Retiring retirement

Sir Dick Seddon, then PM, proposed a compulsory retirement age of 65 years in 1898 when the average life expectancy for a New Zealander was 54 (Schlaadt, 2009). Ouch: most of us wouldn't see 'retirement' before we sloped off to join everyone else in the dead centre of town (yep, bad Dad joke). We had a baby pension which "was rigorously means-tested [...] for those no longer able to work" which was only 4% of our then population (Schlaadt, 2009, p. 6).

By 1930 our average life expectancy was 65; by 1952 it was 70 (Global Stats, 2021), and at last 'Mr and Mrs Average' got to enjoy a couple of years as a reward for working productively for the benefit of the nation. Life expectancy has continued to increase, and while we still retire at 65, we are now likely to live to 83 (Statistics New Zealand, 2026a). That means an 18 year retirement pension payback from nation in return for our years of productivity. Retirement no longer compulsory: many enjoy working and want to keep contributing (Spoonley, 2020), but there are 17% of us over 65 (World Bank Group, 2026).

There is also a large percentage of us who can't afford to retire: those who don't own their own home; those who spent a lifetime looking after families so have few savings; those who have spent their lives being supported by their families so have no funds to make the pension liveable (Retirement Commission, 2023). This group of Kiwis at risk will form a significant financial burden for our future selves, and we need to plan how we will manage that humanitarian burden in a humanitarian way.

While easy to see in hindsight, instead of an age, we may have been better to have linked retirement and the pension to our life expectancy. Then successive governments would have found managing the cost of retirees relatively simple. Not only is this is a seriously unpopular topic to make change on - who is going to vote to retire later - there is a large block of older voters who all go to the polls.

(Good thing an ex-PM didn't use our retirement funds to fund some dams and stuff, eh. Oh wait: he did. But it was OK: twenty years later we set up another one. No harm done - only fifty years lost. I am sure that won't matter a bit.)

However, the real problem is not retirement: the real problem is birthrate. If we had enough young people coming along the population pipeline to balance out those of us who will be 'enjoying' living on half the minimum wage for the remainder of our natural, there would be no problem. But our replacement rate has dropped off a cliff, to 1.56 (Statistics New Zealand, 2026b). We used to simply plug the gap with migration: but if every other nation on the planet is experiencing the same issue with declining populations (Shaw, 2025), where will we get our new migrants from?

This bulge will go away, of course: retirees will die, but there will be fewer people to pay tax and to keep the lights on.

As a nation, we need to discuss retirement, perhaps retiring retirement, or change will 'happen' to us. Our ability to plan and effect change will be taken from us by paralysis and inaction.

I don't know what we will decide, but we really need to talk about it.

Sam

References:

Global Stats. (2021, February 20). Countries with highest Life Expectancy (1800 - 2099). YouTube. https://youtu.be/30TjaV4F3g

Retirement Commission. (2023). Tauākī Whakamaunga Atu | Statement of Intent 2023-2026. Te Ara Ahunga Ora. https://assets.retirement.govt.nz/public/Uploads/Corporate-reports/Statement-of-Intent/Statement-of-Intent-Tauaki-Whakamaunga-Atu-2023-2026.pdf

Schlaadt, R. J. (2009). Planning for retirement in 2025: A Delphi study. Retirement preparation – why is it so difficult? [Doctoral thesis, University of Otago). https://ourarchive.otago.ac.nz/esploro/fulltext/graduate/Planning-for-retirement-in-2025-A/9926479203301891?repId=12396704130001891&mId=13397144580001891&institution=64OTAGO_INST

Shaw, S. J. (Writer, Director, Producer). (2025, September 19). Birthgap [documentary film, Torch Pictures]. YouTube. https://youtu.be/m2GeVG0XYTc

Spoonley, P. (2020). Chapter 1: A Reshaped Society. In The New New Zealand: Facing demographic disruption (pp. 9-23). Massey University Press.

Statistics New Zealand. (2026). New Zealand cohort life tables: March 2025 update. https://www.stats.govt.nz/information-releases/new-zealand-cohort-life-tables-march-2025-update/

Statistics New Zealand (2026b). Net migration falls in 2024. https://www.stats.govt.nz/news/net-migration-falls-in-2024/

World Bank Group. (2026). Population ages 65 and above (% of total population) - New Zealand. https://data.worldbank.org/indicator/SP.POP.65UP.TO.ZS?locations=NZ