Can you afford to retire?

Retirement is a life-changing event. Your priorities will change from building your savings to carefully spending your hard-earned dollars. Finding a way to replace your salary with cash from other sources will be your biggest focus.

While there’s no one-size solution, there are ways to stretch your retirement income and things you can do to make your money last as long as possible. The earlier you start preparing, the more options you’ll have.

Work out how much money you have now, how much you might have in the future and where it’s coming from.

  • Think about your assets (property, savings, investments) and how much they’re worth.
  • If you have a retirement savings scheme (KiwiSaver or workplace plan) look at how much you have and when you can access it.
  • Find out if you’re eligible for NZ Super.

Once you’ve done this, look at how your needs might change over time and how you can use your different income sources to finance the different stages of your life.

Income options

As a guide, it’s safe to assume you’ll need two thirds of your income before you retire if you want to maintain the same standard of living. This can come from several sources and layering those options will give you the best chance of maintaining regular income.

NZ Super

NZ Super is a pension paid by the government. To be eligible you must:

  • be aged 65 or over and a legal resident of New Zealand
  • have lived in New Zealand for at least 10 years since the age of 20, and
  • spent at least five of your required 10 years in New Zealand from the age of 50.


Recent estimates show 40% of us rely on NZ Super alone when reaching retirement age. But it’s often not enough. Covering the gap with a long term savings plan like KiwiSaver is a sensible way of ensuring you can afford the type of lifestyle you want in retirement.


Investing some of your money in assets that grow over time, like shares and property will ensure your capital grows in value to keep pace with your income needs.

Get rid of outstanding debts

Clear your credit card, car or personal loans as quickly as possible. This kind of high interest debt is a burden you can afford to live without in retirement.

Pay off your mortgage

As part of your overall plan try to pay off your mortgage before retirement. While it shouldn’t come at the expense of regular saving and investment in other income sources, it can go a long way in reducing your expenses.


One of the easiest ways to make your money last longer is to watch your spending. Plan a realistic budget to help you save for special occasions and keep your expenses in check.

Your entitlements

Check your eligibility for benefits such as travel concessions, cheaper medicines and reduced council and water rates.

Keep working

New Zealand doesn’t have an official ‘retirement age’. NZ Super is payable from age 65 but you don’t have to stop working to get it. By continuing to work, even if it’s part time, you can leave your savings untouched for longer.

Above all plan for the long term, not just the next five years. Seek financial advice, manage your spending, take advantage of your entitlements and diversify your investments for a happy, healthy retirement.