How much do you need to save for retirement?

Everyone wants that golden figure when it comes to retirement savings. It’s much easier when there’s one figure to aim for, to ensure you’re comfortable in your later years.

It’s the number one question the financial advisers at Pie Funds are asked.

And, it’s one of the hardest to answer, because everyone’s situation and goals are different.

But that’s not so helpful if you’re wanting to know what to aim for. So, we’ve come up with some tips from the experts to help you calculate, roughly, how much you might need.

Will you have a mortgage-free house?

Where you’ll live has a big impact on how much you’ll be spending in your golden years. Will you have a mortgage-free home? If so, that’s great. You might be able to downsize to free up some money later. If you’re renting, you’ll need to save more. What city will you live in? The cost of living will vary depending on where you are living.

When will you stop working?

It’s hard to put an age on when you’ll stop working – this is likely something you’ll look at as you get closer to retirement age. Kiwis are living longer, and many of us are still working long past the traditional retirement age of 65. Some stop work at 65, then work part-time later on. Once you have a plan for when you plan to give up work, it’s easier to make calculations.

How long will you live for?

Not many people have an answer for this! But there are some things you can think about. How’s your health? And what about your family history? Financial advisers say if you’re healthy, it’s good to base your estimate around the average life expectancy in New Zealand – 79 for men and 84 for women, based on the latest Statistics NZ data. It’s a gamble – you could live far longer, but it’s a good target to aim for.

What about the fun stuff?

It’s hard to calculate a retirement savings amount that works for everyone, because spending is so different between households. The lifestyle I want in my retirement could be so different to yours. If you’ve got a bucket list of international travel destinations, you’ll need more money than the retired person who will only travel as far as family down the road.

Circumstances change

It’s a bit depressing, but it’s important to remember that people’s circumstances change. If you hit health hitches, you might not be able to keep working for as long as you planned. You might divorce or have a partner die, which could have a huge impact on your financial situation. Life doesn’t always go as planned, so keep this in the back of your mind. It’s better to be over-prepared than leave it to chance.

Don’t forget about NZ Super

When you turn 65, you’ll be eligible for NZ Super, which is money from the government to help you when you’re older. When you’re planning for retirement, include this as part of your income.

But how do you calculate how much you’ll need?

When you get a few years out from retirement, it becomes easier to make more accurate calculations.

Work out your current expenses, and how much you want to have to spend. Work out what age you’ll stop working and how long you could live for. Set aside money for emergencies, plus any large expenses you can plan for, for example a new roof on the house, or an overseas trip every year. This should give you a rough figure. But use this as a guide only.

Calculation: Yearly expenses x how long you’ll live = how much you might need.

It’s also a good idea to speak to a financial adviser when you’re getting closer to retirement, say, 10 years out. This means you have enough time to make any necessary changes to your savings plan.

You can also look at Sorted’s retirement planner.

Start saving now

The golden rule is no, no matter what age or stage you’re at, it’s never too early to start putting something aside. Contributing regularly to KiwiSaver is a great start, and it’s good to get into the habit of saving early.

James Paterson is the Head of Wealth and an authorised financial adviser at Pie Funds. You can access his disclosure statement free of charge at 

Information correct as at July 2022. Pie Funds Management Limited is the issuer and manager of the JUNO KiwiSaver Scheme. Click here for our Product Disclosure Statement. Any advice is given by Pie Funds Management Limited, and is general only. It relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees if you act on any advice. As manager of the Scheme we receive monthly fees that are determined by your balance and whether you are 13 years or over. We will benefit financially if you invest in our products. We manage any conflicts of interest via an internal compliance framework designed to ensure we meet our duties to you. For information about the advice we can provide, our duties and complaint process and how disputes can be resolved, visit All content is correct at time of publication date, unless otherwise indicated. Past performance is not a reliable indicator of future returns. Returns can be negative as well as positive and returns over different periods may vary. Please let us know if you would like a hard copy of this disclosure information.