KiwiSaver

New expenditure guidelines show how much New Zealanders need in their KiwiSaver to retire comfortably.

Kiwis who want the odd luxury in retirement need between $273,000 and $1.033 million on top of superannuation, according to the latest Retirement Expenditure Guidelines. For a more modest 'no frills' retirement, they would need between $118,000 and $181,000.

Financial Advice NZ chief executive Nick Hakes says advisers are more needed than ever to help New Zealanders get there.

Released by Massey University's Fin-Ed Centre, the guidelines are based on actual spending patterns of retired New Zealanders who receive superannuation. The report shows a weekly expenditure of $705-$1,780 depending on household type and location – well above what superannuation provides.

The savings gap
As of April 2025, a single person living alone receives $538.42 per week on superannuation. Total expenditure for the ‘no frills – metro’ category is $705.34. This trend extends to every type of household.

In short, everyone is spending more than superannuation would give them.

To bridge the gap, a one-person household would need to save between $71 – $218 weekly from age 25, depending on lifestyle and location. From age 50, those figures increase to $54 – $325 weekly.

A two-person household would need to save up to $406 weekly from age 25, and up to $1,230 from age 50.

At the same time, retirees are spending more on essentials. Property rates jumped 11.9% and household energy costs rose 9.1% – well above the 2.7% general inflation rate.
Hakes says that clients can often find these large numbers daunting, so they defer decision making until the last moment.

“That’s when clients and advisers say “I wish you had started sooner.” The key message is that the earlier people can start working with an adviser, the better financial position they’ll be in, and those big retirement numbers won’t be so daunting,” he told Good Returns.

“Year in and year out, the research highlights that relying on superannuation alone is not enough. Financial advisers can help calculate the savings that are needed, targets, and plans to reach it – and most importantly, how that adjusts over time as circumstances change.”

How far off-target are New Zealanders?

The report models a range of scenarios, and shows that someone who starts contributing to KiwiSaver in their 20s could still reach the ‘no frills’ target, even after a $75,000 withdrawal for a first-home deposit at age 35. However, those joining KiwiSaver in their 40s or 50s or who pause contributions for a few years have more of an uphill battle.

Hakes says that having a strategy is a starting point, but you also need to stick to the plan.

“Having the KiwiSaver is a good start, but there’s so much more to it,” he says.

“How it changes over time, whether you’re in the right fund, how the environment is impacting investment returns, etc. It’s so much deeper and broader than just “here’s the financial product.”

“We know through research that people with financial advisers are feeling more prepared and confident about retirement,” he adds. “One of the reasons we’ve signed the MOU with the retirement commission and the Sorted platform is to create a pathway from financial information to financial action.”

Bridging the advice gap

Household living costs are increasing, and KiwiSaver has seen record numbers of hardship withdrawals this year – $443.6 million, up by 51% on 2024. Hakes says that this is a concern for this industry, where withdrawals are seen as an absolute last resort.

Given the impact of a first-home deposit withdrawal, Kiwis can’t afford to take more out of their KiwiSavers early.

For advisers, there’s plenty of opportunity to educate, and a whole new generation moving towards the magical line of 65.

“Even millennials are well and truly in the workforce now,” Hakes says.

“If advisers who have been traditionally providing advice to clients who are just on either side of that 65, now is absolutely the time that intergenerational thinking needs to take place. That’s also about broadening the scope of advice, and that’s what adviser businesses should be thinking about – on a client level, a technical level, and on a business level.”

Morningstar plans to expand its coverage and research of KiwiSaver funds in New Zealand.

The company announced yesterday that it plans to research around a dozen KiwiSaver funds using its superannuation methodology – the Morningstar Medalist Ratings.

Its research methodology has three pillars: People, Process and Parent.

The Parent pillar– which assesses stewardship – will have a 25% weight on a KiwiSaver multi-sector strategy compared to 10% applied on a single sector strategy.

“Where applicable, we will also assess the leadership teams associated with the KiwiSaver schemes, particularly when they operate independently of the investment function,” Morningstar Director of Manager Research Ratings Matt Olsen said

Process will make up 50% and People 25%.

About 10 to 12 providers have been identified for potential coverage after initial discussions with a number of key players in the KiwiSaver market.

“It is our intention to engage with these providers, conduct thorough reviews, and publish research on their respective KiwiSaver schemes during the 2026 calendar year,” Olsen said.

