How much will I need to retire?
Everyone’s retirement needs are different. To work this out, start by thinking about how long you will have in retirement, what sort of lifestyle you will want, and where you will live.
How many years will I have in retirement?
There is no ‘retirement age’ in New Zealand. NZ Super is paid from age 65, but you don’t have to stop working to get it. These days, more and more people are working beyond 65 either full time or part time.
We’re living longer these days. On average, 80% of 65-year-old men can now expect to live until they're 90, and 65-year-old women until they're 94.
In the future, we'll probably live even longer. These figures are based on the latest Statistics New Zealand cohort life tables. Here’s where to estimate your life expectancy.
Let’s say you plan to retire at 65. You need to save or have another plan to provide the income you want for 25 years or more, and make sure your money lasts as long as you do.
What sort of retirement lifestyle do I want?
What will your cost of living be in retirement? Some costs may go up (like healthcare) while others (such as education, clothing, housing, work-related travel) may go down. If you have children, they will probably be financially independent.
You also need to think about what your goals might be in retirement – travelling to new places? Joining clubs, going out to dinner and shows?
Will I live in my own home or rent?
If you rent, you’ll need more savings to cover the cost – but on the other hand, you won’t have money tied up in a home.
However, owning the place you live in, debt-free, will reduce the risk of rent increases or being asked to find a new place to live. You'll have more control over your finances, but you will have to take care of maintenance, insurance and rates.
Being mortgage-free by retirement is a great goal to aim for. The reason many people currently in retirement are able to manage financially is because they no longer have the burden of mortgage repayments.
Budget for retirement
Getting close to retirement? It might be a good time to work out a detailed budget. Think about what weekly expenses might be in today’s money.
- Take basics into account, such as insurance, maintaining the house and car, or replacing a major appliance.
- Build in some funds for the unexpected.
- Think about the big things that might need to be paid for later on – like a new car, new roof or repainting the house.
Make a retirement budget with our budgeting tool.
Try it now