The hard truth: Your KiwiSaver will be $400,000 short of your Aussie mate's Super
Thursday, 20 November 2025
Tens of thousands of New Zealanders are heading across the Tasman to chase the promise of more money and better opportunities.
Of the 72,700 Kiwis who departed between September 2024 and September 2025, 58% (more than 42,000) made the relatively short flight to Australia.
Much of this is based on immediate concerns about the quality of life in New Zealand right now, versus what we believe to be available in Australia.
But what is less often considered is what our future retirement might look like in either of these two countries.
As insights firm TRA recently noted at an event, we tend to struggle to imagine ourselves in five, 10 or 20 years’ time.
“Our brains are not good at seeing ourselves in the future,” TRA head of strategy Colleen Ryan often says.
This is particularly tricky when it comes to factoring in the differences between the two retirement schemes, personal contribution rates and how our investments might compound over time.
Pension differences
The New Zealand retirement system is structured around NZ Superannuation, a universal entitlement to all Kiwis from the age of 65, and KiwiSaver, which is a voluntary contribution to your retirement savings. Once we hit retirement age, NZ Super will give a single person $538 per week and a couple living together $414 each.
The Australian system also has these two tiers, but they differ substantially in both entitlement and application. Australia’s pension, available to Australians 67 and older, is means-tested rather than universal, meaning that you only gain access to a full pension or part pension if you fall below a certain wealth threshold.
To get a full pension, your assets (excluding the family home) must fall below AU$321,500 ($370,000). If you don’t own a family home, the threshold sits at AU$579,000 ($665,000). If your assets come in above that threshold, your payment is reduced by $3 per fortnight for every $1,000 of assets you have above that lower limit. A full Australian pension will give a single person AU$589 ($677) per week and a couple AU$444 ($512) each.
Based entirely on the pension schemes, New Zealand is more generous in that it gives you access to the money earlier and regardless of how much independent wealth you might have. This feature means that from the age of 65, you could ostensibly have an income that amounts to roughly $28,000 per year for a single person or $43,000 for a couple (combined).
Data from the New Zealand Institute of Economic Research shows that income poverty (when your household income is below 50% of the median) is lower for people aged 65 and older than for the general population in both countries. The difference is much larger for New Zealand, implying that our Super scheme plays a greater role in reducing pensioner poverty.
The point here is that the generosity and simplicity of the NZ Super go a long way in providing a safety net for our ageing population, but there’s much more to this than just the pension aspect.
How much is a 12% contribution worth?
The far more significant difference lies in the retirement savings schemes attached to both systems.
KiwiSaver remains voluntary, with employers matching your contribution up to 3.5 per cent (from April next year) of your salary. In contrast, the Australian Super system has a mandatory scheme, requiring employers to contribute 12% of a worker’s annual salary regardless of whether they contribute or not.
The impact of this over the course of a working life is enormous.
If we were to compare an Australian and a New Zealander both earning $100,000 and contributing the minimum to qualify for the Government contributions (12% for the Australian, 6.5% combined total for the Kiwi), their investments placed in a growth fund growing at 8% per year would have the following trajectory:
After 10 years, the Kiwi would have $94,000; the Australian would have $174,000
After 15 years, the Kiwi would have $177,000; the Australian would have $327,000
After 20 years, the Kiwi would have $297,500; the Australian would have $549,271
After 25 years, the Kiwi would have $475,482; the Australian would have $878,000.
So, are Australians better off in Retirement?
“Most definitely yes,” Kōura Wealth founder Rupert Carlyon tells me.
“The current average balance of an Australian Super account is A$173,000 ($200,000). For a 65-year-old in Australia, the average balance is AU$420,000 (NZ$482,000). In New Zealand, KiwiSaver balances are materially smaller, with the current average at $37,000, while the average balance for those at 65 is $70,000.”
Put another way, there’s a $400,000 gap between what Australians and Kiwis have accrued in retirement savings by 65.
Carlyon says that means testing and compulsory contributions mean Australians are retiring much wealthier than their New Zealand counterparts.
The calculation above assumed that Australians would be contributing nothing over and above the 12% contribution they’d get from their employer, but the Australian system also employs tax incentives for residents to contribute additional savings – which means the gap between Australians and Kiwis could be even larger than the numbers indicate.
“Superannuation contributions are taxed at a significantly lower rate than normal income taxes,” says Carlyon.
“You’re creating support at the top of the cliff. You’re proactively encouraging people to save for their retirement, which means they will pass the asset test and will therefore not need to be supported by the state.”
Carlyon’s assessment is backed by the stats. The number of Australians receiving at least some state pension has dropped from 70% in 2012 to 56% this year.
The tax incentives do, however, come at a cost, with NZ Retirement Commissioner Jane Wrightson recently pointing out that if you add together the cost of those tax incentives with pension contributions, the overall cost comes in at a similar level as NZ Super to New Zealand (in terms of a percentage of GDP).
That might be the case right now, but there are some important trends to watch in the coming years.
The wealthier the country…
The cost of the NZ Super scheme sits at approximately 5% of total GDP, not dissimilar from the Australian system, which is at about 4.7%. The difference, however, is that the Australian system is projected to maintain that level or even drop, while the cost of the New Zealand system could rise to 7% of GDP by 2060.
“What’s really important about that is it means more money for hospitals, which are pretty important for a happier retirement,” says Simplicity founder Sam Stubbs.
“You need to think holistically about it. A richer country can afford more of what people need, especially in their golden years.”
Stubbs says that building wealth isn’t only important for individuals. It can also have significant macroeconomic impacts that affect the quality of life.
“Having that much saved means higher investment and smoother economic cycles. Australia has been in recession in just one of the last 26 years. Rich countries are inherently more resilient.”
The key takeaway here is that a good retirement in either New Zealand or Australia is largely contingent on how effectively you build your wealth over the long term. In Australia, those higher contributions might be mandated and provided over and above your salary, but there’s also an opportunity for you to increase how much you’re putting into KiwiSaver while working here.
As things stand, bridging the $400,000 gap (and the bragging rights that come with it) between us and Aussies depends entirely on how much we’re willing to put into KiwiSaver every pay cheque.
Correction: This article originally stated NZ Super gives a couple living together $828 each per week and that the Australian pension would give a couple AU$888 each. These were, in fact, the combined figures. This information has been updated.