Article written by Mike Heath, InvestNow General Manager – 21st February 2025

InvestNow’s first biannual Retirement Readiness Index has identified a distinct lack of confidence in retirement planning among New Zealanders, raising some concerns over the prevalence and quality of retirement planning.

Our goal was to gain insights into individuals’ financial preparedness for retirement, encompassing their retirement plans, confidence in their planning, investment strategies and anticipated retirement lifestyles.

In late 2024, we surveyed 801 InvestNow customers and 500 non-customers through an omnibus survey, and came away with a headline index of 50.4% average confidence.

That number tells us that, in total, only half of New Zealanders with a plan are confident in it.

34% of respondents said they didn’t have a retirement plan.

The findings suggest many New Zealanders are not well prepared for retirement financially, and many don’t expect to be.

Findings

Of the two groups surveyed, InvestNow customers were more likely to have a retirement plan than non-customers (78% v 47%). They were also more likely to be confident in their plan (70% v 19%).

Generally speaking, the older someone is, the more likely it is they have a plan in place. Those with the bigger investment portfolios are also more likely to have a plan.

But a key takeaway is that it’s not enough just to make a retirement plan and expect it to see you through.

This is particularly true in the case of non-InvestNow customers, where only 51% were either pretty confident or really confident in their plan. Among InvestNow customers, more than 80% said they were confident in their plan.

Those that didn’t feel confident were asked what it would take to feel more confident.
Common responses were:

• Winning Lotto
• Lack of finances
• Unpredictable economy / financial markets

Of those that don’t have a plan for retirement, most want to make one quickly. 51% of InvestNow customers without a plan intend to make one as soon as possible. For non-customers, that number is 37%.

This demonstrates that a significant proportion of people who don’t have a plan see it as being important – albeit not important enough to have made one already.

Generally speaking, the younger someone is, the less urgency they have to make a plan. Responses also revealed a common belief that KiwiSaver alone (on top of government superannuation) would not provide sufficient income to finance someone’s retirement.

Interpretation

If the majority of Kiwis do not have a retirement plan that they are confident in, that paints a fairly bleak picture for the lifestyles people will be forced to have in retirement.

It begs the question, why make a plan if you don’t think it’ll work? And why not change the plan if you don’t believe in it?

Conventional wisdom dictates the earlier you start saving for retirement, the easier it becomes to save and the more money you will ultimately have.

Compound interest can be your best friend in saving for retirement, but it takes years to accrue in significant amounts.

A common thread among respondents that don’t have a retirement plan is they simply haven’t got around to formalising one yet.

This echoes the sentiment among the high proportion of young people that don’t feel any urgency to make a plan right now.

It’s great to tuck money away, but if you haven’t thought about how much you actually need, or calculated how much you’ll end up with by retirement age, then it’s impossible to know if it’s enough or not.

There are some great tools out there for people to assist their retirement planning, like our Investing Principles, or you should consider working with a qualified financial adviser – you owe it to yourself to put in the time.

Disclaimer:

This information is provided by InvestNow Saving and Investment Service Limited (“InvestNow”). The information and any opinions in this publication are based on sources that InvestNow believes are reliable and accurate. InvestNow, its directors, officers and employees make no representations or warranties of any kind as to the accuracy or completeness of the information contained in this publication and disclaim liability for any loss, damage, cost or expense that may arise from any reliance on the information or any opinions, conclusions or recommendations contained in it, whether that loss or damage is caused by any fault or negligence on the part of InvestNow, or otherwise, except for any statutory liability which cannot be excluded. All opinions and market commentary reflect InvestNow’s judgment on the date of this publication and are subject to change without notice. This disclaimer extends to any entity that may distribute this publication. The information in this publication is not intended to be financial advice for the purposes of the Financial Markets Conduct Act 2013, as amended by the Financial Services Legislation Amendment Act 2019. In particular, in preparing this document, InvestNow did not take into account the investment objectives, financial situation and particular needs of any particular person. Professional investment advice from an appropriately qualified adviser is recommended before making any investment.