According to an article in Stuff last year*, KiwiSaver has overtaken the car as most people’s second most valuable asset. Average balances are now over $15,000.
And although KiwiSaver is locked away until you reach the age of New Zealand Super, currently 65 years of age, you may be able to withdraw all or part of your savings early including if you’re buying your first home, permanently emigrating or suffering financial hardship or serious illness.
But do you really want to have to sacrifice your planned retirement lifestyle?
That same Stuff article stated that in the 12 months to the end of March 2017, $81 million was paid out of KiwiSaver in cases of financial hardship, with 13,790 people drawing out an average of $5,786 to help pay the bills. Another $32m was withdrawn and paid to KiwiSaver members suffering from serious illness.
Sadly, some New Zealander’s may be accessing their KiwiSaver savings early, when suffering from a serious illness, due to having no insurance in place, or a condition which is not covered by insurance, or insufficient levels of insurance. The problem is that this eats into their retirement savings, leaving a lot less in the pot that could be used during retirement.
AdviceFirst Adviser Peter Chote says: “It just shows how important it is to have a well-thought through financial plan in place where life, trauma, health, and temporary disability cover work in conjunction with a retirement savings plan to help you realise a better financial future”.
He adds: “Remember, reviewing your insurance cover regularly is essential. AdviceFirst can help you do that to work out the best plan for your circumstances, simply get in contact with one of our experts.”
*https://www.stuff.co.nz/business/money/97567771/kiwisaver-nest-eggs-lost-for-lack-of-insurance
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