A quarter of young people enrolled in KiwiSaver don’t know which type of KiwiSaver fund their savings are in, and 72 per cent haven’t worked out the amount of money they’ll need for retirement, new research commissioned by Westpac NZ shows.
In the older age group of 55+, only 40 per cent of those surveyed had estimated how much money they would need, and most had their money in a conservative or balanced fund.
“There may be good reasons for some young people, like first-home buyers, to be in a low-risk fund, but others may be better suited to a different product,” says Simon Power, Westpac NZ’s General Manager of Consumer Bank and Wealth, in a press release.
“Depending on their appetite for risk and how soon they’ll need to make a withdrawal from their KiwiSaver account, some of those people might want to review whether the type of fund they’re in has the right balance of risk and potential return to give them the kind of retirement they are seeking.”
Power encourages everyone to calculate how much money they might need to cover retirement.
“People should also regularly review what KiwiSaver scheme fund they are in and whether it is best suited to helping them achieve their lifestyle goals.”
Of those surveyed aged between 18 and 24, 74 per cent said their main reason for belonging to KiwiSaver was to save for a first-home deposit.
“Owning a home is very positive to financial security, but the key is to maintain KiwiSaver contributions after purchasing their home so that their retirement savings don’t fall behind,” Power says.
“It can be tempting to leave it for a year or two, which can easily become longer. It’s important they start saving again quickly,” he says.
The study surveyed 1007 KiwiSaver investors last year.
First published 13 April 2018
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