Retiring Over The Next 20 Years? You Won’t Be Able To Afford It!

Retiring in the next 20 years will be financially challenging for many Kiwis!

If you’re close to retirement age, you’ll definitely want to be kicking up your feet soon! 

Unfortunately, this may not be possible, as a new study shows most Kiwis aged 45-59 do not have enough money to comfortably retire. 

Read on to find out about the difficulties facing soon-to-be retirees AND how to best prepare for retirement! 

Trouble in the air! 

The Retirement Income Interest Group (RIIG) have released their 2022 report. Taking a range of anonymous data from various KiwiSaver providers, they have found that those currently aged 45-59 are estimated to have a balance of $124,400 (median) when they reach retirement age in the coming two decades. According to National Capital Director Clive Fernandes, more than $124,000 will be needed to secure approximately $1000 per week, which the average Kiwi will need as retirement income.

Also, this data only considers those actively contributing to their Kiwisaver accounts and suggests that around 20% of Kiwis aged 45-64 were not contributing.

Among the findings, RIIG suggests that, "for those invested in the most conservative funds with no growth assets, negative real growth in the balance is likely as fees and inflation outstrip investment return."

The projected balances from the RIIG report suggest that many Kiwis won't have enough money for retirement, relying heavily on superannuation payments. However, the weekly government payout is not enough for the typical Kiwi retirement. 

Financial advice is the solution

This report highlights the importance of financial advice for KiwiSaver members. What might savings at retirement look like if personalised financial advice was accessible?

Clive says, "The average Kiwi could have up to $40,000 more in their KiwiSaver account by being in the right fund."

Clive firmly believes in education, personalised advice, and informed decision-making. Information can be hard to understand in the finance world, often full of industry terms and phrases, creating barriers for those not in financial circles.

Fernandes says informed decision-making with regard to KiwiSaver can have numerous benefits. For one, it can help members make better investment decisions, leading to higher returns and financial stability. It can also help people avoid making costly mistakes, such as reacting to market volatility without understanding what it is. Additionally, education and advice can help individuals make more informed decisions about managing their money, leading to better financial planning and budgeting.

It’s time to start planning! 

A lot of the time it can feel like planning for retirement is a job for the distant future. However, for those approaching retirement, it’s actually a sudden necessity. 

Older people must start thinking about their financial planning as soon as possible. This includes considering how much money will be required to support their desired lifestyle during retirement and determining the best way to save and invest to reach their financial goals.

Some key steps in financial planning for retirement include: 

  • Evaluating current savings and investments.
  • Estimating future expenses and income.
  • Setting financial goals.
  • Creating a budget and making a plan to reach those goals. 

"Once someone has determined their retirement goals, they can use strategies like a 'bucketing' approach which allows individuals to continue investing whilst also having security in their KiwiSaver balance," said Fernandes.

Whilst the RIIG report on future KiwiSaver balances and implications for retirement is a shock, it could be the 'wake-up' call needed to promote change.

Check out National Capital!

To start your retirement planning, the best thing you can do is consult a financial advisor. Lucky for you, we know exactly who you should talk to! 

Our friends over at National Capital are independent financial advisors who will give you great advice on your KiwiSaver! They’ll help relieve your financial worries, allow you to make informed choices, and give you confidence in your investments. 

To start, use their FREE online tool Kiwisaver HealthCheck! It collects some of your information to provide you with tailored recommendations on which Kiwisaver fund is best for your needs! 



Head to Money Compare!

Since you’re already looking into your retirement funds, why not check out whether you can get better deals on all your other financial plans too. 

The best way to do this is by heading to Money Compare

At Money Compare, you can compare all your financial plans! This includes your home loan, car insurance, personal loans and much more.

You’ll save heaps of money and find the perfect plan that meets your needs!

All you have to do is: Jump on our website, enter in a few details, select filters that match your preferences and hit enter! Then you’ll see all the plans available to you. You can compare them all side-by-side on one page. 

It couldn’t be simpler! 


For more help on your KiwiSaver, check this out

*This is an educational guide only. It is in no means specific financial advice. Please consult a professional financial advisor (like the ones at National Capital) for any specific financial advice you may require.*

Wednesday, 8 February 2023