What next for KiwiSaver

Coming back to decumulation - with the growing amount of money sitting there at age 65 through KiwiSaver, why do you think it’s taking so long for providers to include an option for members at that stage?

KiwiSaver is pretty immature. The world over, decumulation – as it’s called – hasn’t been solved. In New Zealand, we’re 10 years into KiwiSaver and people are retiring with balances of between $20,000-$40,000. My problem today is that with $40,000, if you’re given your decumulation product, you might get $5 a year. It’s not really going to help.

Would you say the balance needs to be around $100k?

With a balance of $100k you are seriously able to spread that over the life of your retirement. About one-third of members take their money out at the age of 65. We see another one-third taking a regular withdrawal from their KiwiSaver account. A lot of people actually continue to invest in KiwiSaver and add to it. I guess they’ve seen the benefits of saving through KiwiSaver. It’s really important that, when people hit 65, they ensure that they know their timeframe of future spending, to make sure that they are appropriately investing.