Retirement Income Gap Calculator NZ 2026/27
This retirement income gap calculator shows the actual dollar gap between the annual income you want in retirement and the income NZ Superannuation plus your own savings are realistically likely to deliver. Rather than working out an abstract savings target from nothing, it starts from where you already stand: your target retirement income in today's dollars, the NZ Super you expect for your living situation, and the savings or KiwiSaver balance you expect to have by the time you stop full-time work. From that balance, it applies a safe withdrawal rate, the percentage you plan to draw down each year, to work out the annual income your savings can sustainably provide. Adding that drawdown to NZ Super and subtracting the total from your target income leaves the annual gap, shown per year and per week so it is easy to picture in everyday budgeting terms. Where the numbers already cover your target, it shows a surplus instead. It also converts any gap into the extra lump sum needed today to close it completely at your chosen withdrawal rate, a figure you can compare against your current contribution rate. This is built for anyone with a rough idea of their likely retirement balance who wants an honest, current-dollar answer rather than a guess, whether you are decades away and stress-testing a plan or close to retirement and want a real number to act on now.
Safe withdrawal rate: a general retirement-planning rule of thumb, not an NZ statutory figure. The default of 4% traces to William Bengen's 1994 research and the 1998 Trinity study. Adjustable in this calculator; treat any single rate as indicative, not a guarantee against running out of money.
Method: Annual drawdown = savings balance × withdrawal rate. Total retirement income = NZ Super + annual drawdown. Annual income gap = target income − total retirement income. Extra savings needed = gap ÷ withdrawal rate. Figures are in today's dollars and are pre-tax estimates.
Last verified: July 2026, against Work and Income NZ Superannuation rates.
Annual drawdown = savings balance × withdrawal rate. Annual gap = target income − NZ Super − drawdown. A planning estimate in today's dollars, before tax. It does not model investment volatility, sequence-of-return risk, or how many years the balance itself needs to last at that drawdown rate.
How this calculator works
This calculator answers a more concrete question than "how much do I need to save": it asks whether the plan you actually have, a target income, an expected NZ Super entitlement and a savings balance, adds up to enough income once you get there. It starts by turning your savings or KiwiSaver balance into an annual income figure, multiplying the balance by the safe withdrawal rate you choose. That drawdown is added to the NZ Super amount for your selected living situation to give your total expected retirement income. Subtracting that total from your target annual income leaves the gap, the amount your current plan falls short by each year, which is also shown as a weekly figure since most household budgeting happens week to week. Where your NZ Super and drawdown already add up to your target or more, the calculator shows a surplus instead of a gap, and where there is a genuine shortfall, it converts that annual gap back into a lump sum, dividing the gap by your withdrawal rate to show the extra amount you would need saved today, on top of the balance you already entered, to close it completely at that same withdrawal rate.
Where the NZ Super figures come from
The NZ Super amounts used are the current net, after-tax rates on the standard M tax code, effective from 1 April 2026, as published by Work and Income: $28,867.80 a year for someone living alone, $26,647.40 a year for someone sharing a home with others who are not a partner, and $44,412.16 a year combined for a couple where both partners qualify. These are the same figures used across our other retirement tools, including the Retirement Number Calculator and the standalone NZ Super Rate Calculator, so results are consistent whichever tool you use. NZ Super is reviewed and can change each April in line with wage growth, and it is not means tested, so it is paid on top of whatever income your own savings provide rather than being reduced by them. If you plan to retire before you qualify for NZ Super at 65, select None so the calculator compares your target income against your savings drawdown alone.
Choosing a safe withdrawal rate for your drawdown
The withdrawal rate you choose has a large effect on both your annual drawdown and the extra lump sum needed to close any gap, because it appears on both sides of the calculation. A commonly cited starting point is 4% a year, based on research by American financial planner William Bengen in 1994 and reinforced by the 1998 Trinity study, both of which tested historical market returns over roughly 30-year retirements. It is a widely used rule of thumb, not a New Zealand government figure and not a guarantee, and many planners now discuss a range of roughly 3% to 5% depending on how long the money needs to last, how it is invested, and how much certainty you want. A lower, more cautious rate produces a smaller annual drawdown from the same balance, which widens the income gap and increases the extra lump sum shown as needed, while a higher rate does the opposite. It is worth trying more than one rate to see how sensitive your own result is.
