Retirement Sorted Thanks to Kiwisaver? Think again!

Just because you have enrolled with Kiwisaver doesn’t mean you are sorted for retirement. In fact, you may be in for a rude awakening when you reach 65.

Writing on the www.goodreturns.co.nz website, Susan Edmunds reports that one of the biggest concerns for the Commission for Financial Capability is that savers think that, having signed up, they do not need to do any more.

David Boyle, group manager of investor education, says one of his biggest concerns about KiwiSaver is that savers “Join and in a lot of cases they’ve ticked the box and think ‘I’ve done that, I should be set’. But they haven’t worked out what that might mean when they retire.”

He says just contributing the 3% of income minimum, matched by the employer contribution, would not be enough to give most people a comfortable retirement. “Three per cent [of your income] is not going to get you there, even if you start really early, it’s not enough. That is a real problem.”

ANZ research has shown that 79% of savers want more than the $370 per week a single person can get from the pension in retirement.

Of those who want extra income, 40% want more than $300 extra every week, and 31% want more than $500 each week on top of super. To get that for 20 years, they would need a lump sum of $700,000 or $900,000, respectively.

That is well out of the reach of someone on the average wage unless they top up their KiwiSaver accounts significantly.

If you would like clear, unbiased advice about Kiwisaver and your retirement plans, contact me today.

 

Source: http://www.goodreturns.co.nz/article/976502982/kiwisavers-not-on-track.html

© KEPA 2015

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