Imagine finishing your last day at work, then walking out the door into retirement with the sun on your face. It’s a glorious thought, but the financial realities of this life chapter can be a bit trickier. NZ Super will help cover essentials, but for most people it won’t cover everything, which means you’ll need some savings or investments to close the gap.
But how much do you really need to retire in NZ?
We’ve looked at the research and crunched the numbers for this guide to lay out a few practical ways to help you plan for your golden years.
How to calculate how much you’ll need in retirement
To figure out how much you need to retire in NZ, there’s a basic equation with three moving parts:
- Total cost of your retirement: this depends on the type of lifestyle you want. You can assume you’ll be covering the years from 65-85 at least (assuming you live a bit longer than the average Kiwi).
- Superannuation income: this is the baseline income most eligible Kiwis receive from 65. Woohoo!
- The shortfall between superannuation and total cost: or in other words, how much of your own money you’ll need to keep yourself going.
The shortfall is the gap we’re trying to estimate, which can be difficult because we don’t know exactly what future-us will spend. But we can make an educated estimate (or copy other people’s homework).
Other stuff, like investment returns, will complicate your sums, but we’ll get into all that later.
How much superannuation income will I get when I retire?
Once you’re eligible (generally from age 65) you get a fortnightly superannuation payment that continues for life. This can cover some of your retirement expenses, but it’s unlikely to cover everything unless you live an extremely frugal lifestyle, are mortgage free, and only purchase the most basic necessities.
To help you include this income in your retirement calculations, we’ve noted the weekly, and yearly amounts you’ll receive based on current super levels below. The 65-90 row is the amount you’ll receive in the 25 years after retirement - which is the total you’ll get assuming you live to 90, well beyond the average life expectancy in NZ (80 for males and 83 for females).
NZ Superannuation payments after tax
Single household | Two-person household | |
|---|---|---|
Weekly | $519.47 | $799.18 |
Yearly | $27,012 | $41,557 |
Total 65-90 at current level | $675,300 | $1,038,925 |
How much does retirement actually cost? According to the experts
While there isn’t one universally accepted method for working out how much retirement costs, here are some expert-backed approaches you can use to estimate your weekly spend:
Massey University research on retirement spendings
Massey University retirement research looked at the real spending habits of retirees in 2025 and came up with the below weekly spending behaviours (all assuming that retirees are mortgage-free and not paying rent).
- A no-frills lifestyle, means minimal travel outside of your area, budget food shopping, and few, if any luxuries.
- Choices include some luxuries and treats. You won’t be staying at the Ritz, but you might be able to afford the odd trip away.
We’ve also deducted superannuation off these to give you an idea of how much you’ll need to cover yourself per week after you’ve spent your super.
Massey University average retirement expenditure (weekly)
No frills metro (city) | No frills provincial | Choices metro (city) | Choices provincial | |
|---|---|---|---|---|
One person household | $705.34 | $580.75 | $790.62 | $771.89 |
One person household (minus super) | $185.87 | $61.10 | $271.15 | $252.42 |
Two person household | $937.38 | $1060.65 | $1780.32 | $1243.41 |
Two person household (minus super) | $138.2 | $261.47 | $981.14 | $444.23 |
Source: The Massey University New Zealand retirement expenditure guidelines as at 30th June 2025
Now that we’ve got the above numbers we can figure out how much we’ll need in total on top of super to fund at least 25 years of retirement. Here’s what that equation might look like:
Weekly cost (minus super) x 52 = One year cost One year cost x 25 = total cost of retirement*
Using this equation, if you were to live a no-frills lifestyle in the city in a single household, you’d need $241,631 at a minimum on top of super. For the choices lifestyle, you’d need $352,495 total at a minimum on top of super.
*Note: this is a simplified calculation for general information only.
MoneyHub’s take on retirement lifestyles
MoneyHub suggests that the income required for retirement is based on retirement lifestyles. They use the following categories to help you decide where you may sit:
- A modest lifestyle covers basic needs, occasional domestic holidays, dining out monthly, the odd GP visit, and reliance on the public health system.
- A comfortable lifestyle includes travel overseas every few years, eating out weekly, handling unexpected health events through private healthcare, and being generous with family.
- A luxury lifestyle is enjoyed by fewer than 20% of retirees. This means private healthcare, regular dental, regular international travel, frequent dining out, new cars, significant family support, and financial freedom.
