For generations of New Zealanders, a lifetime of work has come with the promise of a secure and happy retirement.
Today, however, that notion of golden years spent in relative comfort is slipping out of reach for a growing number of struggling retirees. Without a serious policy rethink, younger New Zealanders may face an even tougher reality when their time to leave the workforce comes.
Despite these challenges, policies tabled this election year amount to little more than tinkering around the edges.
National has proposed making it compulsory for all workers to contribute to KiwiSaver from mid-2028, while increasing default contribution rates and automatically enrolling newborns. It has also signalled it will campaign on raising the age of eligibility for New Zealand Superannuation (NZ Super).
Labour, meanwhile, has ruled out raising the superannuation age or means-testing NZ Super, arguing KiwiSaver should remain a supplement rather than a replacement to the scheme.
Other parties have similarly focused on individual elements of retirement, rather than recognising it as a complex system of interconnected parts - where changes to one inevitably affect the others.
A bridge beginning to buckle
Imagine New Zealand's retirement system as a suspension bridge. The three cables stabilising it are NZ Super; private savings and KiwiSaver; and a person's housing situation.
Each cable provides a counterbalance to the others. If retirees have less housing wealth, they need more income. If NZ Super becomes less generous, they need more KiwiSaver. If KiwiSaver balances are inadequate, pressure falls back onto NZ Super.
Already, pressure is building on each part of this structure.
Today, nearly 40% of retirees are completely dependent on superannuation, which remains a universal entitlement for most people aged 65 and older. The income they receive, paid for by current taxpayers, is set at around two-thirds of the average wage . This means that as wages grow, so too does retirement income.
Unfortunately, just like an increasing number of working families, retirees are being hit by the rising cost of living. In 2024, the Retirement Commission reported that more than 37% of retirees said they were worse off than two years earlier.
Massey University's recent New Zealand Retirement Expenditure Guidelines report also shows that NZ Super is insufficient to support even a "no frills" retirement.
Treasury has also raised serious questions about the long-term sustainability of NZ Super without significant changes, such as raising the eligibility age, reducing payments, increasing taxes or cutting other government spending.
To put this in context, NZ Super already costs about 18% of tax revenue - and that share is expected to only grow.
Housing pressures hit home
The NZ Super Fund was established to help pay for future superannuation costs.
However, National has announced it would begin drawing down from the fund in 2028, five years earlier than originally planned. Drawing down early will reduce future investment income and place greater pressure on future taxpayers to cover the cost of NZ Super.
The unspoken assumption behind NZ Super is that people will retire with a mortgage-free home . Around NZ$538 a week for a single person, or NZ$828 for a couple, leaves little room to pay rent in today's housing market.
At the same time, home ownership rates are falling, while both the proportion of retirees with mortgages and the average size of those mortgages are increasing.
Looking ahead, this trend is likely to worsen as high house prices and the rising age of first-home ownership continue. By 2048, fewer than half of New Zealanders are expected to own their own home.
All of this means KiwiSaver may no longer be a supplement that simply makes retirement more comfortable, but one that is essential to future financial security.
The Retirement Commission has consistently shown that KiwiSaver balances mirror income and job security. Those earning more and avoiding career disruptions save more.
For a low-income worker, however, even a 12% contribution rate may not be enough to build an adequate nest egg. As contribution rates rise, more people may be forced to choose between paying today's bills and saving for a retirement that still seems decades away.
Thinking past election cycles
New Zealand's retirement system is only as strong as those three supporting cables keeping it aloft. Yet politicians too often debate each one as if it exists independently of the others.
Making NZ Super more affordable is likely to place greater pressure on KiwiSaver, which raises questions about how to ensure it works for as many New Zealanders as possible. Any changes to one cable should be considered alongside their impact on the others.
Unfortunately, too many policy proposals ignore these knock-on effects and fail to consider the overall goal: giving people the best possible chance of financial security in retirement.
New Zealand's retirement system was not built overnight and it will not be repaired overnight either.
But, if Kiwis are to be expected to save and plan over 40 years, then politicians and policymakers should at least start thinking beyond the next three.
Aaron Gilbert does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
