Research that lifts the lid on how retirees in Aotearoa New Zealand earn, spend and save has revealed that the bulk of older people fortunate enough to have assets are reluctant to crack open their nest egg.
Te Ara Ahunga Ora Retirement Commission conducted qualitative and quantitative research with more than 1,450 New Zealanders aged 65 and over. The second of two resulting reports, Older People’s Voices 2024 Part 2, explores income, decumulation behaviour and expenditure in older age.
The findings show that more than half of survey participants felt at least somewhat confident that they’ve saved enough money to live on comfortably throughout their retirement; however, one in five said they weren’t at all confident.
Of the participants who had financial assets such as KiwiSaver, investments, savings and/or shares in Māori land, only 71% reported withdrawing or receiving money from them.
Thirty-nine percent of those with assets said they had estimated how long their assets and investments might last in retirement. A further 10% of all participants said they would like to estimate it but didn’t know how to go about it.
When asked about specific drawdown behaviour, only 10% of participants with savings/investments (including KiwiSaver) said they earned a regular income from them. Four in 10 didn’t touch their funds unless there was an unexpected expense or emergency.
The Retirement Commission recently released a new retirement navigator tool on its Sorted website to help people work out their best strategy for how to turn a saved lump sum into a steady income.
The customisable tool is based on extensive modelling and drawdown ‘rules of thumb’ created by the Retirement Income Interest Group of the New Zealand Society of Actuaries. Taking into account people’s invested savings (for example, KiwiSaver), NZ Super and lifestyle preferences, it helps users determine the optimal income they can draw down over their retirement.
Retirement Commission Research Lead Dr Jo Gamble says this new tool helps address a common dilemma for many older New Zealanders: how not to spend too much and run out of money or spend too little and unnecessarily compromise quality of life.
“Throughout our working lives, we’re told how important it is to save for our future, and there’s plenty of information out there about how we might do that, but once we retire, there’s far less information about what we do with those savings.
“It’s clear from our latest research delving into decumulation behaviour that there’s a need for tools like Sorted’s retirement navigator and quality financial advice that assists older people to feel more comfortable moving from a ‘saving’ mindset pre-retirement to one of ‘spending’ in retirement.”
Other key insights
Confidence in having sufficient funds to last through retirement was comparatively lower for:
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People without any assets (86% felt ‘Not too confident’ or ‘Not at all confident’, compared to 40% of people who said they did have them)
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Mortgage-holders (79%) and renters (85%), compared to mortgage-free homeowners (36%)
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People who had experienced life shocks after 50 (66%, compared to 39% of people who hadn’t). Those who had experienced a life shock after 50 were more likely to say they intended to spend their KiwiSaver fund on living costs (40%) or unexpected expenses/emergencies (35%) than people who hadn’t experienced life shocks
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People who were completely reliant on NZ Super for their income (66%, compared to 27% of people for whom NZ super provided less than one-third of their income)
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Disabled people (61%, compared to 39% of non-disabled people)
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People who lived alone (58%, compared to 40% of people living with their spouse/partner)
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Women (51%, compared to 45% of men).
ENDS
NOTES TO EDITORS:
About the research
In March 2024, Te Ara Ahunga Ora Retirement Commission (the Retirement Commission) began work on an in-depth qualitative and quantitative analysis of the financial lives of people aged 65 or older. In-person and online focus groups and individual interviews were conducted with 36 over-65s throughout New Zealand. A national online survey was also completed by 1,420 people aged 65 or older.
The first report, Older People’s Voices 2024 Part 1: Financial sentiment, was released in December, building on Retirement Commission’s 2022 qualitative research project, which also examined the retirement experiences of those aged 65-plus.
This work supports the 2025 Review of Retirement Income Policies (RRIP), which the Retirement Commission undertakes every three years. The purpose of the review is to identify practical policies and interventions that could lead to better retirement outcomes for New Zealanders.
About Sorted and the retirement navigator
Driven by the Retirement Commission to improve New Zealanders’ financial wellbeing through accessible, actionable, relatable financial education, Sorted offers a range of free digital tools and calculators. You can click here to view them.
Click here for the media release about the one-of-a-kind retirement navigator tool and its companion guide.
For additional information or to arrange an interview, please contact:
Elizabeth O'Halloran, Communications Lead, Te Ara Ahunga Ora Retirement Commission
Email: elizabeth@retirement.govt.nz