The new retirement reality: Working beyond 65

Around 25% of New Zealanders aged 65-plus are working.

We’re living longer, we’re in better health and our jobs are less physical – is it any wonder that more Kiwis are choosing to work beyond retirement age?  

Around 25% of New Zealanders aged 65-plus are working.

Many people enjoy working to keep themselves connected and engaged, and because their work helps to define them, says Martin Hawes, authorised financial adviser and author.

Others work because they need the money, or for a combination of reasons.  

Even a small amount of work can make a big difference.

“From a financial point of view, a small income substitutes a great deal of capital,” Hawes said.

“Even if you only earn $10,000 a year, to get that from your investments you would need around $250,000, he said.” 

Once you turn 65, you start receiving superannuation, currently up to $420 a week after tax.

That money will keep arriving in your account regardless of how much you work.

You’ll pay more tax on a higher income, but the more you work the more money you’ll take home. The majority of Kiwis are very dependent on superannuation and up to 40% get by on superannuation alone.

It goes without saying though - having more money will give you more choices in retirement. 

Planning for a working retirement 

"Although there is plenty of evidence indicating that older employees make excellent workers, in reality it can be tough to get a job as you get older," Hawes said.

One of his clients had a high-paying job in his mid-fifties and decided to take a year out to sail around the world, “and when he came back he couldn’t get a job for love nor money”.  

“Anecdotally, I hear there is quite a lot of ageism,” he said. 

This can make a later-life career change very difficult, so plan ahead for what your working future might look like, Hawes advises.

If you’re in a high-pressure job and you don’t want that to continue, are there parts of your job you could focus on that you enjoy?

Or if you’re in a physically demanding trade, can you can reposition your skills in your industry: “Builders, for instance, might start working towards becoming building inspectors.”  

The health benefits of working  

And the benefits of work may go beyond the financial: research indicates those who work beyond retirement age have better health and a reduced risk of dying.

Your workplace might also provide those important social connections that boost our wellbeing and resilience.  

“I choose to work, but I’m not working the hours I used to,” says Hawes, who is 68.

“I’ve stopped working nights and weekends, but I’m still trying to do what I can to help people. For me, that’s an important part of what I do and my philosophy.” 

Meet a 72-year-old self-employed consultant 

Dr Christopher Bloore has been a self-employed consultant for 30 years and continues to work into his 70s. 

The chemical engineer, who specialises in dairy industry systems, says his clients are still offering him work so he has no plans to stop working in the immediate future. 

“I’m not actively seeking work, so my workload has tapered off somewhat over the past few years.  Most of my recent work is repeat business from well-established clients,” Dr Bloore said. 

“I can choose to stop when I want to, but I’m having too much fun at the moment,” he said. 

Dr Bloore is based in Dunedin but prior to COVID-19 traveled regularly abroad for his work.   

“COVID has meant this year there has been far more video sessions rather than face to face meetings, and I’m not missing the travel as much as I thought I would. 

“I have never experienced ‘ageism’ and my many years of experience generally count in my favour than against me,” he said. 

He only plans to go into retirement when his work no longer supports the cost of his insurance. 

“There will come a time when the volume of work won’t support the cost of liability and indemnity insurance and that will probably be a good time to stop. 

“I do some work in association with companies which provide me with their insurance cover, and these will probably be the last jobs I cease accepting,” he said. 

Dr Bloore’s tip for people nearing retirement is to try and find a way to monetize a hobby. 

“During a working life we pick up many skills.  Only some are directly related to our employment. 

“I meet quite a few people who have turned their hobbies and interests into part-time work opportunities to supplement their income in retirement. 

“A schoolmate from Blenheim reconditioned model airplane motors (diesel and glow plug) and resold them by mail order overseas,” he said.