Is KiwiSaver Enough After Buying A First Home?

Are first home buyers who use their KiwiSaver to fund their deposit, saving enough for their retirement?

That is one of the key questions addressed in the latest Retirement Expenditure Guidelines from Te Kunenga ki Pūrehuroa Massey University’s NZ Financial-Education and Research Centre (Fin-Ed Centre).

The average age of first-home buyers in New Zealand is now around 35 and most are drawing heavily on their KiwiSaver to fund their deposit.

The 2025 report models a range of scenarios showing that someone who begins contributing to KiwiSaver from their early 20s, even after withdrawing around $75,000 for a first-home purchase at age 35, could still reach the lump sum needed to fund a modest retirement by age 65. But for those who delay joining KiwiSaver until their 40s or 50s, or who pause contributions for several years, the gap between savings and retirement needs gets much harder to close.

Nick Hakes, Chief Executive of Financial Advice New Zealand says “this year’s edition arrives at a pivotal time. With the number of New Zealanders aged 65 and over projected to reach one million by 2028, the implications for personal finances, public policy, and intergenerational wellbeing are significant. The data and insights in this report empower advisers to deliver advice that is not only technically sound but deeply relevant to the lived experience of retirees.

Associate Professor Claire Matthews, who leads the research, says KiwiSaver remains a cornerstone of financial wellbeing for New Zealanders, but only if people continue to treat it as a long-term commitment and not use it as an emergency fund.

“KiwiSaver can do two things, it helps people get on the property ladder, and then it sets them up for retirement. But that second part only happens if you keep contributing once you’ve bought your home, and ideally, slightly increase your contributions. The earlier you start, the more time compounding returns have to work for you.”

The Retirement Expenditure Guidelines estimate how much retirees need on top of New Zealand Superannuation (NZ Super) to maintain different standards of living. For 2025, those figures are:

• $181,000 for a one-person “No Frills – Metro” lifestyle
• $273,000 for a one-person “Choices – Metro” lifestyle
• $118,000 for a two-person “No Frills – Metro” lifestyle
• $1.033 million for a two-person “Choices – Metro” lifestyle

While the “Choices” figure for two-person households may seem disproportionately high, the report explains that it reflects the wider gap between NZ Super payments and the cost of a comfortable lifestyle for two. While couples do share some household expenses, the “Choices” lifestyle involves a greater proportion of discretionary costs, reflecting an ability to pool financial resources resulting in more disposable income.

The report also highlights that rising costs for essentials like food, energy, and local council rates continue to outpace inflation, increasing the pressure on retirees. Housing is also a growing concern, as younger generations face lower rates of home ownership and higher rental costs in retirement.

“For most people, KiwiSaver shouldn’t end with the house purchase. Think of it as two chapters of the same story. First helping you buy your home, then helping you retire securely in it.”

The Retirement Expenditure Guidelines are produced annually by the Fin-Ed Centre — a partnership between Massey University and Financial Advice New Zealand, and is widely used by financial advisers, policymakers, and individuals as a benchmark for retirement planning.

About Financial Advice New Zealand: Financial Advice New Zealand is the largest financial adviser-representative professional body for Financial Advisers and Financial Advice Providers (FAPs) in New Zealand. Our members provide trusted advice to consumers across financial planning and investments, mortgages and lending, and life, disability & health insurance, which ultimately helps Kiwis grow, manage, and protect their wealth.

Today, Financial Advice New Zealand is a vibrant, innovative association, where the underlying driver of policy is that great advice transforms lives. We promote the highest professional standards for financial advice, so more New Zealanders have the confidence to actively seek quality financial advice to improve their financial health, wealth, and well-being.

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