You’ve turned 65! Congratulations! Now it’s time to put your feet up, potter around the garden, and spend time with family and friends. Right?
Of course! We all want to retire comfortably but unfortunately, it seems like that’s becoming increasingly difficult. Without a decent amount of money in your KiwiSaver, you’ll likely be struggling to make ends meet during retirement.
Current research shows that many Kiwis won’t have nearly enough money to be able to afford retirement. So, we thought we’d share what you need to do now in order to retire happily once you hit 65!
Kiwis don’t have enough funds in their KiwiSaver!
Research reveals that most Kiwis over the age of 65 currently have a KiwiSaver balance just under $50,000. ANZ, the largest KiwiSaver provider in Aotearoa, undertook research that found that their customers’ KiwiSaver balances have increased. In 2016, the average balance was $20,000. Now in 2022, it’s $48,700.
Sounds like a big amount right? It’s actually not. $50,000 works out to about $38 a week during retirement. You might then think, “Well that’s all good, Superannuation will get me through.” Unfortunately, NZ Superannuation is not what it used to be. With the cost of living rising, Superannuation will not be enough to support you throughout retirement. This makes it challenging for those who are wanting to retire at 65 but don’t have a huge amount in their KiwiSaver.
There’s a high chance many will "struggle to live the lifestyle they want once they stop working,” says Katrina Shanks, Financial Advice chief executive.
Kiwis are still working after they hit 65
ANZ’s research also indicates that many older Kiwis are already struggling to get through retirement.
45% of members aged 66 and upwards could still be working, as data shows they continue to make employee contributions to their KiwiSaver. Since employers are not required to make contributions after employees turn 65, the number of elderly Kiwis still working could be even bigger.
This data reveals just how difficult many people are finding it to stay afloat during retirement!
How much money do you need to retire?
The big question then becomes: how much money do I need in my KiwiSaver before retirement?
Well luckily for you, we have the answers!
- A lump-sum of $809,000 is required for a couple to live comfortably in a main city.
- A lump-sum of $511,000 is required for those retiring in rural/provincial areas.
- A lump-sum of $170,000 is required even if you live frugally outside a main city.
We know that’s a lot of money, but sadly that’s the stark reality due to the state of NZ Superannuation. The Superannuation is only $672.22 after tax per week for couples and $436.94 for those who are single. This will not be enough for you to retire, hence, you’ll need to have a good amount in your KiwiSaver.
"The data can't tell us the whole story, but it is a good way of sparking a conversation and getting people to think about what sort of lifestyle they'd like to have after 65 and whether they are on track financially," says Fiona MacKenzie, ANZ managing director for funds management.
(For more on how much retirement will cost, click here!)
Here’s what you need to do to retire comfortably!
Hearing that you’ll need to have hundreds of thousands of dollars in your KiwiSaver account before retirement will probably be stressing you out. Don’t worry though, we’ve got the lowdown on everything you need to do to retire comfortably!
1). Get planning right now!
The best thing you can do for your KiwiSaver funds is to start planning today. The more time you have, the more you’ll be able to save! So start looking into your funds, have a chat with your provider, and see what is required to get you to your dream retirement.
If you need some help on where to start planning, check this out!
2). Make sure you’re in the right fund for your life
There are many different types of KiwiSaver funds. Figuring out which one is best for you is an important decision. The right fund for you will change depending on your age and financial situation. No matter your circumstances, it pays to look into what fund you should be in. The recent market volatility highlights just how important this is!
Also, make sure you are happy with your KiwiSaver provider! Since recent studies show that many Kiwis aren’t happy with their provider, it’s important you don’t just put up with poor service. Only settle for the best!
3). Talk to a financial advisor
Quite possibly the best thing you can do is talk to a financial advisor. These people are experts when it comes to KiwiSaver, so they will easily be able to help you get on track to retiring comfortably!
Check out National Capital!
Speaking of financial advisors, make sure to hit up the good folks at National Capital!
Our friends over at National Capital are independent financial advisors that’ll 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 with, use their FREE online tool Kiwisaver HealthCheck! It collects some of your information to provide you with tailored advice on which Kiwisaver fund is best for your needs!
Don’t forget to use Money Compare!
Since you’re already looking into your KiwiSaver funds, why not check out and compare all your other financial plans too!
The best way to do this is by using 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!
So remember, start planning now so you can retire the way you want to! All you have to do is follow our tips and check out National Capital AND Money Compare!
*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.*
