New Zealand’s Superannuation (NZ Super) provides a basic income for retirees, but it’s not exactly a recipe for a lavish lifestyle. However, with a pinch of open-mindedness and a generous dash of geo-arbitrage, you can stretch your pension significantly. By spending part of the year abroad in a warm, affordable destination, you can enjoy a more comfortable lifestyle for less. Imagine trading New Zealand’s chilly winters for sunny, budget-friendly escapes—combine lower living costs with adventure, and you’ve got the perfect recipe for financial and personal enrichment right there.
NZ Superannuation Overview
NZ Super is available to New Zealand citizens or permanent residents aged 65 or over. As of 2024, the rates are:
- Single (living alone): NZD 2,077.88 per month
- Single (sharing accommodation): NZD 1,918.04 per month
- Couples (each): NZD 1,598.36 per month
These payments are made fortnightly and can be received while living abroad, as long as you meet certain residency requirements. This assumes that you qualify for NZ Super to begin with. Personally I don’t understand why the New Zealand government rewards a couple who live together on the pension by giving them less per month than two single people? This fuels my fire to keep building my portfolio so that NZ Superannuation is never a factor for me. I hope you dear reader are empowering yourself so as not to be reliant on the government in your old age?
The 26-Week Rule for Overseas Travel
You can live outside New Zealand for up to 26 weeks per year without losing your NZ Super. This allows you to enjoy lower living costs abroad while continuing to receive your full pension payments. Spending time in countries like Bali or Chiang Mai, where rent and daily expenses can be a fraction of what they are in New Zealand, can provide you with an annual six-month adventure that makes you richer in experiences while also stretching your income much further than staying put in NZ.
Geo-Arbitrage in Practice
For instance, a retiree receiving NZ Super at the single, living-alone rate (2,077.88 NZD per month) could live comfortably in a country with a lower cost of living, such as Chiang Mai in Thailand, where rent could cost as little as $400–675 NZD per month. Add to this that food and restaurant costs are 40% – 60% cheaper in Chiang Mai compared to Auckland, New Zealand, and the quality of your life is going to skyrocket as well. By spending half the year abroad, you can enjoy a better quality of life while reducing living costs and eating some of the world’s best street food. Are we there yet?
Reducing Costs Even Further
To further stretch your NZ Super payments, consider alternative accommodation options like house swapping or volunteering. House swapping, where you exchange your home with someone else for a set period, can provide free accommodation, saving you on rental costs. Websites like HomeExchange offer platforms where you can arrange swaps with other travellers or retirees.
Additionally, many destinations offer opportunities to volunteer in exchange for accommodation and meals. This typically involves a few hours of work each day, such as helping with administrative tasks, gardening, house/pet sitting, or teaching English in exchange for food and shelter.
Personally, my girlfriend and I are pet-sitting in Valencia, Spain, during the Christmas/New Year period. Free accommodation and unlimited dog cuddles for 11 days! This really is the perfect combo—spending time in beautiful places while helping people… Okay, and the dog is a huge plus, let’s be honest.
Volunteering platforms:
For more information on combining geo-arbitrage and volunteering for huge benefits, check out this article.
If you were to generate additional income—such as renting out your home while you’re abroad or earning dividend income—this could further enhance your quality of life or allow you to reinvest the extra cash for future financial security. This approach could make a substantial difference, providing flexibility to either enjoy more luxurious experiences or bolster your savings.
Conclusion
Although NZ Superannuation may not provide a large income, it can still be a valuable asset when combined with geo-arbitrage. By being able to significantly reduce your monthly burn rate for up to six months per year, a geo-arbitrager can lower their annual expenses considerably. Coupled with strategies like house swapping, volunteering, and generating supplemental income, you can make the most of your NZ Super payments and live more comfortably. With thoughtful planning, spending part of the year abroad offers a strategic way to stretch your pension, enjoy new experiences, and live a life like few others.
Cheers
Andy
Florence, Italy
Sources Used