1 Comment 1 CommentShe said a KiwiSaver member’s balance would need to be near $100,000 to be able to be spread across retirement. At the moment, most balances are about $40,000 – but that is growing quickly.
“About one-third of members take their money out at the age of 65. We see another one-third taking a regular withdrawal from their KiwiSaver account. A lot of people actually continue to invest in KiwiSaver and add to it. I guess they’ve seen the benefits of saving through KiwiSaver. It’s really important that, when people hit 65, they ensure that they know their timeframe of future spending, to make sure that they are appropriately investing.”
More decumulation products would need to be developed, she said. “There’s a demand for it.”
More than $1 billion has been withdrawn from KiwiSaver for first-home deposits over the 10 years the scheme has been operating but Lockyer said she supported that function.
“You can’t retire without a roof over your head, in some way, shape or form. It’s a really good benefit we have in New Zealand, and I know other countries are looking to New Zealand as to whether they should also implement such a benefit. It’s well utilised. We’ve seen a 300% increase in the last year of people withdrawing from their KiwiSaver to buy their first home, which is great.”
She said 83% of members said they would continue to contribute, or contribute at a higher rate after they withdrew money to buy a house.
“Disappointingly, we only see just under 50% contributing at a higher rate or restarting the contributions. About 50% of them will continue to contribute into their KiwiSaver. It’s good, and it’s really important for people to work out how they can pay off their mortgage, but I keep going back to the fact that they shouldn’t miss out on those benefits. Don’t miss out on your government contribution, don’t miss out on your employer contribution. Make the most of both.”
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