Photo: Unsplash/ Anukrati Omar
If you're in a relationship with an age gap, it may affect your financial planning, particularly when it comes to retirement.
RNZ reported earlier this week that there are 3003 people who are receiving NZ Super despite being under 65, because their partners qualified and added them before the rules changed in 2020.
A handful of them were aged in their 20s and 30s.
Data from Stats NZ shows that such big age gaps are probably rare, particularly among people with children.
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Infometrics principal economist said Stats NZ collected data on different-gender partners with dependent children in their households.
That shows that 47 percent of these households involve adults whose ages are within five years of each other. Another 40 percent were within 10 years of each other. Just 13 percent had a gap of more than 13 years.
There was a difference by gender - 42 percent of men were partnered with someone younger and only 11 percent of men had an older partner.
Nick Brunsdon warned that this could be related to the way the data was collected.
"To be counted in this data you need to be in a couple with a dependent child, and age has a greater bearing on the fertility of females than males."
But he said it aligned with anecdotal data that it was more common for older men to partner with younger women.
He said the current settings for things such as NZ Super and the rest home subsidy assumed that partners were at equivalent stages of life.
When it comes to needing rest home care, the younger partner's assets are likely to be included in the means test assessment which determines whether someone can qualify for assistance from the government to cover the cost.
But he said it could work well for the retired person who had a partner who could take on more work or get a payrise to increase household income, in a way someone on the pension could not.
"With work around the house... having someone younger probably helps in that sense.
"If there's two of you who are 80, you're probably going to have to pay some people to do things for you... whereas if you've got someone who's 80 and someone who's 60 the person who's 60 is carrying a lot of burden at that point but can probably offer help."
Liz Koh, founder of Enrich Retirement, said she had dealt with women whose male partners were 20 years younger than they were.
She said age gaps could present challenges - including a statistically higher risk of relationships failing.
Liz Koh. Photo: CapturedByFridayPhotography2021-38
"Love is much more important than money, however age-gap couples need to be aware of what may lie ahead."
She said age gaps often included blended families, where one or both partners brought children from another relationship and potentially had more together.
"In the long term, this can create complexity for estate planning. An older partner has a natural duty to take care of his or her first family. First families can resent having to wait a decade or two to receive an inheritance from a parent who has left assets to a younger partner, yet a younger partner may be dependent on those assets to maintain an adequate standard of living.
"A life insurance policy taken out on the life of the older partner can free up funds to pay out first or second families on death, however, with age the premiums can become substantial."
She said there could also be a gap in the financial assets each partner brought to the relationship.
"A younger partner with fewer assets or a lower income may not be in a position to retire when the older partner is ready to retire. Differences in financial means can impact on spending plans in retirement unless one partner is prepared to pay the other's share."
She said people might need to split their retirement investments in two, with each invested according to one person's investment time horizon, to ensure that money lasted as long as the younger person did.
"Older partners often worry about what might happen to the younger one in the long term, and setting aside a separate portfolio can reduce this anxiety.
"With a longer time frame, the younger partner's portfolio can have a higher exposure to growth assets such as property and shares to ensure the value of the portfolio keeps ahead of inflation. It is possible that a younger partner will spend much of their retirement living alone, which is expensive. Rates, insurance and home and vehicle maintenance costs still need to be paid and increase over time."
Public Trust principal trustee Michelle Pope said her organisation often saw couples where one person was much older and had to confront some of the challenges Koh mentioned.
She said a family home was often people's biggest single asset and lawyers might recommend people who repartnered kept it as "tenants in common".
"This allows each partner to leave their separate share to whoever they choose."
She said giving someone a "life interest" through a will was one way that a younger partner could be given the right to stay in a family home or receive income from investments after their older partner died.
"Some wills set a time limit on the life interest, say, five or ten years, or end it if they find a new partner or remarry. This approach can give the surviving partner time to adjust and feel secure, while also providing certainty for children or other beneficiaries about when they'll receive their inheritance.
"Some people leave a sum of money to their children so that they receive their inheritance straight away, while their partner has the use of the property for their lifetime.
"And some families go down the route of setting up a trust, where the partner is a discretionary beneficiary and the children are final beneficiaries. You can often achieve a similar outcome with a well-written will and a life interest arrangement, without the ongoing costs and admin involved in managing a trust. Of course, trusts still have their place, especially for complex estates or specific protections."
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