Tips to ease the pressure of life on a fixed income in retirement
Tuesday, 7 July 2026
Martin Hawes is a financial writer and presenter, and has written 25 personal finance books. He writes a weekly column.
OPINION: Getting priced out of retirement, the headline said. That’s an interesting notion; normally if you are being priced out of something you try to find another supplier or perhaps dream up another occupation. Retirees are being priced out of retirement, but they do not have those same choices – being priced out of their way of living leaves few realistic options.
The headline came from the newsletter of Lifetime Retirement Income (I have a small shareholding in this company). It is a clever headline for what is a serious topic: retirees are finding the cost of living crisis hard and are scratching around for options to make ends meet. Unfortunately, few options abound.
Retirement is hard scrabble for most retirees. A study from the Retirement Commission in 2022 found that 40% of retirees live on NZ Super alone - about $647 per week for a single person and $492 each for a couple - both are before tax. Another 20% of respondents have up to $100 per week more, meaning that 60% of retirees live on NZ Super plus up to another $5000 per year. That’s hard.
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The Lifetime article came from a survey that they had done on 700 of their clients and newsletter readers. As such, this may not be a perfect sample representing average retirees, but I would have said that if anything the Lifetime clients would have higher than average incomes.
Regardless, the survey found that 77% of respondents had the cost of living as their dominant concern. Other concerns were also cost-related: rates, house insurance, petrol, heating and the adequacy of NZ Super (or, more accurately, its inadequacy).
This is life on a fixed income. Ever since I have been interested in finance, I have known that living on a fixed income is hard, especially in times of high inflation.
Of course, NZ Super is fixed. It changes once a year, but I suggest it would keep up with inflation better if it was reset twice a year.
Even those who have savings/investments and are drawing on them feel that those drawings are fixed – the fear that the money will run out before they do runs deep.
What can retirees do for a bit more income and spending power in these straightened times? Regrettably there is no silver bullet, nothing that most retirees have not already considered. However, here are a few suggestions:
Consider some work. That will be for risible for most, especially those who have been out of the work force for some years. However, there may be people who could do a few hours a week of something suitable.
Reconsider how much you are drawing from your savings/investments. Have a hard look at this to see if it is possible to increase the amount that you can draw. Investment returns have been good in recent years and maybe you are running ahead of what you had planned. Remember that the cash you need to spend is likely to fall as you become older and less active - most people spend more in the earlier years of retirement than they do later. Take some professional advice – perhaps you can draw more.
Are you making the most of your Gold Card? This will be no king hit but may give some good savings, especially in transport. Dust that card off and then have a look at what it can do for you.
Make sure that you are getting all your allowances – for example, the accommodation supplement.
Consider the house. Perhaps take in boarders, or somehow take some money from the large amount of capital tied up in the house. I am less keen in unlocking capital by downsizing and more keen on considering either a reverse mortgage or home reversion (selling a part of the house in return for an income). At the very least you might consider drawing more from your savings knowing that if you are in danger of running out of money there is the house that can be used as a back-up.
Have an honest, open discussion with your children. This is especially so if you are considering a reverse mortgage or home reversion, but even if you are not, the kids deserve to know if you are struggling. Of course, they may also be finding it difficult to pay the bills themselves, but even so, they could be able to help in some form.
New Zealand Super was designed to keep people out of poverty. I doubt it is doing that now - 60% of retirees who live on NZ Super with perhaps a little more will be doing it hard.
Martin Hawes is not a financial adviser, and the information and opinions here should not be taken as financial advice.