Are you on track for retirement? Understanding your KiwiSaver balance by age is one of the simplest ways to see whether you're building enough wealth for later in life. While KiwiSaver balances continue to grow, many New Zealanders are still retiring with far less than they need.
How Are New Zealanders Tracking?
The latest figures show that the average KiwiSaver balance has increased from around $37,000 to $41,000 over the past 12 months, with average balances rising by approximately $8,000. More than 90% of New Zealanders earning over $50,000 are now contributing to KiwiSaver, which is encouraging.
James points out that while KiwiSaver balances are heading in the right direction, they’re still a long way from where they need to be. He notes that the average New Zealander retires with around $120,000, about half of which comes from KiwiSaver, and says that’s unlikely to be enough, especially as more people enter retirement still paying off a mortgage.
Looking at KiwiSaver balance by age, the averages are:
- 18–25 years: Around $10,000
- 31–35 years: Around $26,000
- 41–45 years: Around $43,000
- 51–55 years: Around $65,000
These figures are useful as a guide, but they don’t tell the whole story. If the average New Zealander isn’t saving enough for retirement, aiming for the average probably isn’t the right goal either. Focus on building enough savings to support the lifestyle you want in retirement.
Why This Doesn't Tell The Whole Story
KiwiSaver balances can look very different depending on your situation.
For example, many younger New Zealanders have already used part of their KiwiSaver for a first home deposit and are now in the process of rebuilding their savings. Older generations, on the other hand, simply haven’t had as many years contributing compared to younger workers who have been enrolled for much longer.
Mike and James also point out that some groups are more likely to fall behind over time.
The KiwiSaver gender gap
One of the more surprising findings is the gap between men’s and women’s KiwiSaver balances.
Men’s balances are already around 21% higher than women’s between the ages of 18 and 25. While career breaks later in life may explain some of this difference, the fact that the gap begins so early is surprising.
Over decades, investment returns compound this difference even further, potentially growing to around a 35% gap by retirement.
Self-employed New Zealanders
Self-employed people often miss out on retirement savings.
Many choose not to contribute because they don’t receive employer contributions and would rather keep their money accessible for their business. However, relying solely on selling a business to fund retirement can become risky, particularly during economic downturns when business buyers become scarce or valuations fall.
Small Decisions Can Make A Big Difference
Rather than getting too caught up in your current balance, Mike and James suggest focusing on the things you can actually control.
One of the biggest levers is your contribution rate.
For some people, sticking with the minimum to get the full employer contribution makes sense. For others, putting in a bit more can help build momentum over time, especially if it becomes a consistent habit.
They also talk about choosing a fund that suits where you’re at in life.
If retirement is still a long way off, they point out that growth-focused funds can make sense, even though they’ll go up and down more in the short term. As they put it, there’s always some level of risk involved — whether you make a change or leave things as they are.
Fund Performance Matters
There can be a surprisingly wide gap between KiwiSaver providers.
Over the past five years, the top-performing growth fund delivered annual returns of around 11.2%, while the lowest-performing option returned closer to 3.5% per year.
Over time, those differences can add up to tens or even hundreds of thousands of dollars by the time you retire.
Instead of leaving your KiwiSaver untouched, it’s worth checking in regularly to make sure your fund still suits your goals and stage of life.
Retirement Is Bigger Than KiwiSaver Alone
While KiwiSaver plays an important role, it’s unlikely to cover everything you’ll need in retirement on its own.
For a couple aiming for an average retirement lifestyle, around $90,000 per year is often used as a guide. After factoring in New Zealand Superannuation, that means building up roughly $1.8 million in savings.
For younger New Zealanders, KiwiSaver can still do a lot of the heavy lifting over time, which makes early decisions around contributions and fund selection especially important.
Key Takeaways
- KiwiSaver balances increased by around $8,000 on average over the past year.
- The average KiwiSaver balance is now approximately $41,000.
- Many New Zealanders are still retiring with savings well below what may be required for a comfortable retirement.
- Average KiwiSaver balances vary significantly by age and personal circumstances.
- A gender gap in KiwiSaver balances begins much earlier than many people realise.
- Self-employed people are often at greater risk of under-saving for retirement.
- Your contribution rate and fund choice can have a significant long-term impact.
- Differences in fund performance can compound into substantial differences at retirement.
- Regularly reviewing your KiwiSaver is one of the most important financial decisions you can make.
Next Steps
If you’d like help reviewing your KiwiSaver fund, contribution rate or retirement strategy, the Lighthouse KiwiSaver team can help you understand whether you’re on track and whether your current KiwiSaver settings align with your long-term goals.
If you’d like to watch more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
