Retirement Planning for NZ Couples: A Complete Guide

Sarah and Mike had each been diligently saving for retirement in their separate KiwiSaver accounts for years. But when they sat down together to actually plan their retirement, they discovered something surprising: Mike's conservative fund was earning 3% while Sarah's growth fund had averaged 7% over the past decade. They'd never thought to compare notes.

This scenario plays out in households across New Zealand every day. Couples often treat retirement planning as two separate exercises, missing opportunities to coordinate strategies, share tax advantages, and align their timing. Yet the decisions you make together, from when to retire to how to draw down your savings, can significantly impact your combined financial security.

The good news? Planning as a couple gives you flexibility that single savers don't have. You can stagger retirement dates, balance risk across two portfolios, and optimize your combined NZ Super entitlement. Let's explore how to make the most of these advantages.

Here's something that surprises many couples: when you live together, you'll receive less combined NZ Super than if you lived separately. As of 2024, a couple sharing accommodation receives around $819.32 per week after tax (about $42,604 annually), while two single people living alone would each receive approximately $608.47 weekly (totaling about $63,280 annually for both).

Why the difference? The government recognizes that couples share living costs like housing, utilities, and groceries. While this makes logical sense, it's an important factor in your planning. Your combined household income from NZ Super will be roughly $1,640 less per month than two separate single rates.

Both of you will qualify for NZ Super at age 65, provided you meet the residency requirements: you must have lived in New Zealand for at least 10 years since age 20, with at least five of those years after age 50. The key considerations for couples include:

• Living arrangements matter: If one partner moves into a care facility while the other remains at home, you may each qualify for the single living alone rate
• Overseas pensions: If either of you receives a pension from another country, it may affect your NZ Super rate through direct deduction rules
• Working while receiving Super: There's no income test, so you can both work and still receive your full entitlement
• Timing flexibility: You can each apply at different times, though you cannot defer NZ Super to increase the amount later

Understanding these combined rates helps you calculate how much additional income you'll need from KiwiSaver, investments, or continued work to maintain your desired lifestyle.

Unlike NZ Super, your KiwiSaver accounts remain completely separate, even if you're married or in a civil union. This independence creates both opportunities and complexities for couples planning together.

Each partner's KiwiSaver balance is their own asset, built through individual contributions, employer matches, and government contributions. When you retire (typically at 65, or earlier if you qualify for early withdrawal), each of you can access your respective balances independently. This separation becomes particularly important in relationship property considerations.

The Portfolio Balance Approach

Rather than each choosing funds in isolation, some couples find value in thinking about their combined KiwiSaver portfolios as a household asset. This doesn't mean combining accounts (you can't), but rather coordinating your investment approaches.

Factors that may influence how you allocate across your two accounts include:

• Time horizons: If one partner plans to retire significantly earlier, that person's account might hold more conservative investments while the other maintains growth exposure
• Income stability: The partner with more secure employment might carry more investment risk, while the other provides stability
• Risk tolerance differences: One person comfortable with market volatility and another preferring stability can balance at the household level
• Account sizes: A smaller account in growth funds and a larger one in balanced funds might achieve your target overall allocation

Historical data shows that investment returns compound significantly over time. According to Sorted.org.nz, growth funds have historically returned around 7-8% annually over long periods, while conservative funds have returned 3-4%. These differences can result in substantially different balances at retirement.

Each employed partner contributes to their own KiwiSaver through payroll deductions, choosing from rates of 3%, 4%, 6%, 8%, or 10% of gross income. Your employer adds 3% on top of your contribution. Meanwhile, self-employed partners or those not working must make voluntary contributions to receive the annual government contribution.

For couples, contribution decisions often involve household budget trade-offs. Questions to discuss together include:

• Can you both afford to maximize the government contribution ($521.43 annually by contributing at least $1,042.86)?
• If only one partner is employed, how do you prioritize voluntary contributions to the non-working partner's account?
• Should the higher earner contribute more aggressively while the lower earner focuses on shorter-term savings?
• How do contribution increases affect your current lifestyle versus retirement security?

Some couples find it helpful to think about their combined contribution as a household percentage. For example, if one partner earns $80,000 and contributes 6% ($4,800) while the other earns $50,000 and contributes 4% ($2,000), your combined household contribution is $6,800 on $130,000 income, roughly 5.2% at the household level before employer contributions.

