Could your adult children benefit from some timely retirement savings advice?
KiwiSaver has been around since 2007, and its arguably the one and only way many New Zealanders are saving for retirement.
Extremely interesting research by the NZ Financial Services Council in 2018, revealed that many people wish that they had sought out financial advice earlier in life to help them prepare for retirement. In fact, the research concludes that nearly four in every 10 adults fell into this category.
It’s human nature that when we’re young, retirement looks a long way away and it’s just not a priority. You think you’re going to earn enough through life to see you through.
For those of us who are closer to our retirements, we would probably tell our younger selves to be prepared and seek professional advice. The next best thing is to urge our grown-up children to give it some serious thought.
A typical response from young people when asked for their overall thoughts on the circumstances they would face in retirement was: “I’m not sure – it’s very far away for me.” (Male, 18-24 years, Christchurch). “Not thinking of it yet.” (Male, 18-24 years, Palmerston North). “I’m not sure how policies will change or if there will be any requirements in order to retire at a certain age. I don’t know what age I’ll be able to retire and how much money I will have to retire.” (Female 18-24 years, Rotorua).
Another revealing comment from a young New Zealander is: “To be honest it isn’t something I have thought a hell of a lot about. All I know is that I’m 21 and in 2 and a half years my KiwiSaver account has 10 grand which I think is decent and then if I add to that any investments I have made I think I should be alright by the time I retire but to be completely honest I actually have no idea.”
This is some research you can do at home. Why not ask your age 18+ children about what they think? If they’re typical of many young New Zealanders, they may reflect the views of those in the survey.
There are of course young people who are thinking about the future. But again, there is a knowledge gap that needs filling. Many who were surveyed said that they would like advice in a range of areas including which KiwiSaver portfolios to put their money into.
At AdviceFirst, we would encourage seeking financial advice from an expert early on in one’s working life. Whether it’s just to help decide appropriate KiwiSaver investment portfolios or putting in place a plan to buy a house, it can be very valuable.
The full report makes for a fascinating read. You can see it here: https://www.fsc.org.nz/site/fsc1/Generation%20KiwiSaver%20Paper%20FINAL.pdf