Managers will not pay to be rated; rather Morningstar subscribers would pay to access the research.

“As a growth opportunity in New Zealand research coverage, Morningstar has identified an opportunity to roll out its superannuation methodology to cover KiwiSaver products,” Olsen says.

FMA chief executive Samantha Barrass unveiled the KiwiSaver Annual Report 2025 at the FSC Conference.

KiwiSaver has reached a milestone 18 years with funds under management hitting $123.1 billion. Barrass said that like any 18th birthday, there’s a lot to celebrate – but also a lot to think on for the future.

Total funds under management grew by 10.1% to $123.1 billion in the year to 31 March 2025. This was driven by a year-on-year increase of $12.2 billion in contributions and $6.4 billion in net investment returns. The number of KiwiSaver members has reached just under 3.4 million, up 1.5% on the same period last year.

KiwiSaver has also continued to support first home buyers, with nearly $1.8 billion withdrawn by 42,811 members for home purchases. While the number of withdrawals has declined from its 2021 peak, the total amount withdrawn reached its highest level, with average withdrawals now approaching $41,000.

Cumulatively, over $11 billion has been withdrawn for first home purchases since 2010.
Barrass said that there is “probably no other financial product that is so closely associated with the future financial wellbeing of New Zealanders” as KiwiSaver.

“What’s clear – and this is really good news – is that KiwiSaver remains resilient in the middle of economic volatility and uncertainty,” she said. “But there is room for improvement.”

Barrass noted that the number of non-contributing members is on the rise.

“It’s actually very high, with 30% of members of working age not contributing, and that’s up from 20% in 2010,” she explained.

“Even among the active choice members, there are 1.2 million who aren’t currently contributing. I don’t have to tell you about the long-term opportunity cost of foregoing retirement contributions.”

Barrass said that this may well be a reflection of the economic difficulties currently facing Kiwis – seen very tangibly via a noticeable uptick in hardship withdrawals, which reached $0.4 billion.

If this trend of non-contribution continues, she said there is a risk of “stark inequality” between members who contribute regularly and those who don’t.

Barrass added that default KiwiSaver providers also have an obligation to regularly engage with their members to ensure they are getting the most out of their participation in the scheme.

Currently, just under half of members are invested in growth funds, and diversified funds continue to comprise the majority of KiwiSaver assets.

“There is no simple fix,” Barrass said.

“All of us – politicians, policymakers, regulators, KiwiSaver providers and financial advisers – have a role here. That’s why we’re launching the report [at the FSC Conference] this year. All of us have some sort of say in the future of KiwiSaver.”

Consilium says it has seen a surge in advisers using its KiwiWRAP KiwiSaver scheme along with an increasing interest in personalised KiwiSaver advice from high-balance investors.

The KiwiWRAP scheme, available to advisers only, now has more than $200 million in funds under management.

"KiwiWRAP continues to attract investors with higher balances who are seeking tailored advice on their KiwiSaver investments. Over the past year, the number of KiwiWRAP accounts with balances exceeding $1million has nearly doubled, and the scheme’s average portfolio balance has increased from $174,000 to $188,000," the company says.

With more than 40 adviser firms nationwide offering the KiwiWRAP KiwiSaver Scheme, the market is signalling growing demand in an adviser-led KiwiSaver solution.

"Many financial advisers aren’t just recommending the scheme to their clients, they’ve invested their own KiwiSaver balances in it too."

Hamilton Hindin Greene financial adviser, Jeremy Simpson, says, “I’ve got a KiwiWRAP account myself. All our advisers have transferred their KiwiSaver to it.”

“It’s the best way to truly understand the scheme.”

That sentiment is echoed across the growing network of accredited adviser firms using the scheme to deliver better outcomes for clients, particularly those with significant balances and more personalised investment needs.

“This isn’t just a generic KiwiSaver scheme that advisers recommend, it’s one they have incorporated into their suite of advice solutions and are personally backing with their own retirement savings,” Consilium chief executive Louisa Yandle says.

“That speaks volumes about the confidence advisers have in KiwiWRAP’s flexibility, transparency and long term value as part of their business.”

With over 1,000 investors onboard, KiwiWRAP is carving out a niche in the market, giving advisers the tools to offer clients a KiwiSaver solution that aligns with their wider portfolio strategy.