Cost of living: How much retirement income do you need?

December 19, 2023

How much money do I need to save for a comfortable retirement? It’s a key question to ask yourself, and the answer depends on the retirement lifestyle you have in mind. 

But one thing is almost certain: NZ Super alone is unlikely to be enough for any kind of retirement. Read on to learn more.

A closer look at retirees’ current spending

In October 2023, Massey University’s NZ Fin-Ed Centre published their annual “Retirement Expenditure Guidelines” report. This estimates how much New Zealanders need to have saved on average, on top of NZSuper, to support either a basic standard of living (‘No Frills’) or a more comfortable one (‘Choices’) with some luxuries and treats.

In line with past years’ trends, data shows that the ‘pension gap’ is widening. Here’s how much different households are spending weekly in retirement, compared to their NZ Super entitlements.

(Source: Massey University’s NZFin-Ed Centre, Retirement Expenditure Guidelines 2023, October 2023)

As you can see, regardless of the location or quality of retirement, NZ Super doesn’t cover the total weekly expenditure in any scenario. Apart from two-person households living in the regions, the gap is now in the hundreds of dollars for retirees. 

What’s more, the difference has increased between 2022 and 2023 for most household groups. Interestingly, though, the increase in expenditure was less than the overall inflation rate(or Consumer Price Index, CPI) for all but two household groups.

According to researchers, the rising cost of food was one of the largest contributors (with inflation of 12.3% in the year to 30 June 2023), followed by recreation and culture (+7.3%), housing and household utilities (+6.0%), and insurance (6.5%).

The bottom line

Keep in mind that these guidelines are just rough estimates based on a number of assumptions. They won’t tell you how much you need to save, or how much you’ll be spending. 

What these numbers tell us, however, is that it’s crucial to have a retirement savings plan and start saving as early as possible. If NZ Super alone is unlikely to be enough, the goal is to find other income sources to complement your pension entitlements. 

It all starts with understanding your future income retirement needs, and as always, we’re here to help. Get in touch: whether it’s through KiwiSaver or other investments, we can help you create a good-sized nest egg. 


The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.