The Five Years Before You Retire: A New Zealand Checklist

You've been working for decades, and retirement is finally within sight. But here's what many New Zealanders discover at age 60: the last five years before you stop working are when retirement planning shifts from theoretical to intensely practical.

This isn't the time for dramatic portfolio changes or panicked catch-up contributions (though there's still time for smart adjustments). Instead, these final years are about verification, optimization, and putting the administrative pieces in place so your transition into retirement is smooth rather than stressful.

Think of it as pre-flight checks before a long journey. You've built the plane, now you're making sure everything works, you have the right documentation, and you know exactly where you're headed.

Five years out is your baseline year. Before you can plan the next steps, you need to know exactly where you stand.

Financial inventory: Gather every account statement, investment record, and asset valuation. This includes your KiwiSaver balance, any other retirement savings, investment properties, term deposits, shares, and business interests. Don't forget to estimate your home equity if you own property. Create a simple spreadsheet or use a retirement planning tool to see your total picture in one place.

According to Sorted.org.nz, many New Zealanders are surprised by the gap between their savings and what they'll actually need. Getting this reality check at 60 gives you options. At 64, your options narrow considerably.

Project your NZ Super: Visit the Work and Income website to understand what you'll receive. As of 2024, NZ Super for a couple living together is around $846 per week after tax, while singles receive more per person (approximately $551 for those living alone). These figures adjust annually, but understanding the baseline helps you see how much of your retirement income is already guaranteed.

Review your KiwiSaver fund: At 60, you still have time for growth investments to recover from market volatility, but the window is narrowing. Many investors begin considering whether their current fund type still aligns with their time horizon and comfort with risk. This is a conversation worth having with a licensed financial adviser rather than making reactive changes based on recent market performance.

Organize your paperwork: Create a retirement filing system, physical or digital. Include tax returns, investment statements, insurance policies, property documents, and any pension or annuity paperwork. Five years gives you time to chase down missing documents without stress.

Health insurance becomes both more important and more expensive as you age. Year four is when you need to think seriously about your coverage.

Employer health insurance: If you currently have health insurance through your employer, understand exactly what happens when you leave. Some policies allow you to continue at your own cost, others terminate. Get this in writing and factor the premium into your retirement budget if you plan to maintain coverage.

Individual health insurance: If you're considering purchasing individual health cover, doing it at 61 is significantly cheaper than waiting until 64. Premiums increase with age, and pre-existing conditions may become exclusions or result in declined coverage. Shop around, compare policies, and understand exactly what's covered. Remember that New Zealand has a public health system, so private insurance is supplementary, not essential, but it can mean faster access to specialists and elective procedures.

Life and income protection insurance: Review whether you still need life insurance or income protection. If your mortgage is nearly paid off and your children are financially independent, you may be able to reduce or cancel these policies and redirect the premiums to retirement savings. Conversely, if you still have dependents or debt, maintain appropriate coverage until you've addressed those obligations.

Review your health: Book a comprehensive health check with your GP. Identifying and addressing health issues while you're still working (and possibly have employer health benefits) is smarter than discovering them in early retirement. This is also the time to establish relationships with specialists if you have chronic conditions that will require ongoing management.

Three years out, it's time to move from rough estimates to realistic numbers. Your retirement budget will determine whether your savings are adequate.

Track your current spending: For at least three months (ideally six), track every dollar you spend. Don't rely on what you think you spend, use actual data. Bank statements, credit card bills, and cash withdrawals tell the real story. Many people discover they spend 20-30% more than they estimated.

Adjust for retirement realities: Some expenses disappear in retirement (commuting costs, work clothes, KiwiSaver contributions), while others increase (healthcare, travel, hobbies). A common rule of thumb suggests you'll need 70-80% of your pre-retirement income, but this varies enormously based on your lifestyle and whether you've paid off your mortgage.

