The amount you need will depend on how much income you want during your retirement years and the number of years you'll be relying on your own funds. The higher the income you want, and the longer you'll need it, the more money you'll have to save before retirement.
If you're a man planning to retire at 60, you should budget for your retirement funds to last for at least 20 years. A woman should budget for even longer.
Other things to consider include:
- the age at which you're planning to retire – the earlier you plan to retire, the longer your funds will need to last
- whether your home and any other large debts will be paid off by the time you retire
- what you want to do in your retirement (e.g. travel, pursue a hobby) and how much these things will cost
- whether you want to work on a part-time or casual basis in retirement
- what expenses you'll have in retirement (e.g. a new car, house repairs) and how much you'll need for expected and unexpected expenses.
Will your retirement savings last long enough?
How long savings will last depends on the return the investment is earning and how much you draw down.
Imagine you have retired at 65 with $500,000 and wish to draw down $50,000 a year to live.
The chart below highlights the importance of making sure you have enough money to last through your retirement, as well as making sure that it's invested effectively to deliver strong returns over time.
- The blue line shows if your savings aren't working for you, you'll have nothing by the age of 75.
- The green line shows if your savings are earning 4%, your money will run out when you reach 78.
- The red line shows if your savings are earning 8%, your retirement savings will last until you reach 83.
For more information or to arrange an appointment with an ANZ Investment Specialist:
A copy of the Bank's General Disclosure Statement under the Reserve Bank of New Zealand Act 1989 is available on this website or on request from any ANZ branch, free of charge. A copy of your ANZ Investment Specialist Authorised Financial Adviser’s Disclosure Statement prepared under the Financial Advisers Act 2008 are available on request and free of charge by contacting your ANZ Investment Specialist Authorised Financial Adviser.