Managing your cash in retirement.

Once you have reached retirement age, it is time to relax and enjoy the rewards of your labours. The mortgage is paid off, your children are independent, and you have saved a tidy sum of money which will supplement your National Superannuation and allow you to enjoy a comfortable life.

But will your savings be enough?

In many countries, retirees purchase annuities to help fund their living expenses once employment related income ceases. The purchaser pays a certain capital sum to guarantee a certain income for the remainder of his or her life.

Annuities have not been popular in New Zealand because they are tax inefficient. Income derived from an annuity is taxed at the rate of 33 cents per dollar where a retiree's income may often only be taxed at 17.5 or 10.5 cents per dollar.

Because annuities in New Zealand are tax inefficient, First Mortgage Trust has identified the need for a financial product which still provides regular cashflow, but with the benefits of the lower tax rate regime. This may be provided by a Group Investment Fund or PIE (Portfolio Investment Entity) Fund.

How can First Mortgage Trust help manage your cash in retirement?

You can invest your funds in First Mortgage Trust Group Investment Fund or First Mortgage PIE Trust according to your own particular tax circumstances. We suggest you consult your professional advisor to ascertain which fund is best for you.

Our current Product Disclosure Statements, covering both of these funds, provide the information required to comply with the provisions of the Financial Markets Conduct Act 2013, along with an investment Application Form.

What are the benefits you receive from investing in First Mortgage Trust's "Managing Cash in Retirement"?

  • You will receive regular cashflow to supplement your living expenses.
  • It is simple to understand.
  • It provides tax efficiency via either First Mortgage Trust Group Investment Fund or First Mortgage Trust PIE Trust.
  • There is no establishment fee.
  • You have comfort in the knowledge that the funds are secured by first registered mortgages over land and buildings in New Zealand with relatively conservative Loan to Valuation ratios.
  • Your investment is supervised by an independent trustee company.
  • You may request that the arrangement be varied or terminated at any time.

Use our CALCULATOR to assess how long you might be able to draw a fixed monthly amount from your investment before your savings have been consumed.

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