Retiring early—what a dream! It’s a life where you get to live on your own terms, without the stress of chasing the next paycheck, no more rushed mornings or long commutes, and more time to spend with the people you love or on the things that truly bring you joy. If you’re reading this, chances are you’re dreaming of the freedom that comes with early retirement, and let me tell you—this dream is not only possible, it’s achievable.

But like any journey worth taking, it won’t happen overnight. It takes intention, smart decisions, and a strong commitment to shaping the life you truly want. As a New Zealander, you have the added benefit of a solid social security system, good financial resources, and a strong culture of saving and investing. All of these put you in an excellent position to take control of your financial future.

In this guide, I’ll walk you through a step-by-step plan on how to retire early in New Zealand—how to build wealth, save aggressively, and invest wisely. But let’s make one thing clear: this isn’t just about numbers, strategies, and spreadsheets. It’s about making the most out of life, having the freedom to chase your passions, and most importantly, living life with purpose. This journey is for the dreamers—the ones who want to live life differently.

Step 1: Take a Deep Look at Your Finances and Your Future

The first step on your path to early retirement is looking at where you are today. Don’t worry if it feels a bit overwhelming or uncomfortable; this is just the first step in turning your financial dreams into a reality. Think of it as a checkpoint, a way to understand where you’ve come from and where you want to go.

1.1 Track Your Income and Expenses

Take a moment to reflect on your current financial situation. This is the starting point—it’s about knowing exactly what’s going in and out of your bank account. For many Kiwis, it’s easy to overlook the small stuff—the daily takeaway coffee, the occasional brunch, or the monthly subscriptions. But when you’re planning to retire early, these little things can add up over time.

I remember when I first started my journey to financial freedom, it felt so daunting to track every cent. But I promise you, the clarity that comes with knowing exactly where your money goes is incredibly freeing. Use budgeting tools like PocketSmith or YNAB to track your expenses. It helps to categorise them—basic living expenses like rent or groceries versus your fun money for eating out or holidays. You might be surprised how much you can save when you start making conscious choices about where your money is spent.

1.2 Calculate Your Net Worth

Once you’ve tracked your income and expenses, it’s time to calculate your net worth. Now, before you start stressing out about it, take a deep breath. This isn’t about judging yourself or feeling like you should have more at this stage—it’s simply about understanding where you stand financially.

Your net worth is the difference between what you own (your assets—your house, savings, investments) and what you owe (your liabilities—mortgages, loans, credit card debt). This number will give you a clear picture of what you need to focus on in order to build wealth. It’s your financial starting point, and no matter what your current net worth is, it doesn’t define your future. It’s just a snapshot of today. You can change it with consistent effort.

Step 2: Set Clear, Achievable Retirement Goals

One of the most important aspects of early retirement is having a target. Just as an athlete needs a goal to train for, you need a clear financial goal to work towards. But your goal doesn’t have to be just a number—it should be a lifestyle you want to achieve.

2.1 Define Your Target Retirement Age

How old do you want to be when you retire? Early retirement can mean something different for everyone. Some may wish to retire at 50, others may want to retire by 40. The sooner, the better, right? But setting a realistic target age is key to figuring out how aggressively you’ll need to save and invest.

Retiring early means not working the typical 9-to-5 schedule for decades. Think about how you want to spend your time. Do you want to travel the world? Maybe you dream of spending more time with your family or exploring new hobbies you’ve never had the time for. Visualise the life you want to live, and let that image guide you to your target retirement age.

2.2 Calculate Your Financial Independence Number (FI Number)

To make this dream a reality, you need to calculate how much money you’ll need to retire comfortably. The FI number is the amount of money you need to have saved and invested by the time you want to retire. A common rule of thumb used by those on the FIRE (Financial Independence, Retire Early) movement is the “25x rule,” which suggests you should have 25 times your annual living expenses invested.

Let’s say you estimate needing $50,000 per year to live comfortably. Under the 25x rule, you would need $1.25 million in investments ($50,000 x 25) by the time you retire. Sounds like a big number, right? But remember—this is just a guideline. If you live frugally or downsize your lifestyle, this number may be lower. Also, keep in mind that your KiwiSaver and other retirement accounts are a big part of this calculation.

Step 3: Develop Healthy, Consistent Saving Habits

Now that you know your target number, it’s time to get to work. Saving money can sometimes feel like a daunting task, but it’s all about forming the right habits. Small steps, taken consistently over time, will bring you closer to your early retirement goal. Think about the long term—every dollar you save today is one step closer to financial freedom.

3.1 Automate Your Savings

The key to consistent saving is automation. Set up automatic transfers to your savings and investment accounts as soon as you receive your income. The more you make saving a non-negotiable habit, the easier it becomes.

