Liv Lewis-Long on how planning for retirement should start decades before the age of 65.

We often think of “retirement readiness” as something you sort in your 60s, or maybe in your mid-50s at a push.

But your path to a stress-free, financially secure retirement really needs to start much earlier. That old saying “time in the market over timing the market” really does hold true. Your strategy should also evolve with you over time: whether you’re just starting to build a financial foundation, fine-tuning your investments, or mapping out how to spend what you’ve saved, there are some meaningful steps you can take to optimise your path.

Your financial situation – and your mindset around retirement – will naturally shift throughout life. But these things are also shaped by your individual experiences, responsibilities and circumstances so there’s no one-size-fits-all formula for being retirement ready.

You can consider the following a broad framework: a set of general principles that can help guide your thinking through the decades.

The age bands aren’t rigid; you might find elements from each stage relevant at different times.

20s and 30s

Early in your career, retirement can feel abstract – almost impossible to imagine. But the earlier you start, the more you benefit from the exponential magic of compounding returns.

At this stage, a good goal is to build solid financial habits that become automatic.

• Create a budget that works for you (that you can stick to).
• Build up a rainy-day fund, to avoid high-interest debt in the case of costly emergencies.
• Pay off any high-interest debt (car loans, personal loans, buy-now-pay-later debt).
• Join KiwiSaver and ensure you’re getting maximum employer and/or government contributions that you’re eligible for.
• Start investing early – small, regular amounts can have bigger impacts than you’d think.
• Choose a KiwiSaver or investment fund that matches your timeframe and risk appetite – often the longer time horizon allows for a higher risk tolerance.

Starting early doesn’t require a perfect plan – just consistency, and a little discipline. A few (or a few hundred) dollars invested in your 20s can do more work than a much larger sum added later in life. Time truly is your greatest asset.

In your 40s

Your 40s is often a decade that comes with extra financial pressures, but also more income. Mortgages, kids, career ladders or plateaus, and the general cost of life can all add extra financial stress and complexity. But it’s also when your investment base – if you established some good financial habits in your 20s and 30s – starts to snowball. Often the choices you make here can make a significant difference to your future retirement lifestyle. Your late 30s and 40s are a good time to do the following.

• Review your KiwiSaver and any other funds you’re invested in: are your fund types still aligned with your goals and risk appetite?
• Remember you still have decades until you’ll need to withdraw any investments – there’s still time to be more aggressive.
• Alongside increasing income, increase investment contributions if possible; even a small step-up now can translate to thousands more later.
• Start using retirement calculators (try sorted.org.nz) to estimate how much you’ll need, and check whether you’re on track.

The midlife juggle is real, but this is the phase where you want to stay engaged and avoid the temptation to take your foot off the gas. Think of it as financial maintenance that has a long-term payoff.

In your 50s

While it’s still realistic to continue accumulating here, now is the time to also start planning in earnest. Retirement is no longer a distant concept, it’s visible on the horizon. That makes it a good time to get real about your retirement numbers, and ask some questions.

• What kind of lifestyle do I want in retirement, and (realistically!) how much could that cost?
• Is there a gap between what I’ll need, and what I currently have saved/invested?
• When do I actually want to retire? Will I stop working completely, or phase into it with part-time work?
• Would I benefit from some personalised financial advice to plan for the next 10-15 years?
• Can I afford to accelerate my investing now, rather than letting lifestyle creep, creep?

At this point, most will be earning more than earlier in life, so now’s your chance to plug any gaps you see looming. You could also now consider downsizing, reallocating investments across your portfolio, or consider the longevity of any debt you hold, all with retirement calculations in mind. Massey University’s NZ Retirement Expenditure Guidelines can be a helpful resource for working out what retirement actually costs (based on current retirement data), and how much you’ll need to fund your choices.

60s and 70s

As retirement becomes imminent or begins, the focus shifts from saving to spending. That doesn’t mean you can relax just yet! Managing your money in retirement can be more complex than it seems (we hear it from our investors all the time), so it’s important to have a clear strategy.

Some key things to consider:

• understand your KiwiSaver withdrawal options and NZ Super eligibility (that doesn’t mean you need to immediately take up either option!)
• make a plan for required income: will you draw down from KiwiSaver gradually, supplement with continued or part-time work, or rely on income from other investments?
• work on your decumulation strategy – how you’ll turn your lump sum into a sustainable income stream
• explore and understand the “retirement buckets” theory to manage liquidity, income needs and inflation risk over time

There are some simple rules of thumb, which can help you pace your spending. These include the classic 4 per cent rule (inflation adjusted), a 6 per cent front-loaded model, or spending based on life expectancy. Longevity is an important consideration: most people in their early 60s should plan for a retirement that could last 25-plus years. Outliving your savings is a real risk, so ensuring that your money remains invested appropriately and is withdrawn wisely is crucial.

Across the ages

No matter your age, understanding how KiwiSaver fits into your broader retirement plan is essential. But perhaps even more importantly: don’t assume KiwiSaver plus Superannuation will be enough. For most people, KiwiSaver is a crucial foundation, but not the full picture.

Supplementing this with additional funds, property, or alternative investments may be needed to fund the retirement lifestyle you want.

Being retirement ready isn’t just about hitting a number at 65. It’s about building confidence at every stage of life. Knowing what’s ahead, taking action where you can, and making the most of resources and tools can set you up for success. Wherever you are on the journey, the most important thing you can do is stay engaged. Review your progress regularly. Get help if you need, adjust as necessary.

Wherever you are on the journey, it’s never too early – or too late – to take that next step toward the future you want.

Liv Lewis-Long is the head of marketing at Simplicity.

This editorial is Liv Lewis-Long’s independent commentary and thought leadership on personal finance-related topics. This content is opinion-based and is provided for general information only. It does not relate to your particular financial situation or goals and is not financial advice or recommendations.