Separate essential and discretionary spending: Divide your budget into non-negotiable expenses (rates, insurance, groceries, utilities) and everything else. This helps you understand your absolute minimum income requirement. Your essential spending should be covered by guaranteed income sources like NZ Super, while discretionary spending can come from KiwiSaver drawdowns or other investments.

Consider inflation: Prices won't freeze when you retire. Even modest inflation of 2-3% annually means your costs will increase significantly over a 25-30 year retirement. The Reserve Bank of New Zealand tracks inflation rates, and building in annual increases to your budget projections creates a more realistic picture.

If you're finding it challenging to estimate your retirement income needs, our guide on how to calculate your personal retirement number walks through the process in detail.

Housing is likely your largest asset and your biggest expense. Year two is when you need to make definitive decisions about where and how you'll live in retirement.

Mortgage status: If you're still carrying a mortgage, run the numbers on paying it off before you retire versus keeping it and managing payments from retirement income. The emotional appeal of being debt-free is strong, but the financial calculus isn't always straightforward. Factors include your interest rate, your mortgage balance relative to your liquid savings, and your tax situation. This is one area where advice from a financial adviser can be particularly valuable.

For a deeper exploration of this decision, see our article on mortgage payoff versus investing in the pre-retirement years.

Rightsizing: Is your current home the right size for retirement? Many New Zealanders live in family homes that are larger than they need once children have moved out. Downsizing can free up equity, reduce maintenance costs and rates, and provide a more manageable property. However, moving is expensive and emotionally taxing. If you're considering a move, doing it two years before retirement (while you still have work income for mortgage applications) is often easier than waiting until after you've stopped working.

Location considerations: Do you want to stay in your current area, move closer to family, or relocate to a more affordable region? Consider proximity to healthcare, public transport, and community. Some retirees discover that moving to a smaller town reduces costs but increases isolation. Visit potential locations, talk to locals, and consider renting before buying if you're thinking about a major relocation.

Renovations and maintenance: If you're staying in your current home, address major maintenance issues while you still have work income. A new roof, heat pump replacement, or earthquake strengthening is easier to finance when you're employed. Create a list of deferred maintenance and tackle the essentials.

You're in the home stretch. The final year is about dotting i's, crossing t's, and making sure your administrative house is in order.

Update your will: If you haven't reviewed your will in the last five years, do it now. Life changes, beneficiaries marry or divorce, executors move overseas or become unable to serve, and asset values shift dramatically. Your will should reflect your current wishes and current circumstances. If you don't have a will, creating one is non-negotiable. Dying intestate in New Zealand means the Administration Act 1969 determines who gets what, and it may not align with your wishes.

Enduring Power of Attorney: An Enduring Power of Attorney (EPA) lets you appoint someone to make decisions on your behalf if you become mentally incapable. You need two types: one for property (financial decisions) and one for personal care and welfare (medical and lifestyle decisions). These documents are crucial and often overlooked. While no one likes contemplating incapacity, having these in place protects you and your family from complicated and expensive court processes.

Beneficiary nominations: Review beneficiary nominations on your KiwiSaver account, life insurance policies, and any other investments that allow them. These nominations override your will, so if you listed an ex-partner 15 years ago and never updated it, that's who receives the money regardless of what your will says. Log into each account and verify the details are current.

Apply for NZ Super: You need to apply for NZ Super, it doesn't start automatically. You can apply up to 12 weeks before you want your payments to start. The application is through Work and Income and requires identity documents and bank account details. Don't leave this until the last minute.

Plan your KiwiSaver withdrawal: At 65, you can access your KiwiSaver funds. Decide whether you'll take a lump sum, set up regular withdrawals, or leave it invested and draw down as needed. Each approach has different tax, investment, and psychological implications. Many retirees benefit from a strategy that combines guaranteed income (NZ Super) with flexible drawdowns from savings. Our article on safe withdrawal rates for New Zealand retirees provides guidance on sustainable drawdown strategies.

