Hartman says the stakes are high for retirees. “People don’t get any practice at doing this - at drawing down over time, at planning their spending over decades. If they get it wrong, no pressure, but you don’t really have the recourse typically to go back and build up all that money all over again.”
To help, the Retirement Commission has launched a first-of-its-kind tool on its website Sorted.org.nz to help those heading into retirement model how to draw down their savings so the money lasts.
The Retirement Navigator utilises the Society of Actuaries’ four rules of thumb for drawing down your money: the 6% rule, the 4% rule inflation-adjusted rule, the fixed-date rule, and the life-expectancy rule. It guides users toward the most relevant approach based on their inputs and then projects the probabilities of how long their funds might last under different conditions.
It’s not just about ensuring your money lasts, but providing the confidence to enjoy life. Hartman says, “There is significant levels of fear out there about spending at all, and what can happen is that people are selling themselves short or not living as well as they could”.
Unlike similar calculators overseas, the Retirement Navigator doesn’t steer users to investing in any particular product - and it’s free to use. “It’s there as a public service,” Hartman says, “to help people chart their future and make informed decisions about how much they’re going to spend over time.”
Listen to the full episode of The Prosperity Project for more
The podcast is hosted by Nadine Higgins, an experienced broadcaster and a financial adviser at Enable Me.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts. New episodes are released every Monday.
