Kiwis working on minimum wage, those on benefits, and anyone getting NZ Superannuation get a pay rise today.

The increases aren't a king's ransom. The minimum wage rises by 0.75c an hour or $30 before tax a week and the NZ Super rise ranges between $9.85 a week after tax for a single person sharing with others to $16.42 for a couple where both qualify.

The Commission for Financial Capability is calling on retirees in particular to think twice before spending this extra money. Saving a little or paying down debt soon adds up.

Of course some people simply can't survive on what they're getting already, and the extra cash will be swallowed up. But it's timely nonetheless to give some thought to what to do with the extra cash.

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Pay rise or pay cut

Oddly enough, those who reach the age of 65 and plan to live on NZ Super alone, don't always earn less. Those living on a benefit or part-time work leading up to retirement often receive more once they trade in their benefit for NZ Super.

I received an email from a relative this week who is delighted with the slight increase in her weekly income combined with free public transport. Even someone working fulltime on minimum wage supporting a couple, will also get slightly more.

On the other hand I have friends starting to creep towards retirement who still haven't pulled their heads out of the sand about how they're going to afford to live the lifestyle they're accustomed to. If they are forced to retire through illness or redundancy, life is going to be very tough.

Keep working

Working until you drop is fast becoming a way of life in New Zealand. Tom Hartmann from the Commission for Financial Capability says 27 per cent of men aged 65+ are still working full or part-time and 17 per cent of women.

Those figures are up from around 15 per cent and 4 per cent in 1987. While the idea of NZ Super is that we can relax in our older years, many people find they can't afford to do so, although some keep working voluntarily.

If their "retirement" involves a gradual dial back, they can learn to live over time on the lower NZ Super and — if they have it — KiwiSaver and other savings.

Those who don't change their work patterns will in the short term get a bonus when they receive NZ Super and could save it to build up a buffer, says Hartmann.

Save, spend or pay down work

Think twice before spending your pay rise, says Hartmann. If you can resist frittering it; save it, pay down debt or even put it in your KiwiSaver.

Some people are surprised that you can continue to save into KiwiSaver after retirement. But it is often the best place for retirement savings to be.

If you live until the age of 95, that money could be growing slowly until you need it instead of being eaten away by inflation in term deposits.

Understand the number

The people in my circle will mostly get a real financial shock if they have to survive on $400.87 NZ Super ($616.72 for a couple) after tax per week.

One admitted to me recently that he has accepted he'll have to keep working beyond retirement to keep up the family's lifestyle, whether he likes it or not.

Those people who will eventually do best at living on their reduced income in retirement are those who understand the number, says Hartmann. Etch those numbers into your brain, he says. The more you think about it the better planning you will do.

Budget

Whether you earn a large amount or a small amount, living comfortably on it requires ongoing analysis of your spending. What we consider to be essential spending isn't always.

The living wage

Without wanting to wander into the realm of politics, the more lower-paid Kiwis on the living wage the better.

I was interviewing recruiters recently who pointed out that care and support workers are now earning a good wage. Around 55,000 workers who were on the then-minimum wage of $15.75 moved to $19 per hour in July 2017 when they won pay equity.

Those working 30 hours or more a week added around $100 per week or an additional $5000 a year. The issue was that this work was mainly carried out by women, and they weren't being paid the same as people working in equivalent jobs mainly staffed by men.

The settlement also gives the workers more training and support.

Finally, anyone reading this who is just starting out in their working career, or at least hasn't retired — start saving a little, regularly.

Even if it's only the minimum in KiwiSaver a little over a long time adds up to not having to worry about any of this.