There’s a new NZ Super rate for individuals as of today, which makes $437 the new number to keep in mind this year. It helps to know how the government pension is tracking, especially when retirement is far away (it gives you time to plan), and obviously when it’s just around the corner.

What’s NZ Super worth?

Let’s say you were aiming to generate $437 a week for 30 years of retirement. How much money would you need in the bank?

Using our retirement planner, it looks to me like you’d need to have close to $487,000 in a balanced fund and draw it down entirely over those three decades. (If you’re curious, that’s a net real return of 2.4%, which is what we estimate you’d get after fees, taxes and inflation.) That’s to spin off $437 each week.

We’re fortunate to have NZ Super already in place, so we don’t have to save the $487,000.

But the thing is, many of us will undoubtedly need more than $437 per week to live on, especially if we need to cover housing costs like rent, rates, insurance and maintenance. Not to mention all the activities we’re hoping to knock off our bucket lists when we step back from full-time work.

Mind the gap

The thing is, it’s all about the gap. The gap between what you’ll need and what you’re on track to have. Nailing your retirement number gives you the time to achieve the lifestyle you’re after.

Nowadays, 40% above 65 have virtually no other income besides NZ Super. And another 20% have only a little more. It keeps a lot of us out of hardship. And because of it, we can focus on just saving the amount we’ll need on top.

The gap could widen

As a pension system, NZ Super is relatively inexpensive compared to others around the world. But because many more of us are living longer these days, it is becoming more difficult to sustain.

Many 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 NZ Super could very well be paid out later than it is now or at a different amount.

How are you tracking in KiwiSaver?

For most of us, that gap will be filled by saving and investing. Like many things, the trick is to start early and start small. Yet even if yesterday would’ve been a great time to start, today is always better than putting it off to tomorrow!

Those consistent savings, coupled with the compounding returns from investing, will be what it takes to bridge the gap. KiwiSaver can certainly help.

You can use our KiwiSaver tool to estimate how much you’ll have in KiwiSaver when you retire. This allows you to make decisions on whether you’d like to increase your contributions or change what type of fund you’re in – to aim for even better results. 

It’s easy to fall into the trap of thinking that just because we’re in KiwiSaver, we’re set for life. Checking where it’s headed and making sure it’s set up right – such as being in the right type of fund for us – will help us make the most of it and see whether we’re being realistic.  

Figure out your retirement number

How far away is your retirement? How long does your money need to last? What’s your target number above NZ Super?

Run your own retirement projections today, and play with the numbers a bit until you nail yours. It’s the beginning of a plan.

Once you know, you’ll find ways to hit your mark. If you have decades up your sleeve before you’ll need the money, you could consider switching fund types and have an investment mix that's 'growth' or even 'aggressive'. Have a look at what difference this could make in our KiwiSaver tool.

And many of us will need other investments or solutions besides KiwiSaver to bridge the gap.

For example, this might mean investing in shares, managed funds or an investment property. It could also mean adding a side hustle, starting an online business or buying into a franchise.

There’s no one right answer for everyone. The important thing is to know what your options are when it comes to preparing for the future.

Comments (4)

Gravatar for Tom from Sorted

Tom from Sorted

9:48pm | 3 May 2021

Thanks Phil, we use 2%, which is the midpoint of the Reserve Bank's target range (1-3%).

Gravatar for pHIL mENZIES


1:22pm | 26 Apr 2021

What rate for inflation did you use please?

Gravatar for Tom from Sorted

Tom from Sorted

3:38pm | 19 Apr 2021

Thanks Kylie, here's a good place to start:

Gravatar for Kylie Mackenzie

Kylie Mackenzie

11:25am | 14 Apr 2021

How much would I get if I was too do a hair dressing course im a single mum my rent for 3 bedroom house is 520 a wk then need too pay for food an power water an lawn