This article was originally published on Stuff on 7 October, 2026.
New Zealand has spent nearly two decades building a retirement savings system that’s good at getting money in. We’re not nearly as good at getting it out.
Growing your KiwiSaver balance is a familiar goal, and contribution rates still need to rise. But we also need to get better at turning those savings into an income that delivers what KiwiSaver is supposed to: confidence, choice and dignity in retirement.
Stuff’s Wealth of the Nation research gives an idea of the scale of the challenge: more than a quarter of KiwiSaver members aged 18–64 don’t know what they’ll do with their savings at 65. Another 28% expect to make regular withdrawals once they turn 65 – yet only 16% of those already 65 and over say they have done so.
These are different generations in different circumstances, but the figures raise the question of whether people are arriving at 65 with a plan for their savings, or simply the knowledge they can now access them.
Many don’t feel ready for it, either. The Financial Services Council’s June 2026 Financial Resilience Index found 48% of respondents felt either ‘not particularly prepared’ or ‘not prepared at all’ for retirement.
For most of a working life, the process is straightforward: money goes in regularly, stays invested and has time to grow. But then you hit 65 and you have to make what may be your biggest KiwiSaver decision of all: what comes next?
A large balance can feel reassuring on the day you retire, but it looks different when it has to help fund another 25 or 30 years. In retirement, the challenge shifts towards managing uncertainty. Will the money last as long as you do? What will markets do to it along the way? How might your expenses change over time?
Australia and the UK are further down this road with a range of products designed for the spending phase. Australia’s account-based pensions let retirees keep their super invested while drawing regular payments, subject to a minimum annual withdrawal that rises with age. The UK offers flexible drawdown alongside annuities that convert a lump sum into a guaranteed income for a fixed term or for life, and its Pension Wise service gives people free guidance on the choices in front of them.
Those products involve trade-offs between flexibility, investment risk and certainty. New Zealand doesn’t need to copy any particular product, but we do need to make the shift from saving to spending easier to understand, and countries like these can show us where the difficulties lie.
Australia also shows that building the products is not the same as solving the problem. In August this year, its prudential regulator was still urging super funds to do more for members moving into retirement, several years after a government review in 2020 found more than half of retirees over 65 were only drawing down at the mandated minimum rate.
That review identified a reluctance to actually use retirement savings, driven partly by uncertainty about how long the money needed to last. Some were preserving money at the expense of the retirement it could have funded for them.
New Zealand should take note: the spending decision can go wrong in both directions. Running out early is an obvious risk. Living too frugally is the one people talk about less.
Some retirees behave as though they need permission to spend the money they spent a working life saving. They don’t.
This is a conversation I’ve had with my own parents. Even when the numbers suggest they can afford to live more comfortably, a lifetime of careful spending habits is not easily undone.
It’s not irresponsible to spend more in the early ‘go-go’ years of retirement. That is often when people are most able to travel, take up interests or spend time with family overseas. Those years do not come back.
Retirement is not one uniform phase, and spending changes as it progresses. The New Zealand Society of Actuaries’ analysis of Stats NZ data found a decline in median spending across older age groups equivalent to around 2% a year for couples between their early seventies and early eighties.
A retirement income plan needs room for both the early years people want to enjoy and the later costs they may need to meet, from travel and home maintenance through to increasing health and care needs.
Investment conditions matter too. When markets fall, withdrawing the same dollar amount uses up a larger share of your savings, leaving less invested to benefit from a recovery. Poor returns early in retirement can therefore have lasting consequences. This is called sequencing risk, and it’s one of the clearest reasons retirement planning needs to continue past 65 rather than stopping there.
How much you spend and how you invest need to be considered together. It’s more complex than simply dividing a balance by the number of years you expect it to last.
People approaching retirement need three things.
The first is clear information, well before they turn 65: what their savings might support alongside NZ Super, how that could change through different stages of retirement, and how long it might last under different spending patterns.
The second is accessible advice. Choices can get harder and good advice should be easy to reach when it’s needed.
The third is practical retirement income solutions: options that turn a balance into a dependable income, with the trade-offs between flexibility and certainty made clear.
None of that should stop at 65. Needs change through retirement and the support should change with them. We cannot spend decades encouraging people to trust us with their retirement savings, then regard the job as finished when those savings become available.
We’re not starting from zero. Plenty of New Zealanders already get good, ongoing advice and enjoy the retirement they saved for. Just not enough.
Strengthening contributions remains essential for our ageing population. But KiwiSaver should be judged by what those savings actually do for the people who built them.
The first 20 years were largely about helping New Zealanders save. The next 20 have to be about helping them live on what they’ve saved.
Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as financial advice. You should not rely on any information in this communication in making financial decisions. Before making financial decisions you may wish to seek financial advice. Milford Funds Limited is the Issuer of the Milford KiwiSaver Plan and the Milford Investment Funds. Please read the KiwiSaver Plan Product Disclosure Statement and the Investment Funds Product Disclosure Statement.
