After ten years of KiwiSaver, the retirement savings of many New Zealanders have got off to a solid start.
Today, around 2.7 million Kiwis have joined our national superannuation scheme, which has $41 billion of funds under management.
How much does the average Kiwi have in KiwiSaver?
KiwiSaver is a vehicle designed to help people save and grow money for retirement or buy a first home.
It provides a powerful combination of individual, employer and government contributions that means almost everyone who has joined is better off today had they decided to save solo.
An average Kiwi who joined early, got the $1,000 kickstart, made the minimum employee contributions, received the minimum employer contributions and collected all the available member tax credits, is likely to have a balance around $30,000.
According to David Boyle from the Commission for Financial Capability (CFFC), it’s important to remember KiwiSaver is still relatively young so members need to save consistently and give their balances time to grow.
What’s the future for KiwiSaver?
Boyle says the CFFC will be working hard to help cement a savings and investing habit among New Zealanders over the next 10 years.
The Commission is planning changes to KiwiSaver, including renaming the contribution holiday to a contributions suspension and showing people the long-term financial consequences of not putting money into savings today.
It also wants to see individual future KiwiSaver balance projections on statements to help people better understand the direct impact of their efforts.
“Averages don’t give a great picture. Personalised information is much more motivating because it lets people see the impact of their behaviour over the long term,” he says.
Other planned changes include having KiwiSaver fees reported in actual dollar amounts rather than percentages and enabling easier access to advice about investing for retirement.
To find out if your savings are on track for your ideal retirement lifestyle, try our Retirement Income Simulator.
This article has been published as a general information service and does not take account of the investment objectives, financial situation and/or particular needs of any person. Before making any investment decision, you should take financial advice as to whether your intended action is appropriate in light of your particular investment needs, objectives and financial circumstances. Neither Mercer nor any of its related parties accepts any responsibility for any inaccuracy.