How Britannia can revolutionise your retirementIn the last issue of Money Matters we talked about the difference between how much money people need when they retire, and the amount provided by New Zealand Superannuation.
Massey University researchers have labelled it the ‘retirement income gap’ and their research is a timely reminder that most retirees will have to find ways to bridge that gap if they want to maintain their current lifestyle while making their savings last.*
At Britannia we’ve introduced an approach that we believe revolutionises retirement planning in New Zealand. Our new product is based on a proven international concept that we’ve adapted to work for individuals retirement needs, and is a great way for people to address an income gap in their retirement.
It’s our Lifetime Income Fund and it converts UK pensions or other retirement savings into a regular fortnightly or four weekly income. The income amount paid stays the same, regardless of market movements and will last the life of the investor. Anyone who chooses this option can receive their retirement income benefits for as long as they’d like, or they can redeem any remaining balance of their investment at a time which suits.
The savings are insured so that investors receive regular payments for their entire life. In other words, they won’t outlive the savings they worked hard to accumulate. When an investor passes away any remaining balance is paid to their estate. To provide you with greater certainty of how much you’ll have when you wish to start taking your retirement income, there’s also a great feature so that on each anniversary of your membership your future retirement income is protected from market declines whilst gaining from any market upside.
Whether you’re nearing retirement, or you’re already retired and interested in a plan that will provide you with a regular income as well make your savings last, we’d love to talk to you. Give us a call on 0800 500 811 for a no obligation chat or email us at firstname.lastname@example.org.
Four simple tips for a rewarding retirementThe first rule of retirement income is ‘make sure you never run out of money.’ The second rule of retirement income is – you guessed it – ‘make sure you never run out of money.’
Tip 1. Plan your transition from saving for retirement, to spending in retirement.
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 simple tools that will help you take control of your retirement income and make a successful transition from saving to spending.
Tip 2. Don’t put all your eggs in a term deposit.
Tip 3. Know how much life costs.
Currently, NZ Super pays $390* per week for someone living alone or $600.30* for a couple. So it’s best to start planning now how you can make up the difference.
Tip 4. What’s the life expectancy of your savings?
Want more? Talk to us.
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 2018 with net rates based on M tax rate. The couple rate is the total paid where both qualify.
To work or not to work? Life beyond 65.According to new research, almost half of us plan to help fund our retirement by... not retiring! A survey of more than 2,000 people that was commissioned by BNZ found that more than 18% of us are committed to a full-time job past the current pension age of 65, while a further 30% of us intend to work part-time.
Most people chose to continue some form of work for reasons that aren’t purely financial. A sense of purpose and satisfaction, maintaining social contacts and wanting to keep using their life-long skills are just a few examples.
Money, though, can’t be ignored as a major factor in retirement choices.
People who have already retired can give us a good indication of what pre-retirees will soon face. More than half the people surveyed who were over the age of 65 used employment to pay for non-essential things like travel, while 31% said they needed the money to pay essential bills.
Aside from paid work, the BNZ survey found the majority of New Zealanders expected superannuation savings, either old-school workplace schemes or KiwiSaver funds, would be their back-up plan to support an above pension-level lifestyle. Another 34% had income outside super, such as rental properties or shares, while about a quarter expected to generate retirement spending money by downsizing their homes.
Disclaimer: This publication has been prepared for your general information. While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken for any errors or omissions. This publication does not constitute financial or insurance product advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. No part of this publication may be reproduced without prior written permission from our company.