Do you really need a million dollars to retire? This is what an expert had to say

Monday, 26 January 2026

A comfortable retirement looks different to different people.

Retirement questions Answered: from time to time, we will pick a question sent in by a reader and offer a response from contributor Gill South. You can read more here and submit questions below.

If those articles headlined “You need $1 million to retire,” send you into a black funk of despair, then this is a more reassuring kind of article you could read as an antidote.

With my plan to work until I’m 117, I just ignore these articles, but a reader did send a question on this, so let’s all face the fear together.

Our reader, I’m going to call her Tabitha, asks:

I get really confused about how much cash we should expect to have over and above the pension. I'm not planning on two overseas trips a year, I don't think. But I don't want to exist on tinned beans either. I've noticed from my own parents that their lives get quieter and cheaper as they age. Do you have any more realistic advice on how much money I'll actually need and how this will change over time?

Whenever I’ve interviewed financial advisers on this topic over the years, they’ve usually told me it’s okay to spend more in your early years of retirement because you have stuff you want to do, you’re in good health, so you hop on the next plane to see good friends and family overseas. When you’re in your 80s, you do tend to live more quietly and are just doing things more locally so you don’t need as much.

Te Ara Ahunga Ora Retirement Commission talks about the three stages of retirement. First you have the Discovery Stage (approximately 65 to 74 years), the doing years, they call these. Then there’s the Endeavour Stage (75 -84) where there’s a slowing down and consolidating. And finally, the Reflection Stage (85 plus), a time to reflect and manage needs. Don’t much like the sound of that last one.

Read more from Gill South:

So back to Tabitha’s query: “How much will I actually need for retirement?” Apparently this is a favourite question of David Boyle, the general manager for KiwiSaver at Fisher Funds, so I dropped it in his lap.

And, music to my ears, he tells me: “If you’re in your 50s and 60s, there’s no point in saying you need a million dollars to retire if that’s not just realistically achievable.”

Rather than, “What do I need to retire on,” the better and less frightening question is: “What am I realistically going to have, and how do I plan from here?”

I love that, it’s just sensible and not panic-inducing, isn’t it?

Boyle goes on: “I like to think about approaching retirement as you would an overseas trip – you wouldn’t head to the airport without knowing your destination, budget and what to do once you get there, would you?”

Of course not, that would be crazy. [Insert nervous laugh.]

Boyle notes that KiwiSaver only started 18 years ago, so for those in our 50s and 60s, we don’t have a particularly substantial golden nest egg. And I appreciate him acknowledging that.

A lot of people in my demographic, who are sorted, usually have something besides their paltry KiwiSaver – maybe an investment property or some funds under management if they’ve had an inheritance or windfall.

David Boyle, the general manager of KiwiSaver at Fisher Funds, says you need to work out where you’re going to understand what you’ll need.

Or they are planning to downsize their homes, and to get the funds invested pretty damn quick, which is my favoured route.

First steps for those of us not sorted

Boyle advises a first step is to think about how our income might change. A gradual retirement is increasingly common, working part time before taking full retirement, he says. Talking my language.

Then he says to think about other potential income and assets: savings and investments, other potential contributions, inheritances. That could be a short think for some of us.

Meanwhile to figure out what your retirement income might be, David suggests playing around with some “rules of thumb.”

There’s the “6% rule”: you withdraw 6% of your initial retirement savings every year.

Then there’s the “Inflated 4% rule,” which has a 4% withdrawal in year one, and adjusted annually for inflation thereafter. (not sure if that is going to pay my Wellington rates quite frankly).

Alternatively, you can look at the Life Expectancy Rule, he says, and base withdrawals on the number of years you need the money to last. That sounds like a lottery to me.

Boyle recommends the Retirement Commission’s Retirement Navigator to help make all these scenarios easy to model.

He then asks us to think about the lifestyle we want and the kinds of activities we’d like to do in retirement.

Then figure out the gap in what you are going to have and the lifestyle you want and what you can do to close the gap, starting from today, Boyle says with energy.

Think about increasing your contribution rates to your KiwiSaver, and still be in a growth fund if there’s five or seven years more to go, he suggests.

If in doubt, it’s always best to have a chat with a financial adviser, Boyle recommends, to sort out specific goals and options. This will give you an objective oversight of where you are financially and what you need to do to make your money go the distance.

I hope that helps, Tabitha.

*Disclaimer: The information in this article is of a general nature and is not intended to be personalised financial advice. The names of the individuals in this story have been changed to protect their privacy.

If you have a question you’d like answered, drop it in the document below. The more detail you provide (please don’t include personal banking information), the more likely it is that we’ll look into answering it.

Gill South is a freelance business writer who has authored a book on personal finance and written for many major publications in New Zealand.