In New Zealand, we have the benefit of KiwiSaver, which is an automatic, government-supported retirement savings scheme. Many employers match your contributions, so if you’re not already contributing at the highest rate (3% minimum), try to increase your KiwiSaver contributions to take full advantage of this benefit.

3.2 Cut Out Bad Debt

Debt can hold you back from reaching your goals, especially high-interest debt like credit cards or personal loans. Paying off this debt should be a top priority if you’re serious about early retirement. I know it can be hard—there was a time when I felt overwhelmed by my own debts. But the moment I started prioritising debt repayment, it felt like a weight lifted off my shoulders. Use methods like the debt snowball or debt avalanche approach to tackle this step by step.

When you eliminate bad debt, you’re freeing up more of your income to put towards savings and investments. It’s a crucial step toward achieving the financial freedom you crave.

Step 4: Invest Wisely to Grow Your Wealth

Saving alone isn’t enough to retire early. You need your money to grow. That means making smart, well-informed investments. The stock market, property, and other investment vehicles can provide substantial returns if you invest wisely and with patience.

4.1 Invest in the Stock Market

The stock market can feel intimidating, especially if you’re a beginner. But let me tell you—investing in stocks is one of the most powerful tools you have to build wealth over time. In New Zealand, low-cost index funds or exchange-traded funds (ETFs) are great options to start with. These funds track a broad range of companies, spreading the risk and offering strong long-term growth potential.

Platforms like Sharesies, InvestNow, or SuperLife make it easy to invest in these funds. I know it might feel risky, but when you invest for the long term and take a diversified approach, the stock market rewards patient investors.

4.2 Maximise Your KiwiSaver

KiwiSaver is one of the best tools at your disposal. Not only does it give you a great head start in saving for retirement, but it also offers the benefit of employer contributions and government top-ups. I always encourage people to contribute as much as possible to their KiwiSaver, because it’s a risk-free investment for your retirement future. The best part is, you’re essentially getting free money from the government just by making those contributions!

4.3 Property Investment

In New Zealand, property is often seen as a safe, stable investment. Many Kiwis build wealth through property—whether it’s buying rental properties or flipping homes. However, property investment requires more capital upfront, and it comes with its own set of risks. If property investing interests you, be sure to do your homework. You can also consider alternatives, such as Real Estate Investment Trusts (REITs), to gain exposure to property without the need to buy physical real estate.

4.4 Diversify Your Investments

While stocks and property are the big players in New Zealand, it’s important not to put all your eggs in one basket. Consider diversifying your investments into different asset classes, such as bonds, peer-to-peer lending, and even some cryptocurrency (with caution). Diversification spreads risk and helps you weather the ups and downs of different markets.

Step 5: Live Below Your Means

One of the most important habits you’ll need to develop for early retirement is learning to live below your means. It’s not about deprivation—it’s about making intentional choices that put your financial future first.

5.1 Cut Back on Unnecessary Expenses

In New Zealand, many of us have a habit of spending more than we need to. We buy the latest gadgets, take expensive holidays, or eat out more than we should. I’ll be honest—I’ve been guilty of this too. But when you focus on saving for early retirement, those small luxuries become less important. You’ll start seeing more value in experiences, quality time with loved ones, and investing in your future.

5.2 Avoid Lifestyle Inflation

As your income grows, it can be tempting to upgrade your lifestyle. But if you’re serious about retiring early, resist the urge to overspend. The goal is to keep your living expenses low and invest the extra income. The more you resist the temptation of lifestyle inflation, the faster you’ll build your wealth.

5.3 Downsizing

Consider downsizing if it makes sense for you. If your house is bigger than you need or if your car isn’t serving your needs anymore, this can be a great way to free up more capital. Don’t think of it as a sacrifice—it’s a conscious choice to put your money where it will benefit you the most.

Step 6: Regularly Review Your Progress

As you work towards early retirement, make sure to regularly check in on your progress. This isn’t about stressing over every dollar—it’s about keeping your eyes on the prize. I review my investments every few months to ensure everything is on track. Keeping an eye on your net worth and making necessary adjustments will help you stay focused on your goal.

Step 7: Embrace the Journey

Early retirement isn’t just a destination—it’s a journey. Enjoy it! Celebrate small victories along the way, whether it’shitting a savings goal or paying off a loan. Each milestone is a step closer to the freedom you’re working toward.

Conclusion: The Road to Financial Freedom

Retiring early in New Zealand is not just about the money—it’s about creating a life you love. With the right planning, determination, and smart financial decisions, you can build the life of your dreams. Stay committed, stay disciplined, and, most importantly, remember why you’re doing it in the first place.

This journey might take time, but every day you move closer to your financial independence, you’re one step closer to that life you’ve always dreamed of. The freedom to enjoy life, your way, is waiting for you. Don’t let anything hold you back.