An increasing number of New Zealanders are relying solely on KiwiSaver for retirement savings, drawn by benefits like employer contributions and government incentives. While this approach suits some, diversifying investments is advisable for greater financial security amid life's uncertainties.
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“A question was asked yesterday about saving for retirement, and I was pretty surprised by some of the answers. Quite a few people were suggesting they have and intend to have no savings outside of kiwisaver for retirement which is not something I have really heard on this sub before. Now, to caveat, I am aware alot of people don’t have a disposable income to save and that it is fortunate to be in a position to have the ability to save but the answers gave the impression it was by choice not circumstance. I was wondering first how many people are doing this? And second, I’d be interested to know your how, when, why etc… for choosing this strategy. Not looking to critique, I’m just interested if there are alternative ways to what we usually discuss.”
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Some people are relying solely on KiwiSaver for their retirement savings in New Zealand, possibly due to its benefits, including employer contributions and government incentives. For these individuals, KiwiSaver alone is perceived as sufficient for their retirement needs. Others might not have the financial means to save besides their KiwiSaver contributions, making it their primary retirement savings vehicle. The simplicity, government regulation, and trust in the KiwiSaver system also play a role in this choice, as some prefer the convenience of having all their retirement funds in one account.
The exact number of people following this strategy is challenging to determine without specific data, as personal circumstances and preferences vary widely. However, it’s important to note that while relying solely on KiwiSaver may work for some, it may not be the best approach for everyone. Diversifying investments and maintaining additional savings can offer financial security in the face of unexpected expenses or market fluctuations, and personal circumstances can change over time. A flexible financial plan that considers individual needs and goals is often recommended to ensure a comfortable retirement.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital..
