Retirement Planning Tips To Save You From Working Past 65

Retirement Planning Tips To Save You From Working Past 65

by | General, Property Investment Education

Gone are the days where owning your own home was enough for a stress-free retirement. With living costs rapidly rising, the age-old dream of retiring at 65 years old is becoming exactly that – a dream. With life expectancy now creeping into the 90s, Kiwisaver and NZ Super pension funds are being stretched much farther than what most have prepared for. Retirement planning is more important now than ever before!

The truth is, if you’re planning to rely on your Kiwisaver and pension payment alone then you’ll only be able to afford to live a basic lifestyle. The current NZ Super rates after tax are $437 a week ($22,721 a year) if you’re single and living alone, or $672 ($34,955 a year) for qualifying couples. However, a recent study done by Massey University has found that most Kiwi’s spend much more than that in retirement especially if they live in a big city.

According to the study, a basic “no frills” lifestyle for a single person in Auckland, Wellington or Christchurch was $602 a week, or $574 if they lived in the provinces. A more comfortable lifestyle, with some luxuries and treats, cost $1,190 in a main centre or $831 in the provinces.

For couples, a “no frills” lifestyle was $899 in the main centres or $640 in the provinces. For a more comfortable lifestyle, couples were spending $1,436 in the main centres or $1,136 in the provinces.

Because of this widening gap between living expenses and what the NZ Super can provide, more and more Kiwis are working past the age of 65 in order to financially stay afloat.

Assuming you want more than to just scrape by after all those hard years of work, then these retirement planning tips will help you to spend more time living and less time working during those valuable golden years.


Now that you know the income required for different retirement lifestyles, you need to determine if you’re happy settling for a “no frills” lifestyle with few, if any luxuries, or if you are aiming for the “choices” lifestyle that offers some luxuries or treats. Most people have big ambitions when it comes to retirement and it is fair to say that both of the budgets mentioned are fairly conservative. If you’re dreaming of a luxe retirement where you can travel and get to enjoy some of the finer things in life, then you’re going to need to start planning.

The first thing you need to work out is, how much money do you need to die? It is a critical question that many never even give a second thought. It is well acknowledged that planning for retirement from an early age will give you the best chance of having enough money to retire stress free.

However, retirement is still one of those things that seem distant and unimportant while young. And then, by the time you get older and start to worry, it’s often too late.


There are a few key components to a successful retirement plan:

  • What you anticipate your retirement lifestyle to be
  • How much income you anticipate bringing in while retired (including savings, pension, Kiwisaver and any other income)
  • How you will handle long-term care expenses, such as a stay in assisted living or a nursing home as well as potential medical bills
  • Your risk tolerance as an investor if you choose to incorporate investing in your retirement goals
  • Fees required by a financial advisor if you choose to use one in planning your retirement

Why should you set retirement goals?

  • Peace of mind: Planning for your retirement brings peace of mind because it helps reduce the stress leading up to and during retirement. Without goals, many retirees feel uncertain about how they will manage their future.
  • Better decision making: When you have a solid plan in place it makes financial and career decisions easier because you have clarity on what you are working towards.
  • Cost efficiency: If you start planning while you’re young then you may have access to more cost-efficient options such as insurance.
  • Reduced tax burden: Understanding the tax bracket you’ll be in when you retire will be critical to properly planning for the taxes you’ll have to pay.

How to set retirement goals

The following are steps to take when establishing retirement goals and a retirement plan:

  • Determine your current financial situation: First you need to understand your current incomings and outgoings. An easy way to do this is to track your spending for a month. This will help you identify areas in which you can save extra cash.
  • Start simple: Keeping it simple to begin with will help you avoid overwhelm and give up. By starting small you will slowly build satisfaction and therefore confidence to continue building wealth. For example, you could start by investing 3% into Kiwisaver and then once you’re comfortable you could increase your contribution and start looking at other wealth creation avenues, such as investing.
  • Understand how much time you have to save: How long you have until retirement is an important component of retirement planning. If you’re young, you have more time and therefore the opportunity to make riskier investments that could potentially bring in larger returns in the long-run. If you start planning at a later age, you may want to consider more stable investments to ensure you don’t end up losing money.
  • Get clear on your spending needs: It is important to be brutally honest with yourself about your anticipated post-retirement spending habits. The last thing you want to do is trick yourself into believing you can live a frugal lifestyle and then end up absolutely miserable in retirement.
  • Know when to adjust your strategy: As mentioned, the time you have until retirement will determine your approach towards investing. If you start investing young, then it’s important that you adjust your strategy as you get closer to retirement.



