retirement income (3)

When it’s time to flick the switch and enter retirement, the decisions you make with your money become even more important. What’s less clear, perhaps, is setting up your savings to help maintain your quality of life into the future. 

As Richard Clark, product manager at SBS Bank, explains, “Once retired, a senior will usually not have significant surplus income after paying their expenses. They therefore need to transition from expanding their wealth to maximising the income their wealth can generate from lower risk investments.”

The fiscal challenge facing self-funding retirees

Seniors on a fixed income are often in a tricky position, investment-wise. Their investment profile changes for the savings they have accumulated, with the focus shifting to more shorter term, lower risk investments which generate a steady income stream to supplement their base income.  The sort of investments that traditionally deliver higher returns are usually not as appropriate as they were previously.

“When a young person is saving for retirement they have time to rebound if an investment loses value through failure or market fluctuation. A senior does not have the same luxury of time with their accumulated retirement savings. Therefore the range of suitable investment options available to them is reduced to mainly lower risk alternatives,” Mr Clark explains.

What sort of investments should retirees seek?

As a result of the challenges outlined above, if seniors are seeking investments to supplement their retirement income these ideally should be weighted towards providing reliable returns which are appropriate for the lower level of risk a retiree is usually more comfortable with. These investments are a sensible alternative to historically more volatile options like shares, which are more susceptible to capricious forces like market fluctuation.

So, what options are available?

There are a wide variety of low risk, income generating investments available to investors. Of these options, a registered bank, like SBS Bank, provides self-funding retirees with an excellent option, allowing them to generate a steady income stream with a reputable, lower risk, organisation which has a long history of providing investments to members.

Institutions like SBS Bank often offer Term Investments that provide a realistic way for retirees to draw an income in retirement. As Mr Clark notes, “Bank Term Investments are low risk and provide stable, fixed income and return of capital invested at maturity. Our term investments are provided for set terms that suit the investor between one month and five years. So you know when you can access your money.” 

Registered banks like SBS Bank are subject to close scrutiny and must maintain prescribed levels of capital which helps hedge them against risks including varying market conditions and economic climates.

Even if you’ve banked with the same institution over the years, moving some money to another registered bank can be a great way to diversify your savings away from one organisation and ultimately lower your risk.


When you enter retirement the decisions you make with your money are crucial. If you’re looking to use savings to provide an income in retirement, you want the comfort of an investment that provides stable returns at low risk.

A registered bank like SBS Bank is a good choice. For more information on Term Investments including the Southland Building Society (SBS Bank) Investment Statement for Term Investments, visit the SBS Bank website here.