Saving for retirement a priority

Saving for retirement should be top priority for those in their 40s and 50s, especially because New Zealand's superannuation scheme may not be around forever, Age Concern Wanganui warns.

Branch manager Tracy Lynn said Wanganui residents need to understand the importance of managing their savings into retirement.

"Our core age group is 60 to 65 plus ... so all we can do is ask people in that younger age group to seriously look at the management of their retirement finances ... especially because we don't know what is going to happen with superannuation," Mrs Lynn said.

Figures obtained from Inland Revenue show about 76,000 Wanganui and Taranaki workers have now signed up to the Government's voluntary KiwiSaver scheme.

Retirement Commissioner Diana Crossan warned against relying solely on the superannuation allowance. "People that work should understand that unless they put savings aside themselves they could end up living off New Zealand super alone and that's really tough.

"It means fish and chips are a treat - and if you don't want life where fish and chips are a treat then you should start doing something early."

The KiwiSaver scheme was an easy and convenient way for employees to save for later years, Ms Crossan said.

At the end of August more than 2 million New Zealanders had signed up, with more than $12 billion invested.

Individual workers have saved more than $5 billion since the scheme's 2007 introduction. Government contributions total $4.88 billion and employers' contributions more than $2.7 billion.

Ms Crossan said planning for retirement was about weighing up current options with future pay-offs. "There are times in your life when you have to make these decisions about how you manage your money differently."

About 8 per cent of New Zealanders aged over-65 lived in hardship, of which many were renting their homes, she said.

Other figures show about 250,000 people have opted out of KiwiSaver since it was introduced and just over 5000 people have turned 65 and withdrawn funds for retirement.

More than 80,000 others had taken contribution holidays as at the start of September. A contribution holiday can be taken by someone who has been on the scheme for 12 months and wants a break from saving. APNZ

KIWISAVER

Wanganui and Taranaki savers: 76,909 participants

Total savers nationwide: 2,002,840 participants

65-plus withdrawals: Just over 5000

Number of people on a contribution holiday: 86,468 as at September 5

Source: Inland Revenue