Modest | Comfortable | Luxury | |
|---|---|---|---|
Annual household income required | $50,000 to $70,000 | $80,000 to $100,000 | $120,000+ |
Total income required over 25 years (65-90) | $1.25m to $1.75m | $2.0m to $2.5m | $3.0m+ |
Total amount required on top of NZ Super | $210,000 to $710,000 | $961,075 to $1.46m | $1.96m+ |
Source: https://www.moneyhub.co.nz/retirement-how-much-money-you-need.html at as 31 Jan 2026
MoneyHub’s estimates based on lifestyle are a great starting point, but the thing is, it can be really tricky to know how you’ll spend and live when you stop working. Both Moneyhub and Massey University consider the amount you would spend over retirement, not the amount you need when starting retirement. This ignores any above-inflation growth your savings might have over those 25 years. Luckily there’s another method of working out what you need that’s based on income.
The income replacement method
The Retirement Income Interest Group - part of the New Zealand Society of Actuaries, suggests that instead of focusing on lifestyle, it’s more realistic to look at pre-retirement income.
Under this framework a retiree would be deemed to have enough savings if they are able to generate 80 of their pre-retirement income per year, from age 65 until they are 90.
- $605,000 savings would be enough for a median earner (around $72,000 p.a.)
- Or $375,000 if their spending were to fall 2% a year (which is a pattern frequently seen in retirement).
According to their calculations, a 5% contribution rate matched by an employer would deliver this amount for most median income earners. This assumes regular contributions, and no withdrawals from the age of 20-65 (which doesn’t consider the many Kiwis who use their KiwiSaver for their first home).
Using this method, start with the income you want to replace and work backward from that number.
Drawing down on retirement savings
Most retirement plans assume you will withdraw 4-7% of your retirement savings every year from 65. Chances are, you’ll be in the upper end of that range, unless you’re an extremely effective saver, and/or live frugally.
- If you withdraw 4% to 5% per year, your savings will last the distance barring something unexpected, and you won’t need to reduce spending later in life.
- If you withdraw a more realistic 6 to 7% a year, your savings should last over 20 to 25 years - but this assumes spending reduces later in life (which does happen naturally for most retirees).
Both of these scenarios require you to keep your retirement savings somewhere they can earn a return.
Where to keep my retirement savings?
While it is hard to generalise when everyone’s personal and financial situation is unique, many retirees split their savings up into different buckets based on when they’ll need it.. Here’s what that might look like:
- Three years of spending money in a stable, very low-risk investment, like term deposits or a high interest savings account.
- Funds for the next 3-5 years in low risk investments such as the Kernel Conservative Fund or Kernel NZ Bond Fund.
- Funds for the next 5-7 years in balanced investments (50% to 60% growth assets), like the Kernel Balanced Fund
- Funds needed in 7+ years in mainly high growth investments (90%+ growth assets), like the Kernel High Growth Fund.
This diversification protects the savings you need now from market downturns, while still ensuring they’re earning a small return. The funds you need later are invested in more volatile, but likely higher-returning assets as the extra time helps to smooth out volatility and reduce the risk of a downturn affecting your retirement.
Four final tips to ensure you have enough for retirement
- Don’t forget inflation
The future buying power of your retirement savings is what matters, so don’t forget to account for inflation.
It’s safe to assume at least 2.5% inflation per year, every year until you retire, meaning $1,000,000 today will have the buying power of $600,000 in 20 years.
2. Be conservative
It’s better to be safe than sorry, especially when planning for retirement. It’s a good idea to assume slightly lower investment returns, slightly higher living costs, and a longer life than expected. That way if things go badly you’ll be covered, but if they go well, you’ll be golden.
3. Add a 15% to 20% buffer
Once you have your number, consider adding 15–20% for surprises. Accounting for market drops near retirement, health costs, or helping family more than you expected, will hopefully help you avoid having to limit your lifestyle later in life.
4. Start right now - and make a plan
Whether you’re in your 20s or your 50s, the best time to start planning, saving, and investing for retirement is right now. Time is your biggest weapon - the more time you’ve got, the more you’ll be able to save and earn from your investments. Here’s our actionable list to help you get started right now:
- Set clear and actionable financial goals.
- Save an emergency fund.
- Make sure you’re in the right KiwiSaver fund.
- Optimise your KiwiSaver contributions to 6% or more if you can.
- Make sure you have a balanced, diversified portfolio that is tailored to help you reach your goals.
Retiring comfortably in New Zealand is absolutely possible, but it requires realistic planning and consistent action. Start now, keep going, and your options at 65 will be much better.
