KiwiSaver investors will see how much money their KiwiSaver investments could provide at age 65 when they open their annual statements this year.
Launching a campaign to help KiwiSaver members interpret their statements Retirement Commissioner Jane Wrightson and Financial Markets Authority Chief Executive Rob Everett said the new information would help people focus on how much money they may have when they retired, and how this would break down as weekly income.
“KiwiSaver is a long term investment and it can be difficult for people to visualise how much the money they contribute today could amount to at retirement,” said Wrightson.
“This year’s statements include a projection of how much money each KiwiSaver member may have when they turn 65. While some may be pleasantly surprised, others might want to make some changes to boost their retirement savings.”
The figures are not a guaranteed sum but are based on assumptions applied across all member statements.
Everett said the statements were arriving when many investors in balanced or growth funds have seen a negative fund performance for the year to 30 March 2020 due to a sharp downturn in financial markets associated with COVID-19.
“KiwiSaver is nearly 13 years old and most investors are used to seeing their balances head continually upwards," says Everett. "It’s fair to say KiwiSaver members have been given a crash course over the past few months in the risks and volatility of investing.”
Wrightson said retirement may seem a long way off for many, and that’s what made KiwiSaver a long game.
“KiwiSaver investments in shares and property can swing up and down, sometimes dramatically, but historically deliver better returns over the long term. Find out which fund is the right one for you and stick with it – you’ll reap the rewards in years to come.”
What’s the important information you can find in your statement this year?
- Estimated potential retirement projections as a lump sum and converted into a weekly income
- Contributions
- Investment gains or losses
- Tax paid
- Fees paid in dollars
What you should do?
Take a look at your statement. Ask yourself these questions:
- Am I happy with the amount of money I’ll have at 65 – does it fit with what I think I will need in my retirement?
- Am I in the right KiwiSaver fund to deliver what I think I will need?
- Am I getting good value from my KiwiSaver provider – do their fees seem reasonable, do I have good access to the information I need?
What would happen to my projected end balance if I could afford to contribute more?
Remember these important tips:
- There are lots of different tools on the Sorted and FMA websites to help.
- For anyone starting to accumulate sizeable balances and wanting to plan for their retirement, we encourage people to seek financial advice.
- We understand that many people could be struggling in the current economic conditions, but always remember that KiwiSaver is a long-term investment – keeping contributions going even through tough times, if at all possible, will have a big impact on what you get out of it at 65 and beyond.