Why Gen Z and Millennials need to start retirement planning now
“74% of Gen Zers and 61% of millennials haven’t calculated how much they need in retirement.” That’s according to the latest Financial Services Council (FSC) research report, Money and You: Young People and the Cost of Living Crisis.
The report found that of all age groups, those respondents in the Gen Z and millennial brackets had lower levels of financial wellbeing, literacy and confidence.
It’s not great news, but not totally surprising either.” says Generate KiwiSaver Adviser, Kirstien Taylor. “A lot of the young people we talk to, haven’t previously looked at what their KiwiSaver account is doing or made purposeful decisions with their account setup to really maximise their KiwiSaver investment. Most don’t know what NZ Super is worth and are pretty shocked when I tell them!”
New Zealand Superannuation is currently just over $400 each, per week for a couple living together, or just over $500 per week for a single. While many Kiwis see NZ Superannuation as owed to them, there is growing concern that it alone is not enough for most Kiwis to live on. Supplementing your NZ Superannuation with a healthy KiwiSaver balance is a
must.
That’s why Generate recommends a ‘sooner rather than later’ approach to thinking about and planning for your retirement, “The sooner you get started, the better off you could be” said Kirstien.
“Planning for your retirement doesn’t have to be a difficult, lengthy process. You can simply start by talking to a KiwiSaver adviser and putting together a KiwiSaver plan. After all, you could be in retirement for 30 years, which is a really long time! The sooner you start saving and investing for your retirement, the better off you’ll be!” says Kirstien.
3 steps to get started:
1. Know where you’re at
Who is your KiwiSaver provider and what kind of KiwiSaver fund are you in? Have you chosen a specialist provider, or are you still with a default provider or bank? What’s their long-term performance like? Could you be doing better?
The Generate KiwiSaver Focused Growth Fund ranked 1st for 10-year performance in the NZ multi-sector Aggressive Category*
The Generate KiwiSaver Growth Fund ranked 2nd for 10-year performance in the multi-sector Growth Category*
The Generate KiwiSaver Moderate Fund ranked 1st for 10-year performance in the NZ multi-sector Moderate Category*
2. See what you could be missing
Check out the Generate KiwiSaver Calculator to see what your KiwiSaver balance is on track to be at retirement. Adjust your fund choice or contribution rate to see how this can affect your balance over the long-run.
“The reaction I get from showing Kiwis their projected KiwiSaver balance at
retirement using the Generate KiwiSaver Calculator is more often than not a great motivator for them to take action and make smart savings decisions.”
3. Talk to an expert
It’s well documented that financial advice can add long-term value to your savings. That’s why Generate have a team of expert KiwiSaver advisers nationwide, who can meet with you in person or online over Zoom, to offer no-obligation KiwiSaver advice.
Your Generate KiwiSaver adviser will help you understand things like:
- What KiwiSaver fund type will help you achieve your goals, and at what points in your life it might be a good time to review it.
- How changing your contribution rate could increase your KiwiSaver balance at retirement by $100,000’s!
- How to maximise your savings with the KiwiSaver Government contribution each year.
- What your risk tolerance is, and how this might affect your KiwiSaver account settings.
- How often you should be reviewing and adjusting your KiwiSaver plan – because as we all know things can change!
Knowing all your KiwiSaver options, and what might be right for your savings goals can help make sure you’re maximising your KiwiSaver investment, so you can be better off at retirement.
If you’d like to talk to a KiwiSaver adviser request a meeting here.