New Zealand does not actually have an official retirement age. Nevertheless, many people aim to retire when they are 65 years old.
Sixtyfive is the age when most superannuation plans, including Government-funded New Zealand Superannuation (NZ Super), begin to pay out your savings.
NZ Super is a fortnightly payment for people aged 65 and over. To qualify, you must have:
- lived in New Zealand for at least 10 years after you turned 20
- spent five of those 10 years living here after you turned 50.
If you spent time living overseas, it may be counted if you were living in certain countries, including Australia, and for certain reasons.
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 of NZ Super you receive.
Work and Income 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 Work and Income from within New Zealand on 0800 552 002.
Tax on overseas pensions
In most cases, you will need to pay New Zealand income tax on an overseas pension. The government's 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 pension 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 Super 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 are 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 are 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 are buying your first home.
The government website sorted.org.nz has information about KiwiSaver. It includes a KiwiSaver savings calculator, information on choosing a fund to invest your savings with, and information on where to get more help.