Article written by InvestNow – 31 October 2023

Will your KiwiSaver balance be sufficient to cover your retirement lifestyle?  

According to a study done by Massey University in 2022, a single person retiring at the age of 65, assuming they live until 95, will need a lump sum of around $1m to $1.2m just to be able to afford a simple retirement lifestyle, and closer to $2m if they wanted a more comfortable retirement lifestyle. 

To up your odds of a financially comfortable retirement in New Zealand, there are a few key steps you can take: 

1. Start saving early: The earlier you begin saving for retirement, the more time your investments have to grow. Consider participating in the KiwiSaver scheme, which offers contributions from both you and your employer, as well as potential government contributions. 
2. Contribute regularly: Make consistent contributions to your retirement savings. Consider increasing your contributions as your income grows or whenever you have the ability to do so. 
3. Diversify your investments: Spread your retirement savings across a range of asset classes, such as shares, bonds, and property. Diversification can help reduce risk and improve the potential for long-term returns. 
4. Monitor and review your investments: Regularly review your retirement investments to ensure they align with your goals and risk tolerance. Seek professional financial advice if needed. 
5. Control your expenses: Keep your living expenses in check and strive to live within your means. Minimise debt and prioritise saving for retirement. 
6. Consider additional savings options: Apart from KiwiSaver, explore other retirement savings vehicles such as additional voluntary contributions to KiwiSaver, individual retirement savings accounts, or other investment options that suit your financial goals. 
7. Seek professional advice: Consult with a qualified financial advisor or planner who can provide personalised guidance based on your specific circumstances and help you develop a retirement plan tailored to your needs. 
8. Stay informed about changes: Keep up-to-date with any changes to retirement policies, tax regulations, or government initiatives that may impact your retirement savings. 

Remember, the steps mentioned above provide general guidance, and it’s crucial to consider your individual circumstances, risk tolerance, and long-term financial goals when planning for retirement. A financial advisor or planner can provide personalised advice based on your situation and help you develop a comprehensive retirement strategy. 

We asked our office investment experts for their retirement saving top tips, and this is what they had to say:
“Don’t waste your money. That money you spend on a flash car in your 20’s could compound into a significant chunk of retirement dollars at age 65. THEN you can buy the car.” – Mike Heath, InvestNow General Manager 

“Automate as much of your saving and investing as possible – for many people a ‘set and forget’ type approach to squirrelling money away for retirement is the best way to make consistent progress towards building that nest-egg. That’s where initiatives like KiwiSaver and InvestNow’s Regular Investment Plan, where money is invested at consistent intervals, can be key in setting you up for success.” – Jason Choy, Senior Portfolio Manager