With a bit of luck and hard work, you will arrive at retirement with a pot of money to supplement your income from NZ Superannuation and allow you to live comfortably.

The problem is, so many uncertainties lie ahead. How long will you live? How much money will you need? What will your investment returns be? Where should you invest your money?

The most conservative approach to take is to assume you will live until at least 90, as the average life expectancy for 60-year-olds is about 30 years for women while men are catching up fast.

Having set your time frame, there are two very important questions which you must ask in order to know what to do with your pot of money.

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Who is going to spend my money? As they say, you can't take it with you, so there are only three choices here. You and your partner can spend it during your lifetimes.

Your children, grandchildren or other family members can spend it. Alternatively, you can leave it to someone outside your family, such as a charity, to spend. Divide your pot of money amongst these three groups.

When is it going to be spent? Your investment strategy needs to be matched to your investment time frame. For each group of spenders, break down their pot of money into three time frames: the first five years of retirement, the next five years after that, and the remainder (10 years or more after retirement).

Bequests to family members or charities will occur on death, however you may wish to make gifts during your lifetime. Now that you have the amounts and time frames, you can invest and use up each amount during the time frame allocated to it.

- Liz Koh is an Authorised Financial Adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847. For free eBooks, go to www.moneymax.co.nz and www.moneymaxcoach.com