Remember, you can change your contribution rate anytime, so your strategy can evolve as your household circumstances change, whether that's a new baby, a promotion, or approaching retirement.

Who says you both need to retire on the same day? An increasing number of New Zealand couples are discovering the advantages of staggered retirement timing, where one partner retires while the other continues working for a period.

The benefits of this approach can include:

Income Continuity: Maintaining one salary while the other partner accesses KiwiSaver and NZ Super creates a transition period rather than a financial cliff. This can ease adjustment to a lower household income.

Social Connection: The working partner maintains workplace relationships and structure while the retired partner can explore new activities and connections, potentially making the eventual full-household retirement smoother.

Healthcare Flexibility: If the working partner has employer-provided health insurance, the couple maintains this coverage during the transition period. This can be valuable in the years before both partners are fully established in retirement routines.

Testing Retirement: The first partner to retire essentially pilots your retirement lifestyle. You'll discover which budgets were accurate, which activities you enjoy, and what adjustments you need before the second partner leaves work.

Reduced KiwiSaver Drawdown: Drawing from only one KiwiSaver account initially, while the other continues receiving contributions, can extend the life of your combined savings.

Of course, staggered retirement isn't right for everyone. Some couples prioritize spending time together immediately, traveling while both are healthy, or leaving demanding careers simultaneously. The key is discussing the options openly and understanding the trade-offs involved in your particular situation.

Money conversations can be uncomfortable, even for couples who've been together for decades. But retirement planning requires addressing some potentially sensitive topics head-on.

Unequal Account Balances

It's common for partners to have significantly different KiwiSaver balances due to career breaks (often for childcare), part-time work, later career starts, or time spent self-employed without making voluntary contributions. One partner might have $180,000 while the other has $45,000.

While KiwiSaver accounts cannot be legally combined or transferred between partners, many couples view these balances as shared household resources regardless of whose name they're in. Under the Property (Relationships) Act 1976, KiwiSaver funds accumulated during the relationship are generally considered relationship property if you separate.

The conversation worth having: Do you view your retirement savings as "yours and mine" or "ours"? How does this affect your drawdown strategy?

Different Risk Appetites

One partner might be comfortable with investment volatility while the other loses sleep over market downturns. These differences can create tension, especially when comparing account performance.

Rather than arguing about who's "right," focus on how your different approaches might complement each other at the household level. The growth-focused partner's account might provide higher long-term returns, while the conservative partner's account offers stability during market turbulence.

Retirement Age Disagreements

What happens when one partner dreams of retiring at 60 while the other wants to work until 67? This conversation touches on identity, purpose, finances, and lifestyle, all of which deserve thorough exploration.

Questions to work through together include: What does retirement mean to each of you? What would you do with your time? How would a staggered approach affect your relationship? What minimum income do you each need to feel secure? Can you financially support one partner retiring early?

Creating a realistic retirement budget as a couple means accounting for both shared expenses and individual needs. Start by categorizing your anticipated spending:

Essential Shared Expenses:

• Housing (mortgage/rent, rates, insurance, maintenance)
• Utilities (power, water, internet, phone)
• Groceries and household supplies
• Healthcare (insurance premiums, regular medications, GP visits)
• Transportation (vehicle costs, registration, insurance, fuel)

Discretionary Shared Expenses:

• Dining out and entertainment
• Travel and holidays
• Home improvements or upgrades
• Gifts for family and friends

Individual Expenses:

• Personal hobbies and interests
• Clothing and personal care
• Individual subscriptions or memberships
• Separate social activities

Research from Stats NZ shows that the average household expenditure varies significantly by age and region, but couples aged 65+ typically spend between $800-$1,200 weekly depending on location and lifestyle.

With combined NZ Super of around $819 weekly, many couples find they need additional income of $200-$600 per week (roughly $10,000-$30,000 annually) to maintain a comfortable lifestyle. This is where your KiwiSaver savings, other investments, and potentially part-time work come into play.

