NZ Super is your base
NZ Super is paid from 65 to almost everyone who meets the residence rules. It isn’t reduced by your savings or by what you earn from work, so you can keep working and still get it. It’s taxed, like other income.
NZ Super covers the basics for many people. KiwiSaver and other savings pay for everything on top: a car, travel, help with the family, repairs on the house, or simply more breathing room.
Set a target
A common rule of thumb is that you can take about 4% of your savings each year in retirement. Turned around, that means you need about 25 times the yearly income you want from your savings:
| Income you want from savings | Target savings |
|---|---|
| $10,000 a year | $250,000 |
| $20,000 a year | $500,000 |
| $30,000 a year | $750,000 |
That’s on top of NZ Super, which starts at 65. The 4% rule comes from US market history, so treat it as a starting point.
Start as early as you can
The same habit adds up to very different amounts, because money saved early has longer to grow:
- Starting at 25 About $18,041 a year at 4%
- $451,031
- Starting at 35 About $10,602 a year at 4%
- $265,062
- Starting at 45 About $5,584 a year at 4%
- $139,592
Starting at 25 instead of 45 gives you about 3.2 times as much
Assumes 3% pay rises a year and steady average growth after fees. Today’s money takes off inflation, so the figures show what the savings would buy now.
Try your own numbers:
After 30 years you’d have
$200,903
- You put in$72,000
- Growth$128,903
Start ten years later and you’d have $92,408: $108,495 less, though you’d only put in $24,000 less.
Returns aren’t guaranteed and vary from year to year. This assumes the same return every year, before fees and tax.
What the default gets you
Starting at 30 on $70,000 with $20,000 already saved, with 3% pay rises:
| You put in | Fund type | At 65 | In today’s money |
|---|---|---|---|
| 3.5% | Balanced | $1,069,000 | $450,000 |
| 6% | Growth | $1,851,000 | $780,000 |
At 4% a year, $450,000 in today’s money gives about $18,000 a year on top of NZ Super. A higher rate and a growth fund make a big difference over 35 years, though a growth fund has bigger ups and downs.
How to put in more
- Stay in KiwiSaver so your employer pays in too: at least 3.5% of your pay, rising to 4% from April 2028.
- Get the government contribution: 25 cents for each dollar you put in, up to $260.72 a year, if your income is $180,000 or less.
- Choose a higher rate if you can. You can put in 3.5%, 4%, 6%, 8% or 10% of your pay. The temporary 3% rate saves you a little now but costs you later.
- Pick the right fund. If retirement is a long way off, a growth or balanced fund has usually grown more over time.
- Check your fees. Sorted’s KiwiSaver fund finder compares fees and returns.
- Self-employed or not working? Pay in voluntary contributions, at least $1,042.86 a year, so you still get the government contribution.
Work out your own number
Our KiwiSaver calculator shows what your KiwiSaver could grow to by 65, with your employer and the government contribution. Already retired? See how long your savings will last.