How much do you really need to save for retirement?

With the right information, preparing for retirement can be a rewarding experience. To help ensure you’re on the right track for the retirement you want, we've pulled together some key points for you to consider.

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Retirement planning can seem like a good job to do on ‘another day’, but it doesn't have to be a slog. With the right information, preparing for retirement can be a rewarding experience. To help ensure you’re on the right track for the retirement you want, we've pulled together some key points for you to consider.

Thinking about your retirement goals

Retirement goals vary from person to person, so it’s helpful to work out your ideal retirement savings figure. Large retirement savings figures can be overwhelming but breaking the figure down into a weekly income (which could include regular withdrawals from your KiwiSaver account) can make it more manageable.

As a starting point, the below table from Massey University’s retirement expenditure research provides guidelines for ‘No Frills’ and ‘Choices’ ‘weekly incomes’ aimed at single and two person households across New Zealand[1].

Source: New Zealand Retirement Expenditure Guidelines - Massey University

This research can give you a rough idea of your future weekly living costs in today’s dollars. However, it's important to go a step further and consider whether you’re on track, and whether your current or projected savings will be enough to live the kind of retirement you want. For instance, you might see yourself travelling often, spending more time with family and friends, or taking up new hobbies that mean you need more weekly income than the ‘No Frills’ and ‘Choices’ budgets suggest.

Making sure you’ve saved enough

If you’re a BNZ KiwiSaver Scheme member, use our online calculator to work out how much your KiwiSaver balance could grow by age 65. What’s more, you can see what impact some simple changes might have on your future account balance. There are other good online tools to help you with retirement planning, like those on sorted.org.nz. Also, you’ll probably receive a prediction of what your account balance could be at age 65 in your KiwiSaver Annual Statement.

If, like a lot of New Zealanders, you have a gap between what you're projected to have and what you need for retirement you could increase your employee contribution rate - choices include the default 3.5% rate, as well as 4%, 6%, 8%, and 10%, or you could set up voluntary contributions to help ‘bridge the gap’. Being in the right KiwiSaver fund is also important because picking one that doesn't align with your retirement timeframe could mean you end up with less in your retirement pot than you want.

Why is fund choice so important at retirement?

If you're at least a few years away from needing to access your KiwiSaver funds for retirement, you might consider a fund with a higher level of risk and potential return because you should have more time to recover from any short-term setbacks or market dips.

But, if you're close to retirement (or already retired) and looking to access your funds soon, you might want to consider a lower-risk fund. This should give you more certainty about your savings when planning for the retirement you want. For more information about each of our BNZ KiwiSaver Scheme funds, visit our online fund guide.

Tip: If you’re close to retirement or already retired, it’s a good idea to calculate how your KiwiSaver savings might be regularly withdrawn and spread across your retirement to create your weekly income.

Creating a retirement plan is a crucial first step towards achieving your dream retirement. That’s why it’s important to think ahead and make sure you’re on top of your retirement goals before you ‘hang up your boots’.

How to make the most of KiwiSaver

Here are five tips that will get you off to a great start in terms of securing your financial future.

Choosing the right KiwiSaver fund for your life stage

KiwiSaver isn’t set-it-and-forget-it. Find out the importance of regularly reviewing your KiwiSaver fund choice, and the best times in life to do it.

Choosing the right fund for your retirement timeframe

Being in the right fund is important for all KiwiSaver members – and it’s especially important when you’re close to retirement or already retired.

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[1] The No Frills guidelines reflect a basic standard of living that includes few, if any, luxuries. The Choices guidelines represent a more comfortable standard of living, which includes some luxuries or treats” (New Zealand Retirement Expenditure Guidelines, 2023, p.5).

References to third party websites are provided for your convenience only. BNZ accepts no responsibility for the availability or content of such websites.

This article is solely for information purposes and is not intended to be advice with respect to any matter discussed in it. If you need help, please contact BNZ or your professional adviser. Neither BNZ nor any person involved in the material accepts any liability for any direct or indirect loss or damage arising out of the use of, or reliance on, all or any part of the content.

BNZ Investment Services Limited is the issuer and manager of the BNZ KiwiSaver Scheme. A product disclosure statement for the scheme is available at bnz.co.nz.

No representation or warranty is made as to the accuracy, reliability or completeness of any statement made in this article.