How Much Do I Need to Retire in New Zealand
How Much Do I Need to Retire in New Zealand?
We all know retirement is on the cards, yet we often put planning for it on the back burner. Everyone’s outlook regarding how they would like to retire is different. Whether you dream of travelling, relocating to a smaller town, downsizing, or you want to spend time with the grandkids, understanding how much you’ll need to retire comfortably in New Zealand is essential to realising your dreams.
There's No One-Size-Fits-All Number
Your vision of how you would like to retire depends on your lifestyle choices.
A Massey University New Zealand Retirement Expenditure Guidelines 2024 report, retirees’ spending patterns are categorised into two main lifestyles:
- “No Frills” Lifestyle: Bare standard of living with little to no luxuries.
- “Choices” Lifestyle: Comfortable standard of living with luxuries or treats here and there.
Here’s a breakdown of the average weekly spend for these lifestyles:
One-Person Household
- Metro: No Frills $687.84 and Choices $768.76.
- Provincial: No Frills $564.25 and Choices $752.41
Two-Person Household
- Metro: No Frills $909.90 and Choices $1,739.85
- Provincial: No Frills $1,031.85 and Choices $1,210.18
Comparing with NZ Superannuation
As of April 2024, the after-tax weekly NZ Superannuation rates are:
- Single, living alone: $519.47
- Two-person household: $779.18
Savings Required to Bridge the Gap
A metro couple wanting a “Choices” lifestyle needs an extra $940.67 per week above NZ Super. That’s about $1.14 million in savings to sustain them from age 65 to 90.
A single person in a metro area aiming for a “No Frills” life needs an extra $168.37 per week, equating to $183,000 in savings
Starting at age 25, saving $135/week per person (for a provincial “Choices” lifestyle) gets you there. Starting at age 50? You’ll need $503/week.
Clearly, NZ Superannuation alone may not cut it for those hoping to achieve a “Choices” lifestyle.
Boosting Your Retirement Funds
KiwiSaver
If possible, regularly contribute to your retirement savings at the highest rates; the returns at the end of this long-term investment are bound to be very attractive. A 3% jump in your 30s or 40s can make a huge difference later.
Consider getting a KiwiSaver review to ensure you’re in the right fund and making the most of your contributions for long-term growth.
Tip: Book a consultation with our KiwiSaver specialist to review your fund type/balance and retirement projections. Information is key.
Extended Working
Staying longer at your workplace, even part-time, will generate additional income and also shorten the period during which your savings will be used.
Downsizing
Move into a smaller house or move to a cheaper area to free up some capital and live on less.
Budgeting
Regularly monitoring and updating one’s budget keeps spending within acceptable limits, and savings can be increased.
Case Study: David and Pam — Planning for a Comfortable Retirement in Tauranga
David (69) and Pam (67) live in a sunny three-bedroom home in Tauranga, which they’ve fully paid off. With their children grown and flown, they’re focusing on the next chapter: retirement.
David and Pam don’t live lavishly, but they do want a few comforts:
- Domestic travel twice a year
- One new car in the next 10 years
- Meals out with friends
- Private healthcare top-ups for peace of mind
To accommodate the above, a provincial couple aiming for a “Choices” lifestyle needs $1,210.18 per week or about $62,129 annually.
As of April 2024, NZ Superannuation provides them a combined $803.48 per week after tax, or $41,781 per year. If they want to maintain their desired lifestyle, that’s a shortfall of $406.70 per week—or around $21,148 annually.
To bridge that gap from age 69 to 90, David and Pam would need approximately $446,000 in savings. Their KiwiSaver accounts total around $180,000, and they have a $25,000 term deposit. That puts them at $205,000—less than halfway to the lump sum ideal.
David and Pam sit down with a financial adviser to explore options to boost their retirement income. One option is for Pam to continue working part-time for another two years, bringing in around $20,000 per year. This would reduce the pressure on their savings and help their KiwiSaver funds with Generate continue to grow. They could also revisit their fund type with Generate to ensure it’s aligned with their investment timeframe and goals. Additionally, they’ve considered downsizing to a smaller home or moving inland to a lower-cost area such as Te Puke in the next 5–10 years, which could free up $100,000–$200,000 in equity.
They’re also prepared to dial back their spending if needed and establish a flexible drawdown plan—balancing income-generating investments with growth assets to help their money last.
Why Extra Savings Matter
Retiring in New Zealand is not a ‘one size fits all’ approach. It needs to be tailored to your circumstances and how you imagine your life after age 65, including your finances. While NZ superannuation provides a good foundation, extra savings are often needed to accommodate a comfortable retirement and any setbacks you may face.
Ready to Personalise Your Retirement Plan?
Chat with the team at Rapson to explore how your mortgage, refinancing options, investments, and KiwiSaver can work together to support the lifestyle you want after 65. It’s a great time to book a review, especially with KiwiSaver in mind.
Rapson has a dedicated KiwiSaver specialist, Diana, who can help you make the most of your investment with Generate. Whether you want to grow your balance, adjust your fund type, or simply understand your options better, she’s here to help.