This guide provides general information only and is not personalised financial advice. Because every person’s circumstances are different, we recommend seeking professional advice before making financial decisions.
Retirement is More than Reaching an Age
For many New Zealanders, retirement is something we look forward to, but few people have a clear plan for how it will actually work.
Retirement planning is not simply about stopping work. It is about having the confidence that your financial affairs are well managed so you can focus on the things that matter most to you, whether that is travelling, spending more time with family, pursuing hobbies, helping your children or grandchildren, or simply enjoying the freedom to choose how you spend your time.
Everyone's retirement looks a little different, and that means every retirement plan should be different too. At Tōtara Wealth, we help clients answer three important questions:
How much will you need?
How will you access your money?.
How long will your money last?
These three questions form the foundation of a successful retirement plan.
How much will you need?
Simply put, there is no single "magic number" for knowing how much you will need in retirement. Some people are perfectly comfortable living on New Zealand Superannuation, supplemented by modest savings. Others want the freedom to travel regularly, renovate their home, help family financially, or simply enjoy a higher standard of living.
The amount you need depends on many factors, including:
• The age you plan to retire
• Your expected lifestyle
• Whether you own your home
• Your current income, savings and investments
• Any income sources, in addition to New Zealand Superannuation, that you expect to receive during retirement
• Your health and future care needs
• Inflation over what could be a retirement lasting 25 to 35 years
Rather than relying on rules of thumb, we work with clients to estimate the level of income they are likely to need throughout retirement and compare this with the financial resources available to them.
The goal is not simply to accumulate the largest portfolio possible. It is to have the confidence that your financial circumstances can comfortably support the retirement lifestyle you want.
How will you Access your Money?
One of the biggest adjustments in retirement is moving from receiving a regular salary to creating your own income.
For most clients, retirement income comes from several sources:
• New Zealand Superannuation
• KiwiSaver
• Investment portfolios
• Rental income
• Term deposits or cash investments
• Other personal investments
Our role is to bring these together into a coordinated retirement income strategy.
For many clients, we establish a regular monthly withdrawal from a diversified investment portfolio that we manage according to their needs and risk profile. This provides a regular and reliable income to supplement New Zealand Superannuation and any other income sources.
This approach is designed to feel much like receiving a regular pay cheque while allowing your remaining investments to continue working for you. As your needs and circumstances change throughout retirement, we are here to help you decide what changes may be needed along the way.
How long will your Money Last?
This is often the question clients worry about most.
The answer depends on several factors:
• How much you have saved
• Your annual spending
• Investment returns
• Inflation
• Tax
• Unexpected expenses
• How long you live
No one can predict the future with certainty, but good planning helps manage uncertainty.
Using financial modelling, we can estimate how different spending levels and investment returns may affect your portfolio over time. We also help clients understand which factors are within their control, such as spending, and which are not, such as inflation and investment markets.
This helps answer important questions such as:
• Can I afford to retire now?
• How much can I comfortably spend each year?
• What happens if investment markets experience a significant downturn early in retirement?
• Can I afford to help my children financially?
• What happens if I live into my nineties?
Understanding these possibilities allows you to make informed decisions with greater confidence
Retirement is Not a One-off Decision
Retirement planning does not finish the day you stop working. In many ways, that is when the journey begins because:
• Markets change
• Interest rates change
• Tax rules change
• Your spending patterns evolve
• Life brings opportunities and sometimes unexpected challenges
That is why ongoing advice is so valuable, both before retirement and throughout your retirement.
Regular reviews allow us to monitor your income, investment strategy and long-term sustainability, helping to ensure you remain on track regardless of changing circumstances.
Bringing It All Together
Successful retirement planning begins by answering three important questions.
How Much Will You Need?
By understanding your lifestyle goals and expected expenses, we can estimate the level of income required to support the retirement you want.
How Will You Access Your Money?
A well-designed withdrawal strategy can provide a regular income while allowing your investments to remain appropriately invested for the years ahead.
How Long will your Money Last?
Retirement may last 25 years or longer. Ongoing planning and regular reviews help ensure your investments continue to support your lifestyle throughout retirement.
Our goal is not simply to help you accumulate wealth. It is to give you the confidence to use it.
Why Professional Advice Matters
Retirement is one of life's biggest financial transitions. The decisions you make about when to retire, how to invest, how much to withdraw, and how to manage risk can have a significant impact on your long-term peace of mind.
A personalised retirement plan provides clarity, confidence and flexibility, helping you enjoy retirement knowing there is a thoughtful strategy behind your decisions. It is an investment in your future and your peace of mind.
A Final Thought
Retirement planning is not about trying to predict the future perfectly.
It is about preparing for it thoughtfully.
The most successful retirement plans are not necessarily those with the largest portfolios. They are the ones built around realistic goals, sensible investment strategies and the flexibility to adapt as life changes.
You do not have to have every answer today. Retirement is rarely a straight line, and neither is life. Together, we can help you understand where you are today, where you would like to be, and develop a plan that can adapt as life changes.
If you would like to chat to us about Retirement Planning, please email us admin@totarawealth.co.nz or give us a call on 03 548 9000.