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Retirement may seem like a long way off but planning for it requires more than set and forget of KiwiSaver. What type of lifestyle would you like in retirement? And do you really need a million dollars to retire?
Pay no attention to headline numbers aimed to shock you into saving! You'll probably need far less than they let on. Think of it this way: for every $100,000 you save, that typically equates to around $100 a week throughout your retirement. And that’s on top of NZ Super. So most of us will not need that much to retire comfortably, but of course it depends on how you'd like your lifestyle to be. Here's where you can check your own retirement numbers easily.
Your answer depends on what your lifestyle goal is. Simply put, if you can fund your lifestyle target, you have enough! But what if you are not sure what your goal should be? It helps to have a look at what retirees are spending today in terms of a 'no frills' or 'choices' lifestyle, based on surveys. You may find your retirement number is lower than you think. Here's our helpful starter here.
It's never too early! In fact, the earlier you begin, the less you have to set aside regularly, and the more you can achieve over the decades to come. People tend to underestimate how much they can achieve in the long run. The other thing to do as early as possible: run your retirement numbers to see how you're tracking. The sooner you do, the more time you have to achieve your lifestyle goals. Here's our retirement calculator.
Ideally, yes. For most of us, retirement means stepping back from paid work and living with more of a fixed (and typically reduced) income, which can make carrying debt all the heavier. And the less we can use our retirement savings for paying back debt, the better. Our debt and mortgage calculators can help you chart the quickest way out of debt before you retire.
Good on you for asking the question now, just as you are ramping up your earning years. If you work out how many paydays you have left until you retire – there will be hundreds – you only have to set aside a small amount from each in order to set yourself up for a fabulous retirement. KiwiSaver is expressly made for building up your retirement savings, so you want to take advantage – especially since your employer and the government also contribute when you do. Focus on your fund type and your contribution rate, which will make the most difference. Try out our new KiwiSaver calculator to help you plan.
You can certainly have a decent retirement without owning your own property, although you will need to sort your accommodation. There are many of us who have been priced out of the housing market. One thing to consider is to funnel your savings into a managed fund that suits you. The figures show that you could enter retirement in better shape than a homeowner if you play your cards right. Here's more about managed funds.
Our newly revamped retirement calculator makes it easy to work out where you are at. You can enter in your projected KiwiSaver balance, NZ Super, and any other assets or income you expect to have when you retire. The calculator gives you some clear, round numbers of where you can expect to be – far ahead of time so you can make any adjustments you need to hit your future lifestyle goal. Here's our retirement calculator.
For many of us, there will be a gap between what we're on track to have in retirement and how much we'd like to have for our future lifestyle. The first steps to retirement planning are figuring out how much of a gap you may have, and then taking action to bridge it. Two important considerations are how soon you'd like to retire, and how long your typical retirement might be. You can also take a crack at how much you'll need by looking at what retirees are spending now. Here's some help to work out your own numbers today.
KiwiSaver is a highly regulated area that's made for retirement saving. These managed funds are portfolio investment entities (PIEs), and the professional fund managers are supervised by external companies charged with overseeing the managers. The money is held in trust for investors, and even if a fund manager's own business were to fail, our investments would be ring-fenced and remain untouched. We would stay on track, building toward retirement. Here's our retirement calculator to see how KiwiSaver and your other investments fit your lifestyle goals.
Glad you asked – we've recently revamped our retirement calculator and set the default to 25 years. But it's adjustable, and that's because many of us are both working for longer and living quite a lot longer. So it's best to work out your own number. After you take a punt at what age you'd like to retire, you can estimate your longevity more precisely using cohort data from Stats New Zealand. Here's where to estimate yours.
NZ Super is the government pension paid to Kiwis aged 65 and older. It's currently $437 for individuals, $672 for couples. Everyone eligible receives it, no matter how much they are still earning (you can still work and receive it), what they have in savings or investments, how much they own, or how much they’ve paid in taxes. You need to be a legal resident of New Zealand and have lived here for 10 years since age 20, with 5 of those years being after you turn 50. Here's more on how NZ Super works and the current rates.
It’s challenging to estimate how much you’ll need for your future lifestyle, but one way is to have a look at what retirees are spending now. Do you think you'll live in one of our large cities, or in a smaller town? That's one of the things that can influence how much you'll need. We've added some figures in our retirement calculator for you to work out your own retirement number. Here's where to find that tool.
Sounds like you'll be well taken care of! You can expect to receive NZ Super (currently $403 per week if you’re single and sharing a home). But perhaps you could also put your family in an even better position financially by taking up the heaps of money you could receive in KiwiSaver – from your employer, the government and the investment markets. It's more than just your savings going in, after all. Here's more on the benefits of KiwiSaver to consider.
Simply because: you are walking away from money that is rightfully yours. This is no small thing, as it amounts to thousands – and likely tens of thousands – of dollars difference for your future. This is because there is matching employer money as well as a government add-on that typically flows into KiwiSaver alongside yours. And the greatest gains typically will come from all that money being invested for you by professionals. So the costs of missing out are huge. Here's how much you could be stepping away from in our KiwiSaver calculator.
FIRE stands for 'financial independence, retire early', and it's a movement of people aiming to retire early by radically hacking their financial lives. By saving and investing large proportions of their earnings in managed funds, they are able to then live off their investment returns indefinitely. The higher their savings rate is, the earlier they can retire. So much of our skill with money comes down to our ability to save, and the FIRE movement proves that financial independence is possible. Here’s more about managed funds.
Generally KiwiSaver is only available at age 65 so it’s typically not for an early retirement – that money would need to stay invested and growing. There are some situations where you can access it earlier though. If you're withdrawing for a first home, moving overseas permanently, experiencing significant financial hardship, your health makes it difficult to work, or for other reasons such as a relationship breakdown, you could be able to withdraw your money. Here's more on how KiwiSaver works.
KiwiSaver was expressly built for retirement. (You can also use it for a first home, but it's primarily a retirement savings scheme.) It funnels money from you, your employer and the government into your account, investing it in units of investments that can grow in value over time and set you up for a comfortable lifestyle in retirement. Because it was built for purpose, you can use it for your core investing for the long term. Here's our new KiwiSaver calculator.
Yes. That said, the figures typically shown for how much NZ Super is – currently it's $437 a week for individuals, $672 for couples – are after taxes have been taken out. Here's where to find this year's NZ Super rates.
Especially when it's far off, it can be a bit of a mystery how much you'll need in retirement. But you can estimate enough to plan ahead. It’s challenging to work out how much you might need for your future lifestyle, but one way is to have a look at what retirees are spending now. Based on if you're planning with a partner, whether you’d like more lifestyle choices, and where you think you'll live, here’s how you can get an idea.
You need a really good reason not to use KiwiSaver for retirement. This is because it is not just your money flowing in – there is also money from the government and your employer (if you're an employee). You’ll miss out on that money if you don’t use KiwiSaver. That money is invested by professionals for the long term, and most of your retirement money will typically come from investment returns. That said, there are retirement schemes that can be better or more generous (although you may want to still use KiwiSaver to get the government contribution). If your employer offers one, go for it! Here's our KiwiSaver calculator to compare.
The '25x rule' aims to provide an answer to how much you need to retire: 25 times the annual income you'd like in retirement. So if you'd like $30,000 a year when you retire above NZ Super, you need to build up $750,000 through your saving and investing (25 x 30,000). It's important to know that this is just one way to set your retirement goal, and it may or may not be enough for what you are aiming to achieve. Our retirement calculator can help you see if it works for you.