How Much Should You Have in Your KiwiSaver by Retirement?

Whether retirement is just around the corner or still decades away, it’s important to think about how well prepared you are for when the time eventually comes. One of the most pressing questions that often comes up when we consider our retirement plans is: “Do I have enough saved?” The reality for most New Zealanders is that NZ Superannuation won’t fully cover the lifestyle many Kiwis envision. That’s where KiwiSaver comes in. Let’s explore how much you need saved and how KiwiSaver can help bridge the gap.

The Reality of NZ Superannuation

NZ Superannuation provides a solid foundation, but it’s not enough to support the lifestyle most people want in retirement. While it reduces the risk of outliving your savings, you’ll likely need more to enjoy the retirement you want. KiwiSaver is a great tool to help supplement NZ Super and enable you to achieve a comfortable lifestyle.

So How Much KiwiSaver Do You Need?

Planning for retirement can feel overwhelming, but Massey University’s 2024 New Zealand Retirement Expenditure Guidelines provide a useful benchmark for how much you’ll need to supplement NZ Super. The report divides retirement spending into two categories:

• "No Frills" – Covers basic living costs with minimal luxuries.

• "Choices" – Provides a more comfortable lifestyle, including discretionary spending.

Key Assumptions:

• Retirement starts at age 65 and lasts until age 90.

• The lump sum required is based on covering the gap between NZ Super and expected weekly spending.

• Savings are invested in a balanced fund with moderate returns.

• No additional income sources beyond NZ Super.

Preparing for a Comfortable Retirement

1. Assess Your Current Savings
Take a close look at your KiwiSaver balance and how much you're contributing. If it’s not enough, consider increasing your contributions or exploring higher-return investment options that align with your risk profile and retirement goals.

2. Think About Your Dream Retirement
What does your ideal retirement look like? Do you plan to travel, downsize your home, or spend more time with family? Start planning now so you can estimate how much you’ll need to support that lifestyle.

3. Account for Inflation
Rising costs will affect everyone, especially in retirement. Make sure to account for inflation when estimating your future expenses and how much you’ll need saved to cover those increasing costs.

The Bottom Line

The reality is that most Kiwis will need more than just NZ Super to live their ideal retirement. Whether through KiwiSaver, other investments, or personal savings, it’s important to start planning now. The sooner you begin, the more secure your retirement will be.

If you’re unsure whether you have enough saved for retirement, or need help finding the best KiwiSaver fund for your goals, don’t hesitate to get in touch. We’re here to simplify the process and ensure your in the best place possible to reach your goals.