21 June 2022

    Retiring soon? Spread your wings ‑ and your risks

    Diversify your investments to protect and grow your life savings

    Retirement isn’t what it used to be. It lasts longer than it used to – around ten years longer than if you’d turned 65 in 1982*.

    Your retirement’s likely to last longer than your parents’, and you’re likely to expect more from your retirement than they did. A 2022 survey of 1,000 Kiwis over 50 found that many see retirement as a time to spread their wings^. Half of us see retirement as a time for new adventures — and a third of us plan to reinvent ourselves!

    Your retirement portfolio should give you flexibility — and real returns

    When you retire, or start to work less, your investments should give you the lifestyle and flexibility you want. So where to put your money? You have lots of options, including bank savings, term deposits,  property,  shares, KiwiSaver, or managed funds. Maybe you already have a few of these – but which works best for your goals?

    Some assets in your portfolio won’t give you the flexibility to deal with the unexpected. For example, property can’t easily be turned into cash if you decide to take a spur-of-the-moment trip or replace an unreliable car.

    Term deposits are low risk, but with relatively low returns and flexibility, as your money’s locked up for a fixed time. Pair this with the current rate of inflation - 6.9% in the first quarter of 2022 – and the spending power of your money could be slowly eroding if it’s in a term deposit or savings account.

    Diversify to manage risk and smooth out returns

    Diversifying means holding a mix of investments that deliver the returns for the retirement you want – with a level of risk you’re comfortable with.

    For example, income assets like bonds tend to be lower risk and deliver lower returns. Shares and property are ‘growth’ assets that can deliver high rates of return in the longer term, but with higher risk and volatility (how often prices go up or down).

    Diversifying your investments reduces your investment risk because your investment eggs are spread across a range of asset baskets. And holding a range of investments at different risk levels can help to smooth out returns over time.

    Managed funds help diversify your portfolio and protect real value

    Managed funds make diversifying easy. They help you balance risks and returns, and protect the real value of your money. Each fund has a mix of assets that offer different levels of potential returns, and levels of risk and volatility. And whilst they are designed for long term investing, they’re flexible too – you can add and withdraw money whenever you want to support your lifestyle.

    Talk to us about your retirement goals

    Our advisers can talk you through how managed funds work or answer any questions you may have. They’ll help you decide on funds that suit your goals and risk appetite, so you can have the retirement you’re waiting for.

    Talk to an adviser about your retirement plans or request an info pack for more information.

    *According to StatsNZ’s How long will I live? calculator

    ^According to The New Zealand Seniors Series: The Retirement Living Report 2022