Women need to demand KiwiSaver parity.
Research shows women’s retirement savings are lagging behind men’s. Let’s fix that, says Milford Financial Adviser Kirsten Bennett.
The statistics show the KiwiSaver gender pay gap is now 20 per cent, with men having saved an average $32,553 compared to $27,061 for women, according to recent data gathered by the Retirement Commission.
That is better than in 2018, when Stats NZ figures found the median man’s KiwiSaver balance was 25 per cent larger than the median woman’s, while the median man’s KiwiSaver balance in the 55-64 age bracket was 30 per cent larger than the median woman’s.
The Retirement Commission figures, released in April, show that, while the gender gap in KiwiSaver has closed over the last four years, it is still substantial, says Bennett.
The commission contracted actuarial firm Melville Jessup Weaver to collect the data from KiwiSaver providers, capturing data from nearly 3 million KiwiSaver accounts with total balances of $85.44 billion, representing 93 per cent of KiwiSaver accounts. The data was collected to help the commission compile its 2022 retirement income policy report.
The widest gaps were between men and women in their 40s and 50s – on average, women in their 40s have about $10,000, or 30 per cent less in their KiwiSaver accounts than men. Women in their 50s have approximately $13,000, or 32 per cent less.
This is partly the result of longer time periods compounding the effect of lower average contribution rates, as well as women often having selected lower-risk, lower-growth fund options.
Among the data was the finding that a woman earning the median wage for her age, who had saved into a conservative fund since the age of 20 when KiwiSaver was launched, could have built up a balance of $46,878. But the average balance for women aged 31-35 was $27,738 lower than that. For men, balances were about $30,000 lower than would have been predicted.
“The gender pay gap, being more risk-averse and taking time out of your career to have kids can mean women’s KiwiSaver balances are lower,” says Bennett. “On top of that, you are everything to everyone in your life. Your focus is often on your family, your friends, your work, your household.
“But what about you? Sometimes, you just need someone you can trust to lend a hand.”
More women are opting out of making any KiwiSaver contributions at all – 22 per cent versus 16 per cent for men. With the current market volatility, those people, will be missing out on the benefits of buying into the market at reduced prices, says Bennett.
“We can also see the gender gap is more serious for women closer to retirement age,” she says. “Women in their 50s have 32 per cent less in their KiwiSaver accounts than men – and that can mean women end up with hundreds of thousands of dollars less to retire on.
Milford is here to help, she says: “We have the tools to help people manage their money and plan their future. We also invest our own money in the same funds as our clients, so you know we are motivated to see you do well, because we’re on the journey with you.
“We are an award-winning fund manager with a range of options for both your KiwiSaver money and general investing, and our investment funds only require a minimum of $1000 to get started.”
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