Your KiwiSaver won’t be enough…… here’s why

Did you know that most Kiwisaver balances are much less than what is needed for a comfy retirement (and we want comfy right?!?)

Kiwis nearing retirement (age 60-65) have an average balance under $55k, a far cry from Massey University’s retirement guidelines of $600k-$970k* required to have a ‘choices’ lifestyle. Yikes!

The truth is...

Majority of Kiwis are on auto-pilot with just a 3% contribution plus a 3% match.

We tend to think KiwiSaver is a breeze, a set-it-and-forget-it deal, and voilà, retirement sorted! BUT...................

KiwiSaver was created to ease you into retirement savings – kicking off at 3% with a 3% match may be a good warm-up, but it probably won’t be enough to get you to your dream retirement!

Here’s what someone earning different salaries starting KiwiSaver at 25 years old contributing 3% with a 3%match in a growth fund could end up with at age 65 (remember Massey Uni suggests $700k to $800k!)

Earning $50k / year > $263k at age 65

Earning $80k / year > $380k at age 65

Earning $120k/year > $548k at age 65

Earning $150k/year > $679k at age 65

Here’s what happens when you up your contribution to 10% (plus 3% match from employer):

Earning $50k / year > $568k at age 65

Earning $80k / year > $867k at age 65

Earning $120k/year > $1.28M at age 65

Also take into consideration that many of us would be taking part of our KiwiSaver as a deposit for a first home which which make the numbers above lower….

Here's the deal:

Don't snooze on your KiwiSaver!

Jump onto a retirement calculator (I personally use the one from Sorted) to unveil what your current contributions will grow into and what tweaks you can make now for a comfy retirement.

* Based on figures from Massey Uni’s 2023 report which shows you need lump sum of around $717,000 as a single Metro with choices, $824,000 as a single Provincial with choices and $969,000 as a couple with choices in Metro and $609,000 as a couple with choices in Provincial areas.

Disclaimer: A friendly reminder that as always none of my posts are financial advice and is for entertainment, inspiration and education only.