<<First names>> <<Surname>> <<Membership number>> Kia ora You’ve spent many years saving for retirement. As you get closer to that milestone, you might have questions about how you are going to manage that money going forward. How much will you need on top of New Zealand Superannuation? How much will you be able to afford to spend? This email includes some ideas and resources you might find useful. Financial advice from Mercer It’s a good idea to review your investment strategy in the lead-up to retirement. Conventional wisdom is that, the closer you are to needing to draw on your savings, the more conservative your investment strategy should be. That doesn’t mean you need to have all your money invested in a low-risk fund on retirement. At that point, you may need your savings to provide an income for 20 years or more, so you still need money invested for the long term. Talk to the financial advice team at Mercer if you need help working out an appropriate investment strategy. There is no individual charge to you for this service. To arrange a time to talk, sign in to your account online and complete a call-back request form. What income could your savings generate? You probably track your PSS balance, but you might be less sure about what level of income that sum might generate in retirement. Our retirement income calculator is a good place to start. This online tool has been specially adapted for PSS members. It pre-populates with your account information and estimates your retirement income (based on spending down capital and interest). Play around with different scenarios. What happens if you make additional voluntary contributions? What if you change your investment strategy? What if you retire later or increase or reduce the number of years you expect your funds to cover? You can also include your partner’s savings, including KiwiSaver, or you can use this function to include your own KiwiSaver balance and contributions. The calculator has a tutorial to get you started. You can access it by signing in to your account. For a quick calculation, there are various rules of thumb you can use to estimate how much you can afford to spend in retirement. You might find this article by financial journalist Mary Holm useful. Think about leaving your savings invested in PSS You don’t have to withdraw your money when you leave Police. You can leave some or all of your money invested in the scheme and become a retained member. That way, you can use the scheme to help you manage your money in retirement. The PSS has a number of features that make this an attractive option. • The scheme is a portfolio investment entity (PIE), which means PSS investment earnings are taxed at rates based on individual members’ incomes. Typically, your income drops in retirement, and you may qualify for a tax rate lower than the default rate of 28%. • As a not-for-profit scheme, our fees are low by industry standards. This survey of fees provides a useful comparison of fees charged by KiwiSaver and workplace savings schemes in New Zealand. • You can split your savings across a number of investment options and nominate which fund you want payments to be made from. This means you can invest money you plan to spend in the near term in a low-risk fund and money you plan to spend in the longer term in a higher-risk fund or funds. You’ll find information on this approach in Sorted’s guide to managing your money in retirement. • You can set up a regular withdrawal paid to your bank account on the 20th of each month – effectively paying yourself a pension. You can change the amount when you need to. There is no set-up or benefit payment fee for regular monthly withdrawals. If you have this facility set up, you need to maintain a minimum balance of $1,000. • You can also make one-off withdrawals of $5,000 or more (a benefit payment fee applies) as long as you maintain a balance of at least $5,000. The leaving form includes a section you can use to let us know if you want to leave your money in the scheme. Age 65 withdrawal You might be thinking of restructuring your finances as you approach retirement such as paying off a mortgage. PSS gives you access to your savings from age 65 while still in service. If your savings are invested in more than one fund, you can choose which fund you want a payment made from. You can access funds in your member’s and employer’s accounts. Again, get in touch with Mercer’s financial advice team if you would like to talk through your options. Making a withdrawal will not affect your contributions to the scheme, which will continue as usual along with any contributions Police makes on your behalf. You can read more about the age 65 withdrawal here. Ngā mihi Annabelle Brosnahan Administrator P.S. You can make additional voluntary contributions of between 1% and 10% of your salary as regular deductions from your pay if you want to boost your savings as you get closer to retirement. Complete the voluntary contributions form and return it to Payroll. helpline / waea āwhina 0800 777 243 hours / 9.00am to 7.00pm - Monday to Friday (excluding public holidays) PSS Trustees Limited is the issuer of the Police Superannuation Scheme (PSS). A copy of the PSS product disclosure statement is available under documents and forms and on the Disclose Register.