If you don’t at least own your home by the time you retire then you are going to need a lot more savings to get by. The main risk to retirees who rent is that they will be exposed to rental inflation and this is not a great position to be in for someone who is on a low income from NZ Super and their Kiwisaver.

Whilst owning your house will cover you for future house price and rental increases, it will not provide you with an additional income. One way to bring in extra money is to downsize to a cheaper home, move to a less expensive suburb or into a retirement village.

However, downsizing generally only releases a small amount, $20,000-$30,000 and most feel this is not worth leaving their friends and family for. Moving to provincial towns to save money is also becoming less of a strategy with houses in the regions heating up. Whilst a retirement village will allow you to capitalise on your house, it is usually at the cost of your freedom. In a retirement village you do not own your property and they also have rules that you might not like.

So, what is the answer? Property investing. If you want a retirement investment strategy that’s safe, steady and guaranteed to look after you in the future, then you need to consider real estate as an option.


To succeed as a property investor, there is one fundamental component you need – a plan. If you don’t plan, you plan to fail, this rings true for both property investment and retirement planning. A good real estate plan will guide you on what to buy, where and for how much.

You’ve already come up with a goal of how much money you’ll need to retire, so now all you need to do is create a step-by-step plan to achieve it.

First let’s look at the types of properties you might invest in. Typically, a first-time investor will look at a mix of houses, apartments, and townhouses.


  • Pro: Houses offer better opportunities for capital gains as land tends to appreciate in value. Strategic improvements can also be made to accelerate these gains, such as renovations or subdivision. You’ll also be able to take advantage of depreciation to offset your tax bill.
  • Cons: Requires higher maintenance costs and generates lower yields.

Houses are a great investment for those in the earlier to middle stages of their lives, this is because for a house investment to be worth it you want to capture as many growth cycles as possible.


  • Pro: A more affordable option, and has the potential for high rental yields. It is also easier to manage an apartment as the strata manager is responsible for maintenance and upkeep.
  • Cons: Less capital growth due to lack of land value, limited in renovations and you have to pay a strata fee.

An apartment is a stable option for those nearing retirement as it could be a good source of income.


  • Pro: Townhouses have lower entry and maintenance costs and if in the right location, they can deliver good capital growth and high yields. Also potential to renovate depending on by-laws.
  • Con: Strata restrictions for renovations and you will often face more competition from similar properties.

Townhouses are suitable for most property portfolios and offer beginner investors a foot on the ladder with a lower price point than houses.

Next you need to understand what factors influence the real estate market so you can get a better understanding on where you might like to purchase.

There are six market drivers that grow real estate value:

  • Infrastructure – spending on infrastructure points to a growing economic base
  • Yield variation – signals growth
  • Supply and demand – indicates need in the marketplace
  • Population – fuels growth in an area
  • Economics – reveals clues to an area’s capacity for growth
  • Demographics – influences growth – as incomes grow, so do property values

For example, knowing that investment in infrastructure generally leads to population growth will help you identify areas that are attracting people. This will give you more security that you will be able to find a suitable tenant for your property.


Acquiring knowledge is one thing but if you can’t implement it, it becomes almost useless. Any successful investor will tell you that they didn’t ride their journey alone, they got help, and lots of it!

Now that you know the retirement planning tips that will save you from working past 65, your next step is to enlist a team of experts that will help you strategize. That’s where Positive Real Estate New Zealand comes in. Our team has been dominating the property investing industry for over 20 years.

If you’re ready to get started in your real estate journey, then sign up for our next free property investing masterclass. These high value events are packed full of information about where the markets sit right now, how to invest both wisely and smartly, and it’ll connect you with the industry professionals you need to know to get ahead and ensure you retire on your terms.

Register now for the free property investor webinar.

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