Retirement success should not be measured only by the amount a member has saved up until their last working day. We must also ask whether those savings can support a dignified life for as long as that person lives.
Living longer is something to celebrate. Running short of money while we are still alive is not. This is why longevity risk must be central to retirement planning, and why both fund members and trustees should consider the role CFP® professionals can play.
A longer life needs a personal plan
Longevity risk is the possibility that our financial resources will not support us for as long as we live. The problem can emerge before the money runs out: income may become insufficient to cover essential expenses, particularly as inflation erodes purchasing power.
The question is not simply, “How much can I withdraw this year?”
It is, “What can my household afford today without placing our futuresecurity at unacceptable risk?”
A CFP® professional helps members consider that question alongside their expenses, debts, other assets, healthcare needs, dependants and provision for a surviving spouse or partner. Retirement is not an isolated product decision. It is a household planning decision.
CFP® certification is grounded in education, examination, experience and ethics, supported by continuing professional development. That foundation matters when advice must connect income decisions with a household’s wider financial circumstances.
An in-fund option is not a personal recommendation
A well-designed fund annuity strategy provides a valuable starting point. However, a strategy selected for a group of members cannot account for every household’s circumstances. Members must actively opt into the fund’s annuity strategy; they are not automatically placed into an annuity simply because they have made no other choice.
Two members may retire at the same age with identical fund balances yet face very different realities. One may own a debt free home and have a spouse with a pension. The other may pay rent and support a dependent partner. The same starting balance does not mean the same income needs or capacity to carry risk.
Retirement benefits counselling helps members understand available options, but it is not personalised financial advice. Understanding an annuity and deciding whether it suits your life are two different conversations.
Importantly, professional advice should not begin with the assumption that money must leave the fund. Where an in-fund option is appropriate, recommending it may be the right advice. The value lies in the assessment, not in a transfer or product sale.
Know who carries the risk
Neither “in-fund” nor “default” means guaranteed income for life. A conventional living annuity leaves the retiree exposed to investment and longevity risks. Withdrawals, investment outcomes, costs and the length of retirement all affect sustainability. Trustee oversight does not remove those risks.
A guaranteed life annuity provides payments for life under its terms, but lifetime income is not necessarily lifetime purchasing power. Inflation protection and provision for a surviving partner remain important.
A CFP® professional can help members understand these trade-offs and assess suitable alternatives or combinations. Projections should inform decisions, not be presented as promises.
Trustees and CFP® professionals: Complementary responsibilities
For trustees, the practical implication is clear: work with CFP® professionals to make competent, affordable financial planning accessible before retirement and throughout the income drawing years. Advice should not become an afterthought once election forms have been completed.
For living annuities paid directly by the fund or through a fund owned policy, Regulation 39 requires funds to monitor income sustainability and alert members when drawdown rates are considered unsustainable. An adviser’s involvement does not replace that obligation.
But a warning letter should not be the end of the conversation. Members need help understanding what adjustments are realistic and what those changes mean for their households. CFP® professionals can turn that warning into a practical planning discussion.
Trustees should support clear pathways to advice, with transparent fees, managed conflicts and respect for members’ choice of professional. Access should not depend solely on the size of a retirement balance. Members should understand the scope and cost of any ongoing advice and when reviews will take place.
The message is simple: trustees must oversee the retirement arrangements and members need a plan for the lives those arrangements must support. Working with CFP® professionals connects the two. The goal is not merely to choose an annuity. It is to make informed decisions about an income that needs to last a lifetime.