New report warns first-home buyers to keep contributing post-purchase
Are first-home buyers who use their KiwiSaver to fund their deposit saving enough for retirement?
That’s one of the key questions raised in the latest Retirement Expenditure Guidelines 2025 from Massey University’s Fin-Ed Centre (Te Kunenga ki Pūrehuroa Massey University NZ Financial Education and Research Centre).
The report reveals that the average first-home buyer in New Zealand is now around age 35, and most are drawing heavily on their KiwiSaver savings to fund their deposit.
Early saving pays off
Modelling from the Fin-Ed Centre shows that someone who begins contributing to KiwiSaver in their early 20s – even after withdrawing around $75,000 for a first-home purchase at age 35 – could still build a lump sum sufficient for a modest retirement by age 65.
However, for those who delay joining KiwiSaver until their 40s or 50s, or who pause contributions for several years, the retirement gap widens sharply.
“A pivotal time” for retirement planning
Nick Hakes (pictured), chief executive of Financial Advice New Zealand, said “this year’s edition arrives at a pivotal time.”
“With the number of New Zealanders aged 65 and over projected to reach one million by 2028, the implications for personal finances, public policy, and intergenerational wellbeing are significant,” Hakes said.
He added that the data “empower advisers to deliver advice that is not only technically sound but deeply relevant to the lived experience of retirees.”
KiwiSaver’s dual purpose: Housing and retirement
Lead researcher Associate Professor Claire Matthews said KiwiSaver remains a cornerstone of financial wellbeing – but only if members treat it as a long-term commitment rather than an emergency fund.
“KiwiSaver can do two things, it helps people get on the property ladder, and then it sets them up for retirement,” Matthews said. “But that second part only happens if you keep contributing once you’ve bought your home, and ideally, slightly increase your contributions. The earlier you start, the more time compounding returns have to work for you.”
How much do retirees really need?
The 2025 Retirement Expenditure Guidelines estimate how much retirees need on top of New Zealand Superannuation (NZ Super) to maintain different standards of living:
- $181,000 for a one-person No Frills – Metro lifestyle
- $273,000 for a one-person Choices – Metro lifestyle
- $818,000 for a two-person No Frills – Metro lifestyle
- $1.033 million for a two-person Choices – Metro lifestyle
The higher “Choices” figure for two-person households reflects the wider gap between NZ Super payments and the cost of a comfortable lifestyle, where couples tend to have more discretionary spending and greater financial flexibility.
Rising costs squeeze retirees
The report notes that essential expenses – particularly food, energy, and council rates – continue to rise faster than general inflation, putting more pressure on retirees. Meanwhile, housing costs are emerging as a major concern, with falling home ownership rates and higher rental costs expected to impact future retirees.
“For most people, KiwiSaver shouldn’t end with the house purchase,” Matthews said. “Think of it as two chapters of the same story. First helping you buy your home, then helping you retire securely in it.”
A benchmark for financial advisers
Produced annually by Massey University’s Fin-Ed Centre in partnership with Financial Advice New Zealand, the Retirement Expenditure Guidelines are a key resource for financial advisers, policymakers, and individuals planning for retirement.
Stay informed with the latest housing market trends and mortgage insights – subscribe to our free daily newsletter.
