Saving for retirement can feel like a lofty – sometimes impossible – goal for many Kiwis. When everyday expenses already stretch the budget, it’s no surprise that retirement savings can sometimes fall to the bottom of the list. How do you plan for something that’s 20 or 30 years away, especially when making ends meet right now can feel challenging enough?
Estimating what a “comfortable retirement” might cost can feel like a wild guess. But that’s no reason to avoid planning altogether. The truth is, we can’t predict the future – but the earlier we start to prepare, the more resilient we become. Building strong financial habits early gives you a greater chance to thrive later on.
The Planning Dilemma: Top-Down or Bottom-Up?
When it comes to financial goal setting, many take a top-down approach: estimate how much you’ll need in retirement, then work backwards to figure out how much you need to save and invest each year to get there.
It’s a solid approach that works for many – but if you’re just starting your retirement savings journey and feel overwhelmed by a large number, that’s ok. There are other ways you can tackle the problem.
Instead of aiming for a million-dollar goal, start with small, achievable habits. Put away what you can afford. Build confidence. Refine as you go.
“Continuous improvement is better than delayed perfection.”
In the wise words of Mark Twain, progress is better than perfection. Start small. Invest early. Let momentum fuel your motivation. Small wins now can become the foundation of long-term success. And don’t forget that professional help is available at any point on your journey.
Australia’s Superannuation System: A Bold Benchmark
If you’re wondering what a “comfortable retirement” looks like in practice, Australia is setting the standard.
Over the years, the Australian Government has steadily raised its mandatory superannuation contributions – recently set at 12% of an employee’s income. Employers are legally required to contribute this amount, meaning a significant portion of the workforce is automatically building retirement savings.
Compare that with New Zealand’s KiwiSaver scheme: contributions start at just 3% (increasing to 4% by 2028), and participation is still optional. For many Kiwis, this likely won’t be enough to fund a comfortable retirement.
While we may still be catching up in terms of policy, we can’t afford to wait. It’s time to take our financial future into our own hands.
So, How Much Do You Actually Need?
The short answer: it depends.
Your ideal retirement will be shaped by your lifestyle goals, health, housing needs, and other factors. But even without a precise number, one thing is clear – if we use Australia’s 12% as a benchmark, many New Zealanders are falling short.
The good news? You can start shifting the dial – today.
What You Can Do Now?
- Start where you are. Putting a small amount aside regularly creates momentum. It’s the habit, not the amount, that builds traction. If you’re already making minimum contributions to your KiwiSaver investment, well done, you’re already on your way. Next, understand where you could be growing your wealth outside of KiwiSaver in other investments. The earlier you start, the more you benefit from compounding returns.
- Increase savings gradually. If higher amounts feel out of reach, that’s okay. Start with what you can and increase it over time as your income and confidence grow.
- Visualise your future self. Thinking 10, 20, or 30 years ahead can be hard. We’re wired to focus on the present, not the distant future. Try creating a mood board, journaling, or using tools that help you imagine the lifestyle you want later in life. The clearer the image of your future self is, the easier it becomes to make good decisions today.
- Automate and forget. Set up automatic contributions so your nest egg grows in the background. Less effort, more consistency.
- Talk to a financial adviser. A professional can help tailor a plan to your goals, circumstances, and values – turning abstract dreams into something actionable and achievable.
Small Steps Today Builds a Brighter Future
Not long ago, the global life expectancy was around 40 years. Retirement wasn’t even a concept. Now, many of us will live 25-30 years after we stop working. It’s up to us to make sure those years are financially secure.
A comfortable retirement doesn’t happen by accident – but it doesn’t require perfection, either.
Start where you are. Start small and… just start.
Work with AdviceFirst for your Retirement Needs
When you’re ready to make a bold financial move, reach out to our team of Financial Advisers.
The AdviceFirst team can help you make the most of your KiwiSaver investment, build a wealth portfolio or protect what matters most through insurance.
To find out more, call us on 0800 438 238, email letstalk@advicefirst.co.nz, or book a financial review here.
