Mind the gap: What the latest retirement spending data shows
Each year, Massey University’s New Zealand Retirement Expenditure Guidelines give a snapshot of what retired households are actually spending, and how those figures compare with New Zealand Superannuation (NZ Super). The 2025 update, paints a clear picture: most retirees spend more than they receive from NZ Super alone, meaning additional income or savings remain essential for maintaining a comfortable lifestyle.
The spending picture
As at 30 June 2025, the report found:
- A two-person household on a “no frills” budget spends about $937 a week in metro areas, roughly $109 more than their NZ Super income.
- A two-person “choices” household, representing a more comfortable lifestyle, spends around $1,780 a week– $950 above NZ Super.
- Single-person households spend between $580 and $790 a week, depending on location and lifestyle type.
Even though inflation has eased within the Reserve Bank’s target range, everyday costs continue to bite. The biggest contributors to higher spending in 2025 were food, property rates, household energy, and recreation and culture – all of which rose faster than the overall Consumer Price Index (2.7 percent for the year to June 2025).
The housing factor
Housing remains a major financial variable in retirement. The report notes that today’s retirees mostly benefit from high home-ownership rates, but future generations are expected to face greater housing costs.
- For home owners, property rates have risen well above inflation in most regions, with the average annual rates bill now exceeding $3,500.
- For renters, weekly costs can easily reach $400–$500 for a one- or two-bedroom property, or around $250 each when sharing a multi-room home.
- Retirement-village living continues to grow in popularity, but the report cautions that while it can offer lifestyle benefits, it rarely results in significant cost savings once capital and weekly fees are considered.
Planning for the gap
Because most retirees spend more than NZ Super provides, the Guidelines estimate how much additional savings maybe needed. For a couple on a “choices” lifestyle, that shortfall equates to a lump sum of around $1 million, assuming no other income sources. Even couples pursuing a “no frills” lifestyle may need a savings pool of around $120,000 to $250,000,depending on location and personal circumstances.
While those numbers can seem daunting, the report reminds readers that there are ways to make the goal more achievable: contributing regularly to KiwiSaver, working a little longer, or supplementing retirement income with part-time work can all help reduce the required savings.
Why it matters
For anyone planning ahead, these findings are a timely reminder that retirement planning isn’t a one-off exercise. Life expectancy, inflation, and housing trends continue to shift, so reviewing plans regularly with a qualified adviser, can make a real difference.
As the report concludes, the Guidelines aren’t recommendations but a benchmark to help people understand what their preferred lifestyle might cost. Tools like the Sorted Retirement Planner can help you model your own figures, and a financial adviser can turn those numbers into a practical plan that fits your goals.
The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.