When building your budget, consider discussing:

• Do you want separate "personal spending" amounts that each partner controls?
• How much do you want allocated to travel or major discretionary goals?
• What's your emergency fund target for unexpected expenses?
• Are you planning to help adult children or grandchildren financially?

For more detailed guidance on creating sustainable withdrawal strategies from your retirement savings, our article on tax-efficient withdrawal strategies offers practical frameworks to consider.

While it's not the most cheerful topic, planning for what happens to your assets when one or both of you pass away is a crucial part of retirement planning. Your KiwiSaver funds and other assets need clear direction.

KiwiSaver and Death

When a KiwiSaver member dies, their balance is paid to their estate or nominated beneficiary. You can nominate one or more people to receive your KiwiSaver funds by contacting your provider. Without a nomination, your funds become part of your estate and are distributed according to your will (or intestacy laws if you don't have a will).

Many couples nominate each other as primary beneficiaries, with children or other family members as secondary beneficiaries. However, this requires active setup; it doesn't happen automatically just because you're married.

Wills and Relationship Property

Both partners should have current wills that reflect your wishes. Under New Zealand law, relationship property (which typically includes your family home and assets accumulated during the relationship) is usually split equally between partners if you separate. However, upon death, a will directs how your share of relationship property and separate property is distributed.

Key estate planning documents to have in place:

• Wills: Clearly stating who inherits your assets
• Enduring Power of Attorney (EPA): Authorizing someone to make decisions about your property and finances if you become unable to
• Advance Care Plan: Documenting your wishes for medical treatment
• KiwiSaver beneficiary nominations: Ensuring your retirement savings go where you intend

These documents work together to protect both partners and ensure your combined lifetime of saving and planning benefits the people you care about most.

Retirement planning isn't a one-time conversation. Your circumstances, goals, and the broader financial environment all change over time. Successful couples build regular check-ins into their routine.

Consider scheduling quarterly or semi-annual "financial dates" where you:

• Review your current KiwiSaver balances and fund performance
• Adjust contribution rates if your income or expenses have changed
• Revisit your target retirement dates and whether they still feel right
• Update your retirement budget based on current spending patterns
• Discuss any concerns or new goals that have emerged
• Celebrate progress toward your retirement milestones

Between these scheduled check-ins, major life events should trigger additional conversations: job changes, inheritances, health diagnoses, property decisions, or changes in family circumstances.

The goal isn't to spend hours every month poring over spreadsheets. Rather, it's to maintain alignment and catch small issues before they become large problems. Many couples find that 30-60 minutes every few months keeps them on track without becoming overwhelming.

If you're struggling to make progress on your own, working with a licensed Financial Advice Provider can provide structure, accountability, and personalized guidance for your specific situation. You can find registered advisers through the FMA's adviser directory.

If you're in your 50s or early 60s and feeling behind on retirement planning, you're far from alone. Life happens: raising children, supporting aging parents, divorcing and restarting, immigrating to New Zealand later in life, or dealing with health or career setbacks.

The advantage couples have when catching up is the ability to coordinate your efforts and make strategic trade-offs:

Maximize Both Government Contributions: Ensure you're both contributing enough to get the full $521.43 annual government contribution. For a couple, that's over $1,000 in free money each year.

Consider Increased Contribution Rates: If your budget allows, increasing from 3% to 6% or even 10% can significantly boost your balances in the remaining working years. The IRD's contribution calculator can show you the impact of different rates.

Build Retirement Savings Outside KiwiSaver: While KiwiSaver is locked until 65, you might also benefit from accessible savings you can use in the transition years. Our guide to building a diversified retirement portfolio explores additional savings vehicles to consider.

Reassess Your Timeline: Working even one or two extra years can make a substantial difference, both in accumulating more savings and reducing the number of years those savings need to last.

Explore Housing Equity: If you own your home, understanding how that equity factors into your retirement plan can provide reassurance. Some couples consider downsizing to release capital, though this decision involves many non-financial factors. For insights on this option, see our article on downsizing your home in retirement.

Remember, comparison is the thief of joy. Your retirement doesn't need to look like anyone else's. Focus on building the best plan you can with the resources and time you have available.

This article is general information only and does not constitute personalised financial advice. For advice tailored to your situation, speak with a licensed Financial Advice Provider. You can find a registered adviser at fma.govt.nz.