KiwiSaver and NZ Super: the two layers of retirement
New Zealand's retirement income has two layers. NZ Super is a universal, non-means-tested government pension paid from age 65 (provided you meet the residency requirements). It's a flat rate — your savings or income don't affect it. KiwiSaver is your personal retirement pot, which you can withdraw at 65 (or after 5 years of membership if you joined after 60). Withdrawals are completely tax-free.
How retirement income is taxed
NZ Super is paid through PAYE — it's fully taxable income at standard brackets (10.5% to $15,600; 17.5% to $53,500; 30% to $78,100; 33% to $180,000; 39% above). New Zealand has no tax-free threshold, so tax starts on the first dollar. Most super recipients use the M tax code if NZ Super is their primary income. KiwiSaver withdrawals are not taxed at withdrawal — returns are pre-taxed inside the fund via the PIE regime at your Prescribed Investor Rate (10.5%, 17.5% or 28%).
Sustainable drawdown
A common starting point is the "4% rule" from US research — drawing 4% of your balance in year one, then inflation-adjusting. With NZ Super as a strong base layer (around NZ$29,340/year net for a single retiree), KiwiSaver typically tops this up rather than carrying the full load. There's no minimum drawdown requirement; you decide how much and when.
The Direct Deduction Policy
If you receive an overseas government pension (UK State Pension, Australian Age Pension, US Social Security in some cases), it is generally deducted dollar-for-dollar from your NZ Super. This catches many returning New Zealanders by surprise. Private overseas pensions (employer schemes, personal savings) are not deducted but remain taxable income in New Zealand.
Frequently asked questions
How long will NZ$500,000 in KiwiSaver last?
It depends on your spending, returns and how NZ Super contributes. NZ Super alone covers about NZ$29,340/year for a single retiree (2025–26) before any KiwiSaver drawdown. Use the planner above to see how long a top-up from KiwiSaver sustains your target lifestyle.
Is NZ Super means-tested?
No. NZ Super is universal — your savings, KiwiSaver balance and other income do not affect your entitlement. You qualify at age 65 if you meet the residency requirements (currently 10 years since age 20, with at least 5 since age 50; rising to 20 years by 2042).
Are KiwiSaver withdrawals taxed?
No. Withdrawals at age 65 (or after 5 years of KiwiSaver membership if you joined after 60) are completely tax-free. Investment returns are taxed inside the fund as a PIE at your Prescribed Investor Rate, capped at 28%.
Can I defer NZ Super for a higher rate?
No — unlike the UK or US, New Zealand does not let you defer NZ Super in exchange for a higher rate. You should apply at 65 (up to 12 weeks before) to avoid losing entitlement. If you receive an overseas government pension, NZ Super is reduced dollar-for-dollar under the Direct Deduction Policy.
Assumptions & methodology
The model runs your savings year by year to your plan-to age. Each year the target net income rises with inflation; NZ Super (if included) is uplifted the same way, as a proxy for the annual general adjustment (which uses CPI with a net-average-wage floor). KiwiSaver withdrawals are treated as tax-free; NZ Super and any other income use 2025–26 PAYE brackets. We do not model the ACC earner's levy (which doesn't apply to NZ Super), the Independent Earner Tax Credit, or KiwiSaver employer contributions if you continue working past 65. Figures are 2025–26 — check current rates on the Inland Revenue and Work and Income websites.