Five things to do if you're retiring in 2026

Retirement is one of the biggest financial changes that many people go through in their lives.

If this is the year that you sign out of work for the last time, you might be wondering what you need to tidy up before you do.

Here are five questions to ask yourself.

When are you going to do it?

New Zealand does not have a set retirement age. You become eligible for the pension at 65, but you do not have to stop working at that point. You can claim NZ Super while you are working, and the only change that you are likely to notice is that you may no longer receive KiwiSaver contributions from your employer.

Liz Koh, founder of Enrich Retirement, said it could be hard to decide on the right time to retire.

"There is a balance to be had between retiring too early and retiring too late."

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She said the idea of retiring before 65 appealed to many people but would have consequences.

"Early retirement cuts short the time you have left to save for retirement and also lengthens your retirement, putting extra strain on your financial resources. The difference between retiring at 60 and retiring at 65 will add an extra few hundred thousand to the amount you need to retire.

"For example, you would need an extra $250,000 to provide an income of somewhere around $50,000 a year for five years, given that you would not be receiving NZ Superannuation for that period."

She said it could also be a tricky social adjustment.

"It's not easy to find yourself at age 60 amongst a cohort of people with an average age of 75 or more. There is a trend for people to retire later than 65, so finding other retirees of a similar age is challenging. Retiring early requires some forethought about how you want to spend your time and with whom, especially as many of your friends will still be working."

But more people are working past 65 and she said that could make sense, too.

"Many people find themselves with insufficient funds to retire at 65 while others want to continue leading an active life and are just not ready to slow down at 65. Longevity is increasing with the life expectancy rising to 90 or more for people who reach the age of 65 and some people feel that a retirement of 25 to 30 years is too long.

"Living longer means more money is required to fund retirement. However leaving it too long carries the risk that your ability to enjoy retirement might be curtailed by health problems or even premature death."

David Boyle, general manager of KiwiSaver at Fisher Funds, said many people chose to work at least part time until they were 70. "Many feel they need to but there are also a lot of other really good benefits for being in some level of work whether it's paid or not - connectivity with people, having purpose, all those good positive things."

Where will you live?

Koh said people should take stock of their financial lives and also consider where they would live.

Some retirees were "asset rich but cash poor", she said, because their money was all tied up in their homes. For some, downsizing or moving to a cheaper area could help.

People living in smaller centres could generally get by on less money than people in big cities, she said.

What will your lifestyle be like?

Koh said people should consider their health and how long they were likely to live, based on the experience of family members.

They could also think about how long they were likely to be in good health.

"If you are a couple, how much of a difference there is between you in terms of both lifespan and healthspan. If there are large differences, you may choose to base your retirement plans on the partner with the shortest lifespan or healthspan."

What will you do?

Koh said people should consider what goals they had for their retirement, and how they would spend their time.

Preparing plans that would allow them to keep in touch with other people would be important, she said.

"Social isolation is linked to depression, poor health and potentially a shortened life span. It can be a real problem for people whose social connections have been largely based around their work situation.

"Organisations such as MenzShed and Probus were set up to enable retirees to interact with like-minded people. Of course, there are many other options such as hobby and interest groups or volunteer organisations that provide opportunities to build friendships with others," she said.

"Joining such groups before reaching retirement helps to make the transition easier. You can always set up your own group - something as simple as a book club or neighhourhood watch group - if nothing is available in your area."

What do you need to do with your investments?

Boyle said people should not think of 65 as the finish line for their investing.

"It's not the finish line, it's the beginning of the fun line - this is where all your work and effort is going to be used for doing things that you've always wanted to do but never had the time to do it."

He said people would need to work out the best way to make their money last as long as they needed it to.

They might have some invested for the latter parts of their retirement, which could have more exposure to growth assets, and some that was in less volatile investments that could be used to fund the things they wanted to do in the first 10 years of retirement.

"Having a plan is incredibly important, and then understanding ... your longevity increases as well which means you need to make sure your money is working as hard as you were when you were working. Thinking about your allocation ... talk to your KiwiSaver adviser, your financial advisers who can give you a better picture.

"If you're in that lucky group that has a lot of money already you might be looking at how you can plan that at an intergenerational level. Having some good advice and planning around that is really important."

He said people should not be afraid to change their plans if their circumstances changed.

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