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.
KiwiSaver Drawdown Sustainability Table (New Zealand)
To help you plan, the table below shows estimated lifespans for different KiwiSaver balances at various target net incomes. These figures assume you withdraw your KiwiSaver at age 65, select single status, and exclude NZ Super. Calculations assume 5.0% investment growth, 2.5% inflation, and 0.5% annual fees (a net real return of 2.0%). In New Zealand, KiwiSaver withdrawals are completely tax-free.
| Target Net Income | $100,000 Pot | $200,000 Pot | $400,000 Pot | $600,000 Pot | $1,000,000 Pot |
|---|---|---|---|---|---|
| $10,000/yr | 10 yrs (age 75) | 24 yrs (age 89) | 40+ yrs (105+) | 40+ yrs (105+) | 40+ yrs (105+) |
| $15,000/yr | 7 yrs (age 72) | 15 yrs (age 80) | 36 yrs (age 101) | 40+ yrs (105+) | 40+ yrs (105+) |
| $25,000/yr | 4 yrs (age 69) | 8 yrs (age 73) | 18 yrs (age 83) | 31 yrs (age 96) | 40+ yrs (105+) |
| $35,000/yr | 2 yrs (age 67) | 5 yrs (age 70) | 12 yrs (age 77) | 20 yrs (age 85) | 40+ yrs (105+) |
| $50,000/yr | 2 yrs (age 67) | 4 yrs (age 69) | 8 yrs (age 73) | 13 yrs (age 78) | 24 yrs (age 89) |
| $75,000/yr | 1 yr (age 66) | 2 yrs (age 67) | 5 yrs (age 70) | 8 yrs (age 73) | 15 yrs (age 80) |
Case Study: Decumulating a $400,000 KiwiSaver Portfolio
Let's look at a case study of a retiree, Karen, who starts drawing income at age 65 with a KiwiSaver balance of $400,000. Her target net income is $25,000 a year (in today's money), rising with inflation.
Tax-Free KiwiSaver Withdrawals
In New Zealand, KiwiSaver is funded with after-tax money, meaning that all withdrawals upon reaching age 65 are completely tax-free. Karen can draw any amount without paying income tax or declaring it. To get $25,000 net, she makes a gross withdrawal of exactly $25,000.
NZ Super Offset
At age 65, Karen is also immediately eligible for NZ Superannuation, which pays $25,000 a year net of tax (single rate, M code). Because NZ Super completely covers her target net income, Karen does not need to draw anything from her KiwiSaver pot in standard years.
Understanding the New Zealand Retirement Tax Structure
New Zealand has a uniquely straightforward retirement tax framework centered around KiwiSaver and universal NZ Superannuation:
- 1. Tax-Free KiwiSaver (Age 65+): Withdrawals after age 65 are 100% tax-free because earnings are taxed internally as you go under the PIE regime.
- 2. PIE Regime & PIR Rates: Managed fund growth is pre-taxed based on your Prescribed Investor Rate (PIR) of 10.5%, 17.5%, or 28%, meaning no tax on withdrawal.
- 3. Universal NZ Superannuation: Paid from age 65 to all eligible residents regardless of assets or income. Paid net of PAYE income tax.
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. Figures are 2025–26 — check current rates on the Inland Revenue and Work and Income websites.