If your goal is to retire in 2025 and avoid a lifestyle of “baked beans and heater-free winters,” you might need savings that reach seven figures. While there’s no one-size-fits-all answer to how much you’ll need, it largely depends on your desired lifestyle and the sacrifices you’re willing to make.

How much will you need in retirement?

A recent study by Massey University on retirement spending highlights that:

  • A single person living in a metro area will need over $700,000 to retire comfortably.
  • A couple may require between $750,000 and $1 million (or more) to enjoy a comfortable retirement with some added luxuries.

The role of NZ Super and drawdown rates

The Financial Markets Authority advises using a 4% annual drawdown rate on retirement savings. Meanwhile, NZ Super provides weekly after-tax payments of:

  • $519 for a single person.
  • $800 for a couple.

Other funding options

One potential funding option is a reverse mortgage, which allows homeowners aged 60 and over to borrow 30–50% of their home’s value. However, this requires being mortgage-free at retirement, and it may come as a surprise to family members if the home is heavily mortgaged.

Planning for your best retirement

Your retirement quality will ultimately depend on how much you’ve saved and invested. Unfortunately, many New Zealanders struggle to meet retirement targets due to a lack of financial literacy and the ongoing cost-of-living challenges.

Starting early is key. The sooner you plan, the easier it becomes to achieve your retirement goals—and that’s where Castle Trust Financial Planning can support you.

As Glyn from Castle Trust notes: “NZ Super is a safety net, not a lifestyle fund. To enjoy overseas travel, dining out, gifts for loved ones, home repairs, and more, having at least $500,000 in savings is crucial. Diversifying investments and ensuring you have some funds invested defensively and some targeting growth is crucial.”

Customizing your retirement plan

Everyone’s “comfortable retirement” number is unique. It depends on your goals, the lifestyle you envision, and the assets you can utilize. Surprisingly, many people spend more time planning weddings or holidays than they do their retirement.

A great starting point is understanding your current lifestyle, its costs, and the assets or income streams you’ll need to sustain it in retirement.

Let us help you plan your retirement spending

At Castle Trust Financial Planning, we combine our expertise, research like the Massey study, and advanced software to help visualize your retirement. By aligning your dreams with your financial reality, we’ll create a plan tailored to your needs.

Don’t leave your future to chance. Talk to us today and take the first step toward a fulfilling and secure retirement.