Notify your employer: Give your employer adequate notice of your intended retirement date. Some workplaces require three to six months' notice, especially if you're in a senior or specialized role. Clarify what happens to unused annual leave, long service leave if applicable, and any retirement benefits your employer offers. Get everything in writing.

Consider phased retirement: Full-time work one day, full retirement the next can be jarring. Some employers offer phased retirement arrangements where you gradually reduce your hours over six to twelve months. This smooths the financial transition, maintains social connections, and helps you adjust to increased free time without shock. If this appeals to you, raise it early in your final year.

Retirement planning isn't purely financial. The psychological and social transitions are equally important and often underestimated.

Identity beyond work: If you've defined yourself by your career for 40 years, retirement can trigger an identity crisis. Start developing interests, hobbies, and community connections outside of work well before you retire. Volunteer roles, sports clubs, creative pursuits, or education courses give you structure and purpose that replace what work provided.

Relationship adjustments: If you're married or in a partnership, you'll suddenly be spending significantly more time together. Some couples thrive, others struggle. Talk openly about expectations, individual space, shared activities, and household responsibilities. Retirement can strain relationships if both parties aren't on the same page about what this new phase looks like.

Social connections: Work provides built-in social interaction. Without it, some retirees become isolated, especially if they were highly career-focused and didn't maintain friendships outside work. Actively cultivate and maintain friendships. Join groups, stay involved in your community, and prioritize social activities.

Mental and physical health: Retirement gives you time to prioritize your health in ways that full-time work often doesn't allow. Establish exercise routines, address sleep issues, manage stress, and engage in activities that keep your mind sharp. Research consistently shows that staying physically and mentally active in retirement is linked to better health outcomes and greater life satisfaction.

Knowing what to do is half the battle. Knowing what not to do is the other half.

Panic-driven investment changes: Market volatility in the years leading up to retirement can be unsettling, but reactive decisions often lock in losses and derail long-term plans. A coherent investment strategy accounts for volatility and doesn't require constant tinkering. If you're losing sleep over your portfolio, that's a sign to speak with an adviser about whether your risk level is appropriate, not to make dramatic changes without proper analysis.

Underestimating healthcare costs: New Zealanders often assume public healthcare will cover everything. While our public system is good, there are gaps, wait times can be long for non-urgent procedures, and some services aren't covered. Budget for private healthcare costs, dental work, hearing aids, and other expenses that increase with age.

Taking on new debt: The final five years before retirement is not the time to extend your mortgage, buy an investment property with borrowed money, or finance major purchases on credit. Your ability to service debt drops dramatically once you're on a fixed income.

Ignoring inflation in planning: Assuming your costs will remain static throughout retirement is unrealistic. Even modest inflation erodes purchasing power significantly over 20-30 years. Build inflation into your projections and ensure at least some of your investments have growth potential to offset rising costs.

Failing to communicate with family: Your adult children, siblings, and other family members may have expectations or assumptions about your retirement that don't align with your plans. Whether it's assumptions about inheritance, expectations that you'll provide free childcare, or beliefs about your financial situation, clear communication prevents misunderstandings and hurt feelings down the track.

The five years before retirement are your opportunity to ensure that everything you've worked toward actually delivers the retirement you want. It's a transition period, not a light switch.

Start with the financial foundations (knowing what you have, what you'll receive, and what you'll need), move through the practical considerations (health insurance, housing, estate planning), and finish with the administrative details (applications, beneficiary updates, employer notifications). Don't forget the non-financial elements, they're often what determine whether retirement feels like freedom or fumbling.

This checklist isn't exhaustive. Every person's situation is unique, and you may have specific considerations (caring for elderly parents, selling a business, managing a blended family situation) that require additional planning. The key is starting early enough that you have time to address issues rather than simply react to them.

Five years gives you options. One year gives you pressure. Use the time wisely.

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.