How to build a retirement budget in NZ

A good retirement budget starts from what you spend now, not from a rule of thumb. Take out the costs that stop when work stops, add the ones retirement brings, then plan for two things most budgets miss: spending that changes with age, and one-off costs such as cars, roofs and big trips. In our worked example, a couple's spending of $1,060.65 a week, falling to 90% after 75 and 80% after 85, lasts to 95 in every one of 1,000 simulated markets; keep it flat and it lasts in 87%. Rules checked 12 November 2026.

Step 1: start from what you spend now

Pull 12 months of bank and credit card statements. Twelve months matters, because insurance, rates, car registration and power bills are uneven through the year. Group the spending into a handful of headings:

• Housing: rates, insurance, maintenance, body corporate, and rent or mortgage if you have them;
• Household energy: power, gas, firewood;
• Food: groceries and eating out;
• Transport: fuel, servicing, registration, warrant, insurance, public transport;
• Health: GP, dentist, glasses, hearing, prescriptions, health insurance;
• Communication: phone and internet;
• Recreation: hobbies, subscriptions, travel, gifts, family.

Divide the yearly total by 52 for a weekly figure. That is your honest starting point.

Step 2: adjust for retirement

Some costs stop or shrink when you stop work:

• commuting, parking and work clothes;
• KiwiSaver contributions and other saving out of pay;
• the mortgage, if it will be cleared by then (see retiring with a mortgage);
• costs of children who have left home.

Others grow:

• power and heating, because you are home in the day;
• travel and hobbies, especially in the first decade;
• health costs, steadily, as you age;
• home maintenance you once did yourself.

Then compare your result with the Massey University guidelines, which show what retired households actually spend. A mortgage-free couple outside the main cities spends $1,060.65 a week on Massey's No Frills measure; a single person in a city, $705.34. If your figure is far above or below, check why. Our Massey guidelines guide has all eight figures.

Step 3: the income side

Against that spending, list the income you can count on. For most people the base is NZ Super:

The gap between spending and that income is what your savings must fund. Each $100 a week of gap from 65 to 95 needs about $190,000 at 65 to hold in 9 of 10 markets, on our assumptions of a 2.5% return after 65 and 2% inflation. Our how much do I need calculator works it out exactly.

Budgeting on your own

A single person's budget is not half a couple's. Rates, insurance, power and the car cost much the same for one person as for two, which is why NZ Super for a single person living alone ($555.15 a week) is set at 65% of a couple's combined rate, not 50%.

Massey's figures show the same pattern: a single person on a No Frills metro budget spends $705.34 a week, three quarters of the $937.38 a couple spends. If you live with someone else, such as a flatmate or an adult child, your NZ Super drops to the sharing rate of $512.45 a week, but you share the fixed costs too. Build your budget around the household you will actually have.

For couples, it is worth running a second budget for the survivor. When one partner dies, NZ Super for the survivor falls from $854.08 to $555.15 a week if they live alone, while many costs stay put. Our couples calculator assumes the survivor spends 70% of the couple's budget, which you can change. See when a partner dies.

Step 4: plan for spending that changes with age

Retirement spending is rarely flat. Many people spend more in the active early years, then less as travel and activity slow down, with health and care costs rising later. Our calculators model this with three phases, which you can change:

These shares are our own assumption, not an official figure. They are in today's dollars, so the amounts still rise with prices; they just rise a little less.

The difference is large. Our example couple are both 55, earn $80,000 and $60,000, have $150,000 and $100,000 in KiwiSaver and $50,000 of other savings, and retire at 65. Their retirement pay, the steady amount that holds in 9 of 10 markets, is about $1,052 a week.

• With phased spending starting at $1,060.65, their savings last to 95 in every one of 1,000 simulated markets.
• With flat spending of $1,060.65 to 95, they last in 87% of markets, and in the poorest 1 in 10 markets the money runs out at about 93 and a half.

If you expect your spending to stay flat, or to rise because of care costs, set the phases to 100% in the retirement calculator.

Step 5: budget for one-off costs

A weekly budget hides the big, irregular costs that knock retirement plans off course. List the ones you can see coming:

• replacing the car, perhaps twice;
• a roof, repaint, new hot water cylinder or heat pump;
• a big overseas trip or a family wedding;
• helping children or grandchildren;
• dental work, hearing aids or a hip replacement while waiting for public treatment;
• moving house, which brings agent, legal and moving costs.

Here is what one-off costs did to our example couple's retirement pay:

As a rough guide, each extra $10,000 available at 65 is worth about $6 a week of pay for life to this couple, and each $10,000 of one-off cost takes away a similar amount. Budgeting for these costs up front is far easier than finding the money when the roof leaks. The retirement calculator lets you enter two one-off costs and a lump sum in, such as an inheritance (see lump sums and inheritance).

Step 6: keep the budget alive

1. Review it each April, when NZ Super changes. If prices rose 3% and your spending rose 6%, find out why.
2. Keep a buffer of a few months' spending in an easy-access account, so a bad market does not force you to sell investments at a low point. See sequence of returns risk.
3. Have a plan B. Know which spending you would cut first if markets were poor for several years. Flexible spending rules such as guardrails build this in.
4. Allow for inflation. Our figures are in today's dollars. Your actual bills will rise; see inflation in retirement.

Sorted, run by the Retirement Commission, also has free budgeting tools. This is general information, not financial advice.

Questions

How much does a retired couple spend in NZ?

Massey's 2025 guidelines put it at $937.38 to $1,780.32 a week depending on lifestyle and location, for households that own their home. A No Frills couple outside the main cities spends $1,060.65.

Does spending really fall in retirement?

For many people, yes, especially after their mid 70s. Our calculators assume 90% of starting spending from 75 and 80% from 85, which you can change. Health and care costs can push the other way.

How do I budget for a new car in retirement?

Treat it as a one-off cost rather than a weekly amount. For our example couple a $30,000 car at 75 lowered their weekly pay for life by about $19.

Should my retirement budget include the Winter Energy Payment?

You can count it: $31.82 a week for a couple and $20.46 for a single person from 1 May to 1 October. It is about $13 and $9 a week averaged over a year.

What one-off costs should I plan for in retirement?

The common ones are replacing the car, roof and house maintenance, appliances, big trips, helping family, and health costs such as dental work and hearing aids. List them with a rough age and amount.