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Is it a bird? Is it a plane? No, it’s “Super-KiwiSaver”!


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When someone first told me that the retirement savings scheme in New Zealand was called “KiwiSaver”, I thought they were joking and had visions of a superhero saving kiwis. Then I discovered that the government funded scheme was “Super”!

In the UK where I hail from, there is a state pension, personal pensions, SIPP and SSAS. Very British and very formal. “Super” is how we would describe an afternoon at the cricket.

Whilst I’m now used to the language, I am still struggling with how sceptical and uninterested kiwis are about KiwiSaver. Someone told me just the other week that they hadn’t joined KiwiSaver as they didn’t want the government taking their money; they genuinely thought that the IRD was taking money from their wages and that it was no longer theirs. Perhaps because it is not accessible, we don’t consider the money to be ours until we can actually spend it, and this is partly what is driving the lack of engagement with our money.

Have a look at these questions; I have yet to meet someone who can get to question 5:

  1. Do you have a KiwiSaver?
  2. Who is it with?
  3. How is your money being invested?
  4. How much are you contributing?
  5. What is it going to mean for you in retirement?

Most people can answer question 1. Some get stuck at question 2. By question 3, we are struggling. Back in 2007 after KiwiSaver was launched, this was more acceptable as balances were generally small. As time has gone on, balances have increased dramatically and a lot of KiwiSaver members now have considerably more money invested than they think. For a lot of people, they have more money in KiwiSaver than they do in the bank. So why aren’t we more interested in how it is being managed?

The concept of KiwiSaver is brilliant. Everyone needs to save for retirement. Super is super, but it’s not that Super, and for most retiring Kiwis, it would be a huge drop in income to go from a salary onto Super alone.

It can seem very complex, there are a lot of terms like PIR and risk, and there are a lot of rules. It does take time to understand, but we need to make the time to understand it, as KiwiSaver is going to form a bigger and bigger part of our retirements and managing it properly will make a huge financial difference.

A quick example:

  • Consider a 25-year-old with an income of $40k contributing 3% of their salary into KiwiSaver. They are enrolled into the default fund and stay there until 65. Their balance would be around $316k at retirement.
  • If that 25-year-old was instead in a Balanced Growth fund (rather than the default fund), their balance would be $637k at retirement.
  • If they increased their contribution rate from 3% to 4%, the balance would be $739k. That’s more than double the original amount!
  • Starting early is key. Every $10 contributed to KiwiSaver at the age of 20 is worth around $75 at the age of 50 (assuming 7% returns). That’s massive! Why wait until you’re older and having to put in more money for retirement, when you can start small, but early.

We all need to get more interested in our KiwiSavers. The money is ours and we can take control by choosing the right manager, choosing how our money is invested and seeking advice if we aren’t sure. Yes, we may not be able to access it for a while, but with us all living longer it is going to become a bigger part of our future, and should be given the chance to be a Super-KiwiSaver!

This is opinion only and should not be considered advice. For personalised advice, please contact us.