KiwiSaver - How prepared are Kiwis for retirement

October 6, 2021

As we mark 14 years of KiwiSaver in New Zealand, the scheme is the most common investment currently held by Kiwis. Last month, the Financial Services Council looked at what Kiwis think about this tool, and how it affects their retirement plans.

Here are some key findings from the report, which you can read in full here.

KiwiSaver can be key to your long-term goals

Are you relying on KiwiSaver to save for your retirement? Most Kiwis are– with 80 per cent of the respondents saying they use or have used the scheme to fund their future nest egg. What’s more, 38 per cent of the respondents have used or plan to use KiwiSaver towards buying their first home.

Plus, KiwiSaver was the most popular investment among the respondents, with 65.4 per cent investing in the scheme, followed by cash (54.2 per cent), and New Zealand shares (30.2 per cent).

Kiwis are concerned over their retirement plans

According to the report, about 72 per cent of the respondents think that they may have to work beyond retirement age, with 65 per cent worried that they may not yet have enough savings to afford their dream retirement lifestyle.

Plus, not knowing how much Kiwis may need for a comfortable retirement can significantly impact their savings, and so too their preparedness.

Contributions matter, and Kiwis want more

Are you able to contribute more? According to the survey, about 75 per cent of respondents (representing almost 3 million Kiwis) support mandatory KiwiSaver, and while they contribute 3-4 per cent into their KiwiSaver, they think upping their contribution rates can further help them prepare for retirement.

So, how much do Kiwis really need for retirement?

Around 25 per cent of respondents (representing 950,000 Kiwis) were not sure how much they need in their KiwiSaver accounts for retirement.

Of course, estimates entirely on your individual circumstances. But if you’re looking for some ball-park figures, based on the 2020 Retirement Expenditure Guidelines from Massey University, for a basic, ‘no frills’ lifestyle for a single person in a metro area, the total balance they would need to fund 20 years of retirement would be $721,032 (52 weeks x 20 years x $693.30 weekly budget).

Like to learn more?

Read the full report here. While everyone’s situation is unique and KiwiSaver is one key way to prepare for retirement, it’s key to seek professional advice and set retirement goals as early as possible.

So if you have any questions, don’t hesitate to reach out. We’re here to help.

*Research Methodology: The survey was conducted online between 15 April and 26 April 2021, amongst a nationally representative population of 2,035 New Zealanders.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.