New Zealand is finally catching up with the rest of the world and considering changing the age of eligibility for NZ Superannuation from 65 to 67.

However, the four-year process to make this transition doesn't start for another 20 years.

In the interim, the number of pensioners is burgeoning and life expectancy is increasing.

When the old age pension was first introduced it was intended to allow people to enjoy a few short years of rest before the end of life.

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That was in the days when people didn't often live past their 70s.

NZ Superannuation is set at 65 per cent of the national average wage.

That's enough to cover usual weekly expenses, but not enough to allow money to be saved to replace a car, maintain a house or enjoy overseas holidays.

While it is possible to live from week to week on a low income for a few years, increased life expectancy means that retirees now face spending perhaps 30 years or so on a meagre income.

Statistics show that around 40 per cent of pensioners rely solely on NZ Superannuation for their retirement income, and for a further 20 per cent, NZ Superannuation makes up 80 per cent of their income.

The prospect of living on such a low income for a long time is a daunting one.

For those pensioners who are lucky enough to have a retirement nest egg, investment returns are low.

The combination of low pensions, low rates of investment return and increased longevity means the elderly are facing an increasing probability of living in poverty in the final years of life.

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It is no surprise that 40 per cent of people aged 65 to 68, and 20 per cent of people aged 70 to 74, are still working.

- Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847. For free e-books, go to moneymax.co.nz and moneymaxcoach.com.