this every year, making any necessary adjustments to ensure the long-term sustainability of capital.

We then pay members a fortnightly income, made up of both investment returns and some of their original capital.  

By outsourcing their income needs to professionals, our members have gifted themselves the certainty and peace of mind to make the most of their post-work years. And that’s why we do what we do.

Lifetime Retirement Income provides a free online calculator that allows people to work out how much income they could receive from a given lump sum.