As many grapple with rising costs and economic uncertainty, KiwiSaver and financial advice stand out as essential tools for building financial resilience. Here, we explore key findings from the report and provide practical tips to help you make the most of KiwiSaver.
Key insights from the Money & You report:
- KiwiSaver remains a cornerstone investment: KiwiSaver remains the primary investment tool for New Zealanders, providing nearly 20 years of support for retirement savings and first-home deposits. However, the report highlights a significant gap: for many, current KiwiSaver participation and contribution levels may not be enough to secure a comfortable retirement.
- Shortfalls in long-term savings: Many New Zealanders still fall short of the savings required for a dignified retirement. With a growing reliance on NZ Super and other support, an increasing number of retirees may need alternative income sources to supplement their KiwiSaver funds.
- Contributions are declining: Despite rising incomes, average weekly KiwiSaver contributions have dropped by 7.8% (or $127) from 2021 to 2023, largely due to a decline in employee contributions. At the same time, hardship withdrawals have hit a record $70 million in early 2024, suggesting that many are struggling to balance long-term savings with immediate financial needs.
- The value of financial advice: The report highlights a marked difference in outlook between those who seek financial advice and those who don’t. While many New Zealanders feel financially strained by the current economic climate, those working with a financial adviser are more likely to feel optimistic about their future. Financial advisers help clients set and stay focused on their goals, navigate life’s uncertainties, and make confident financial decisions.
If you’re looking to strengthen your financial resilience, here’s how to start making KiwiSaver work harder for you, and when to consider seeking advice.
- Review your KiwiSaver statement: Start by reviewing your contributions, fund type, and balance. Understanding where you stand today can help you identify adjustments needed to support your long-term goals. It’s also a chance to assess if you’re on track to meet your retirement savings targets.
- Check out an online calculator: The KiwiSaver calculator on our website and the tools on sorted.org.nz are excellent resources for estimating your projected savings. These can provide a clearer picture of your progress and help you pinpoint areas for improvement.
- Maximise your KiwiSaver contributions: Ensure your contribution rate aligns with your retirement goals. Increasing your contributions, even slightly, can make a significant difference over time. Additionally, make sure you’re receiving the maximum employer and government contributions, including the $521 member tax credit, which requires a minimum annual contribution of $1,042.86.
- Consider speaking with a Haven Financial Adviser: If you’ve never received advice on KiwiSaver, connecting with one of our team members can make a world of difference. At Haven, our advisers offer free, no-obligation consultations to discuss your goals and help you create a plan to achieve them.
Taking charge of your KiwiSaver contributions and seeking professional advice can empower you to weather economic ups and downs and strengthen your financial resilience. KiwiSaver and financial advice are not just investments in your future – they’re steps toward a brighter future.
