Mind the (Retirement Income) Gap
We all know that NZ Superannuation (NZ Super) isn’t enough to live on. But just how much do you spend over and above your pension to cover your day-to-day expenses in retirement? This is called the “retirement income gap” and it occurs when the money you receive from your pension (NZ Super) isn't enough to cover all your living expenses once you've stopped working.
New Zealand Retirement Expenditure Guidelines (2025)
What are the Retirement Expenditure Guidelines?
Every year, Massey University’s Financial Education Centre updates their New Zealand Retirement Expenditure Guidelines (REGs), showing the typical expenditure for retirees and the income required to cover those expenses.
The REGs are based on data collected by Statistics New Zealand as part of its Household Expenditure Survey (HES). The 2025 Guidelines are derived from the 2022/23 HES, which captures expenditure patterns of retired households in New Zealand, with adjustments for inflation to reflect costs as of June 2025.
You can read the full report here.
The report considers single-person and two-person households separately, as well as two geographical areas: Metro, which includes our main cities of Auckland, Wellington and Christchurch, and Provincial, which covers the rest of New Zealand. It also distinguishes between a ‘No Frills’ lifestyle which reflects a basic standard of living and a more comfortable retirement with ‘Choices’, which includes some luxuries or treats, such as meals out and a larger budget for food like fresh fruit and meat.
What did the 2025 Update find?
- Most retirees spend more than their NZ Super, necessitating additional income planning.
- The income gap was $42 a week for a one-person provincial household on a no-frills budget and $950 a week for a two-person household living with choices in a main city.
- Key expenditure increases for the 2025 Update include food (4.2%), property rates (11.9%), and household energy (9.2%).
- Accommodation costs vary significantly based on ownership type, with future retirees likely to rent more often.
- Estimated lump sums required to cover expenditure differences range from $46,000 to $1,033,000 depending on household type (based on life expectancy of 90 years).
Curious about the income gap you might face based on your circumstances? Check out the table below for insights.
The Difference Between Total Expenditure and NZ Super
Two-person household's weekly expenditure
| Choices Lifestyle | Metro Area | Provincial Area |
| Household Expenses | $1,780.32 | $1,243.41 |
| NZ Super Payment | $828.34 | $828.34 |
| Income Gap | $951.98 | $415.07 |
| No-frills Lifestyle | Metro Area | Provincial Area |
| Household Expenses | $937.38 | $1,060.65 |
| NZ Super Payment | $828.34 | $828.34 |
| Income Gap | $109.04 | $232.31 |
One-person household's weekly expenditure
| Choices Lifestyle | Metro Area | Provincial Area |
| Household Expenses | $790.62 | $771.89 |
| NZ Super Payment | $538.42 | $538.42 |
| Income Gap | $252.20 | $233.47 |
| No-frills Lifestyle | Metro Area | Provincial Area |
| Household Expenses | $705.34 | $580.75 |
| NZ Super Payment | $538.42 | $538.42 |
| Income Gap | $166.92 | $42.33 |
Managing the Retirement Income Gap
A pressing concern for retirees
As retirement approaches, many New Zealanders find themselves confronted with a pressing concern: Will their pension be enough to sustain their desired lifestyle?
As outlined in the table above, it's common for New Zealanders to discover that their NZ Super is not enough to cover all their expenses in retirement. To address this, some may choose to work longer to save more before they retire, or adjust their plans to ensure that their savings can support their expenses in retirement.
If you're thinking about continuing to work past retirement age, take a look at our article, What are your rights from 65?, Click to Read . It provides detailed information about your rights to work after turning 65.
Options to bridge the Retirement Income Gap
Most people will bridge the gap with retirement savings that they’ve accumulated during their working lives. However, if this isn’t enough to support your ideal retirement, there are other options.
If you don’t believe you have enough put aside for retirement, you could consider:
- Working for longer. Increasing numbers of Kiwis aged 65 and over continue to work either full time or part time. Working not only allows you to add to your savings, it also means you’ll be retired for a shorter period, so you’ll need a lower lump sum when you do stop working.
- Scaling back your retirement. You can take a scalpel to your budget and opt for a “no-frills” lifestyle.
- Downsizing. You can move either to a less expensive house in the same area, or to a cheaper region where weekly costs are lower (from a city to a province, for instance) – or both. This should free up money from your house, which you can add to your retirement nest egg.
- Home equity release. If you’d prefer to stay put, you could look into home equity release solutions, like a reverse mortgage or Lifetime Home, our debt-free alternative. These allow you to access some of the wealth tied up in your home without having to leave it.
If you’d like to find out more about how Lifetime Home could help you bridge your retirement income gap, simply request an information pack: Click to Request
Bridging the income gap with Lifetime Retirement Income
Lifetime Retirement Income is dedicated to empowering Kiwis to achieve the retirement income they desire for the fulfilling retirement they’ve earned. Whether you’ve built up retirement savings or own a mortgage-free home, Lifetime is here to help you establish a steady, reliable income stream. This ensures you can embrace the lifestyle you’ve always dreamed of.
- Lifetime Income: Our flagship drawdown solution, the Lifetime Retirement Income Fund, provides a reliable, tax-paid, retirement income designed to last your lifetime. View More
- Lifetime Home: Our debt-free home equity release model provides a reliable and steady income stream for those aged 70 plus, ensuring you can enjoy a comfortable retirement. View More
- Retirement Income Calculator: Looking to supplement your NZ Superannuation for a more comfortable retirement? One of our retirement income solutions may be right for you. Estimate your retirement income today.
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