The advice opportunity hiding inside the retirement income gap

Our day-to-day interactions with retirees at Lifetime Retirement Income offer a front-line view of the pressures they face, and concerning trends are emerging.

It’s often in the media, and we’ve been hearing it anecdotally – many retired clients are struggling. The gap between NZ Superannuation and the real cost of living is widening, and many retirees are finding it difficult to manage this divide sustainably. 

To better understand the scale and nature of these issues, we surveyed clients and Lifetime newsletter recipients, with more than 700 responding from across the country – the majority of whom are aged 65 and over.

The results show that retirees are not facing isolated cost increases – they are experiencing a broad-based squeeze across essential areas of expenditure, including everyday living costs, council rates, and things like dental care costs. At the same time, concerns about the adequacy of NZ Super are becoming pronounced.

“Retirees are not worried about one thing – they’re feeling pressure across almost every essential area of daily life,” says Lifetime Retirement Income founder and managing director Ralph Stewart.

Bridging the gap – or burning through savings

The data highlights the depth of the issue and some concerning flow-on effects. This includes:

• 40% of respondents report difficulty affording council rates.
• 39% were finding it hard to manage on NZ Super due to rising costs.
• Cost of living was the dominant concern (77%), but things like healthcare waiting times and access to GPs (58%) were problematic too.
• About 36% were concerned about the current NZ Super rates.
  
  

Crucially, more than half of respondents (51%) are actively drawing down on their personal savings to fund day-to-day expenses.

From an advice perspective, this increasing reliance on ad hoc withdrawals is a key risk area.

"Without a structured approach to managing longevity, sequencing risk, and inflation, retirees can unintentionally erode their capital at an unsustainable rate,” Stewart says.

The advice gap

One of the survey's striking findings was the limited use of financial advice in this complex area of retirement income planning.

• 41% of respondents say they are not using any financial planning or advice services, including advice from banks, accountants, lawyers, or even family and friends.
• Only 28% were engaging with a financial adviser.
  
  

While the survey didn’t account for whether respondents had received financial advice earlier in life, it aligns with recent research from the Financial Markets Authority. Its March Access to financial advice in New Zealand report found only 17% of those aged 60+ had used a financial adviser in the last 12 months, while the 50-59 age group was also below the average at 21%. The report highlights that this is notable given that 53% of respondents recognised that advisers could help with retirement planning.

Intergenerational pressures

The Lifetime Retirement Income survey also highlights another important dynamic that may influence client behaviour – worrying about family.

Many retirees expressed concern about the financial well-being of their children and grandchildren, particularly regarding cost-of-living pressures, job opportunities, and housing affordability.

“This creates a tension in retirement planning,” Stewart says.

“Clients may feel compelled to preserve or use capital to support family, potentially at the expense of their own income security.”

Moving forward

These findings reinforce what many advisers are likely already seeing in practice: retirement income planning is becoming more complex, more dynamic, and more critical to client wellbeing.

Stewart says Lifetime’s regular engagement with the retired community gives it an insight into these pressures and a responsibility to advocate where possible. Its survey findings have already gained national attention, with coverage across outlets including Radio New Zealand, Stuff, and Newstalk ZB.

It intends to repeat the survey next year to track how retirees’ concerns evolve.

Try our Adviser Income Calculator today or talk to Chelsea Devlin about a distribution agreement for Lifetime Retirement Income.

Previous articles in this series include:

• Why does everyone have to live to 90?, exploring the challenges of longevity planning; and
• Are your clients’ retirement drawdowns at risk of revision? Examining why a robust actuarial framework is essential to avoid repeated drawdown changes.