Retirement: not a case of ‘set and forget’!

Written by: Sarah Thornton – Thornton Communications

Our Financial Compass survey reveals more than half know they won’t have enough to live on in retirement. Our Director and resident KiwiSaver expert takes a look.

Many Hawke’s Bay people admit they have no idea of how much they’ll need to live on in retirement and three-quarters know their KiwiSaver savings won’t be enough to live on, according to the results of a recent survey by our team here at Cole Murray.

So, what are we all doing about it then!

The Cole Murray Financial Compass Survey, undertaken during Money Week, questioned more than 120 Hawke’s Bay people from a cross-section of financial positions.

“The majority (87%) of people surveyed are enrolled in the KiwiSaver initiative and we are seeing an increasing uptake of KiwiSaver, which is encouraging. For three-quarters of those people however, they admitted to knowing they can’t rely on KiwiSaver being enough for their retirement, but are not sure what to do about it. It indicates that the level of understanding about the scheme is quite low,” says Cole Murray director Jeremy Cole.

It seems people are taking a ‘set and forget’ approach to KiwiSaver instead of actively managing it and optimising their funds.

“For example, many people are missing out on gaining the $521 annual government contribution from simply not realising they are eligible” says Jeremy.

While longevity is putting pressure on already strained retirement funds, Cole says we need to take a leaf out of Australia’s book, where Super is compulsory at 9.5 percent, and rising to 13% over future years.

“The minimum employee contribution in New Zealand is three percent, and contributions rise to six percent when employers match those contributions. And that’s only for people who are enrolled in KiwiSaver. We need to do more to educate people that saving the minimum is not enough, and to start boosting their savings sooner rather than later.

“Taking charge of our retirement saving is imperative and it’s also important to monitor the performance of your KiwiSaver account with a professional, and make any changes each year to the fund or the risk level.”

The survey also highlighted the demand for a financial ‘health check’, with 94 percent of those questioned saying either working it out themselves or consulting with a financial services firm would help them understand their financial position.

Does your KiwiSaver need a boost?

Having an Adviser on your side when it comes to optimising your KiwiSaver money can be a real benefit compared to mainstream KiwiSaver options. Cole Murray’s award-winning Retirement Planning service includes free annual reviews of your KiwiSaver to ensure it is set up correctly for your needs, and keeps pace as life changes. 

Photo by Aaron Burden on Unsplash

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