As of 1 April 2021, New Zealand Superannuation has a new weekly rate for individuals: $437 (after-tax).

Depending on how far off retirement you are, this number may not mean much to you. But the reality is, NZ Super rates can give you an idea of what you’ll have, and what you’ll need to put aside on top of that, to achieve your dream retirement lifestyle.

So here are some key things to know, according to our SHARE financial advisers.

How does NZ Super work?

NZ Super is the government pension paid to eligible New Zealanders over the age of 65. To qualify, you must be a New Zealand resident, and have lived here for 10 years since age 20, five of which since you turned 50 (click here to learn more).

It’s also important to know that:

• You can get NZ Super even if you’re still working.
• If you receive a pension from overseas, your NZ Super payments may be reduced by that amount.

It’s one of the world’s most generous pensions

In New Zealand, we’re fortunate to be able to rely (at least, in part) on NZ Super. Globally, it’s one of the few pension schemes that is given to everyone who meets the residency requirements, and it’s not means- or income-tested.

While many pension schemes in other countries are based on compulsory contributions from wages and employers, NZ Super is a universal, non-contributory public pension scheme, whose amount is set by the Government each year.

With an ageing population, the long-term sustainability of the scheme ‘as is’ is a matter of debate, but according to treasury projections, the cost of NZ Super should be sustainable for at least the next 30 years.

What can NZ Super buy you?

A few hundred dollars per week may not seem a lot, but if you multiply the current weekly rates for 30 years of retirement, you can get an idea of how much NZ Super is worth.

A single retiree living alone, getting $437 after-tax each week, will receive approximately $22,000 every year, or $681,000 over 30 years. A couple where both partners qualify is entitled to receive $672 per week, which amounts to about $35,000 per year, or 1 million over 30 years.

This is money you don’t need to save, and when planning for retirement, every dollar counts. However, it’s also unlikely to be enough for a comfortable retirement, and in some cases, even for a more modest lifestyle. And this is where retirement planning can make all the difference.

How we can help you fill the ‘pension gap’

If you think about your retirement years, what comes to your mind? It could be a bit of travelling, a hobby you’ve always wanted to explore but never had the time, or some quality time spent with the family.

Figuring out your ‘retirement number’ depends on many factors, including the age you’re looking to retire at. With careful planning, saving and investing can help you reach those goals, by filling the gap between what you’ll need and what you’re on track to have. And remember, the earlier you start working towards your post-work life, the more opportunities you’ll have to accumulate wealth along the way.

Like to get started? Talking with a SHARE adviser can help you determine how much you’ll need saved, and devise and implement a financial plan that’s appropriate for your needs and goals. They’ll also be in your corner every step of the way, to help you stay on track. Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.