Worked example
Take someone targeting $65,000 a year in retirement, in today's dollars, who expects to qualify for NZ Super as a single person living alone, currently $28,867.80 a year after tax. They expect to have $400,000 saved in KiwiSaver and other savings by the time they retire, and plan to draw that down at 4% a year, which is $16,000 a year. Adding NZ Super and the drawdown together gives a total expected retirement income of $44,867.80, against a $65,000 target, leaving an annual gap of $20,132.20, or $387.16 a week. Dividing that gap by the 4% withdrawal rate shows they would need an extra $503,305 saved on top of their expected $400,000 balance to close the gap completely at the same withdrawal rate, for a total nest egg of $903,305. That total matches the figure produced by our Retirement Number Calculator for the same $65,000 target and NZ Super situation with no existing balance assumed, which is a useful cross-check: this calculator is simply that same total nest egg, minus the balance you already expect to have, expressed as the extra amount still needed.
If there's no gap, a surplus instead
Not every result is a shortfall. If the NZ Super and drawdown for your situation already meet or beat your target income, the calculator shows a surplus rather than a gap, and the extra savings needed to close it drops to $0. That is a genuinely useful result: it suggests your current plan is, on paper, already sufficient to fund your target income at the withdrawal rate you selected, and any spare capacity could go towards a higher target income, an earlier retirement date, a more cautious withdrawal rate for extra safety margin, or simply other financial goals such as paying down debt.
What this calculator assumes
- All figures are in today's dollars and are not separately adjusted for inflation. If retirement is many years away, both your target income and your expected balance may look different again in future dollars.
- The savings balance is treated as a single figure available at retirement; the calculator does not project a current balance forward using contributions and investment growth. Use the KiwiSaver Retirement Projection Calculator first if you want to estimate that figure from your current balance and contribution rate.
- The withdrawal rate is applied as a constant annual percentage of the balance, without modelling market volatility, sequence-of-return risk, or a fixed number of years the balance itself needs to last.
- NZ Super figures are the current net, after-tax rates on the standard M tax code from 1 April 2026, for the living situation you select, and are reviewed and can change each April.
- Results are shown before tax on any investment income drawn from savings, which in practice may be taxed, for example at your prescribed investor rate inside a KiwiSaver or other PIE fund.
Who this calculator is for
This is for anyone who already has a rough idea of the savings balance they expect at retirement, whether that is a current KiwiSaver balance for someone close to retiring or a projected future balance for someone still years away, and wants an honest answer to whether that balance, combined with NZ Super, actually funds the lifestyle they want. It suits people within 10 to 15 years of retirement wanting a concrete number to act on now, and it works equally well as a stress test for someone decades away who wants to see how a lower target income, a different withdrawal rate, or a larger balance changes the picture. If you have not yet worked out a likely balance at retirement, start with our KiwiSaver Retirement Projection Calculator, then bring the projected figure back here.
Related calculators
- Retirement Number Calculator: work out the total nest egg needed for a target income and NZ Super, with no existing balance assumed.
- Retirement Savings Shortfall Calculator: project your KiwiSaver balance forward and find the extra monthly contribution needed to close a gap.
- KiwiSaver Retirement Projection Calculator: project your current balance and contributions forward to retirement age.
- NZ Super Rate Calculator: check the current fortnightly, weekly and annual NZ Super rate for your living situation.
- Partial / Semi-Retirement Calculator: see how part-time income in early retirement can close an income gap.
Official NZ sources
This calculator is built from primary New Zealand sources. Always confirm current figures against the official source for your situation:
- Work and Income: NZ Superannuation, eligibility and current payment rates
- Sorted (Te Ara Ahunga Ora, Retirement Commission): retirement planning tools and guidance
- Inland Revenue (IRD): KiwiSaver and prescribed investor rates