New Zealanders likely aren't saving enough money for retirement, according to Sorted's personal finance lead Tom Hartmann.
Speaking to Breakfast this morning, Hartmann said all employees should be taking advantage of KiwiSaver's employer contributions.
Employers must contribute at least 3% of an employee's gross salary or wage.
He said the average KiwiSaver balance sits at $28,000, which would be "woefully inadequate" if people were to stop growing their funds.
"Everyone really needs to make an active choice about what KiwiSaver fund they're in and make sure that their risk level is set appropriately for them.
"So if you have lots of time to go before retirement, you really should write out those ups and downs, you want to check for fees in your KiwiSaver fund, make sure they're reasonable, you want to pick your fund well so that you can take advantage for your future."
While Kiwis should be prioritising saving as much as possible for retirement, Hartmann said it did depend on people's lifestyles.
"First thing to understand is how much NZ super provides, so for example, right now it's set for singles at $496 a week and for couples, $764 and for most people in the future they're probably going to want something on top of that and so that's what their savings need to cover."
He said for 60% of retirees, their KiwiSaver is their main source of income. "So in the future what we're trying to do with vehicles like KiwiSaver is actually fill that gap and if you run your numbers on calculators for example, you'll be able to see how much that gap is and how much you're aiming to fill."
Asked if New Zealanders are too reliant on KiwiSaver, Hartmann said we aren't reliant enough.
"We need to rely on it more and more because it's the best vehicle we have in order to save for retirement and particularly because of the incentives, it's not just your money going in, it's money from your employer, it's money from the Government and then the investment returns on top of that really help grow your money for the future."
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