Many KiwiSaver members are not taking action with their investment and may be losing out on money for their retirement, new research shows.
The Horizon Research survey of 781 current KiwiSaver members, commissioned by KiwiSaver scheme provider Kiwi Wealth, shows 77% of people do not know what their KiwiSaver account will be worth when they retire.
In retirement income, 55% estimated they would need $400 to $600 a week, after tax, to live on. Massey University research showed even for a ‘‘no frills'' retirement, someone living in a metropolitan centre would need $490 a week.
At present, New Zealand Superannuation for a single person was about $370 a week, leaving a shortfall that needed to be bridged by KiwiSaver.
Kiwi Wealth spokesman Joe Bishop said there was a large gap between people's retirement income expectations and the amount they needed to save to achieve it.
‘‘For an initiative designed to encourage retirement savings, it is alarming 77% of KiwiSaver members don't know how much will be in their account when they retire.''
The survey highlighted the many KiwiSaver members who were not taking action with their investment. As a result, they were compromising their future retirement lifestyle, he said.
The prevailing sentiment appeared to be many people approached their KiwiSaver accounts like bank accounts when they should be thinking about them as investments.
‘‘Many of these accounts are lying ignored in default funds which may not be performing as well as other funds more aligned to the customers' risk profile and investment timeframe.''
Too many members were short-changing themselves. They needed to be more involved with their investment and make informed decisions, Mr Bishop said.
Forsyth Barr investment adviser Damian Foster said for many New Zealanders, KiwiSaver might be their only regular form of retirement savings.
Many had other forms of wealth creation such as home ownership, business and personal investments.
However, regardless of how people got there, the most important thing to remember in retirement planning was getting started as early as possible.
‘‘KiwiSaver has provided a great prompt for many New Zealanders to start saving more towards their retirement.
‘‘The next step is to ensure you are contributing enough and investing wisely to reach your desired retirement lifestyle.''
The Government provided an independent resource to assist at sorted.org.nz, Mr Foster said.
At a glance
77%of KiwiSaver members do not know what their account will be worth when they retire.
More than 25% of KiwiSaver members do not know the type of fund their KiwiSaver account is in.
A third have never reviewed the type of fund their KiwiSaver is in, such as conservative, balanced or growth.
14% do not know who their KiwiSaver provider is with people aged 25 and younger least likely to know at 38%.
