New Zealand doesn’t actually have an official retirement age. Nevertheless, for many people 65 years old is the target.
It’s the age when most superannuation plans begin to pay out your savings, including Government funded NZ Superannuation (Super).
New Zealand Superannuation is a fortnightly payment for people aged 65 and over. To qualify, you must have lived in New Zealand for at least 10 years since you turned 20. Five of those years must be since you turned 50. Time spent overseas in certain countries, including Australia and for certain reasons may be counted.
Details about who can get superannuation are on the Government’s Work and Income website.
If you get a pension from another country, it will affect the amount you receive in New Zealand Super.
The Work and Income department has information and people who can help you work out what overseas state social security benefits or pensions you may be entitled to, and how you can have it paid.
You can contact the Work and Income department from within New Zealand by phoning 0800 552 002.
Tax on overseas pensions
In most cases, you’ll need to pay New Zealand income tax on an overseas pension. The Inland Revenue department has information.
Tax on overseas pensions is complex. As well as paying tax on the income you receive you may also have to pay tax on gains made by the overseas fund providing the pension.
You should seek financial advice.
Overseas social security pensions | Inland Revenue (PDF - 111 KB)
Transferring pensions to New Zealand
Pensions in some countries, particularly in the UK, Australia and South Africa, may be transferable to New Zealand. Navigating the New Zealand tax rules, and the rules of overseas pensions providers, is complex. Start by checking Inland Revenue’s website.
The personal finance website interest.co.nz has an article with more background.
Saving for retirement – KiwiSaver
While NZ Superannuation will provide enough for a basic standard of living in retirement, many Kiwis are also into DIY (Do It Yourself) retirement saving.
To encourage that, the government offers workers in New Zealand ‘Kiwisaver’.
KiwiSaver is a voluntary work-based savings scheme. If you ‘opt in’, then a small amount of your salary is deducted every payday and put aside in a KiwiSaver investment scheme. Your employer has to contribute an amount equal to at least 3% of your gross wage.
KiwiSaver is for citizens or residents who are living or normally living in New Zealand. If you’re working in New Zealand on a temporary work visa, you should tell your employer you want to ‘opt out’ of Kiwisaver.
KiwiSaver is also available for self employed people, although of course there are no employer contributions.
The money that builds up is invested for you by approved ‘Kiwisaver providers’ until you’re eligible for NZ Super at age 65.
You can access the money earlier in certain circumstances - for example, if you become seriously ill or have financial hardship, or if you’re buying your first home.
The Government’s Commission for Financial Capability has a website with full information. It includes a KiwiSaver savings calculator, information on choosing a fund to invest your savings with, and information where to get more help.