LET’S START THE CONVERSATION ……

Have you ever asked yourself how much money you’ll need in retirement? New Zealand Superannuation alone may not provide a comfortable or even an adequate retirement income. So, it’s important for everyone to do what they can now to put themselves in a better position for the future.

But saving for retirement isn’t easy and research from Melville Jessup Weaver1 shows the situation is even tougher for women, who arrive at retirement with on average 20% less in their KiwiSaver account. Two of the key reasons are:

  1. Women earn less – Stats NZ data shows that women’s median hourly earnings are 9.1% lower than men’s.2
  2. Women take longer out of the workforce – Females generally spend more time out of paid employment to start and raise a family or look after elderly relatives. Additionally, women make up the majority of the part time workforce in New Zealand according to the Financial Services Council.

KiwiSaver is one of the best ways to grow your savings and provide for your future. Here are a few ideas to help empower the women in your life to make the most of it:

Have confidence to ask questions about KiwiSaver – 22% of women have KiwiSaver and don’t contribute to it (compared to 16% of men). Women are also less likely to understand the value of risk in the context of investing.3 A good place to start is by asking questions and understanding that risk is not always a bad word.

Maximise your KiwiSaver contributions – Stopping contributions whilst taking time away from work to start or raise a family can have a big impact on your KiwiSaver balance over the long term. Starting good habits now such as increasing your KiwiSaver contribution rate each time you get a pay rise will help. You’ll still receive more in your hand at the end of each pay, but you’ll also be putting away funds for your future.

If you can afford it, a weekly contribution of $21 while on maternity or parental leave will ensure you get the full $521 Government Contribution added to your account each year, but if you are in a financial position to contribute more than the minimum then this will benefit you later at retirement

Seek out financial advice – Financial advice is not just for the wealthy. It’s becoming more accessible than ever, whether that’s in-person advice or through digital financial advice. Getting advice can give you more confidence and peace of mind by helping you set the right investment goals and the right plan to achieve them.

Start the conversation early – Our schools are introducing financial literacy into the learning curriculum at years 11, 12 and 13. So let’s also have conversations with our children about money and let’s share the knowledge with the next generation.
In life, relationships may come and go so we cannot rely on our partners to look after our financial decisions. Women need to take control of these decisions for themselves. Taking control does not need to be hard, all it takes is a few minutes a couple of times a year to check in on your KiwiSaver. Having a plan, speaking with a financial adviser and staying the course if nothing has changed will help you get on track to achieve your goals.

(1) Melville Jessup Weaver. KiwiSaver demographic Study. March 2022.
(2) Stats NZ. Gender Pay Gap Unchanged. 18 August 2021.
(3) NZ Retirement Commission. International Women’s Day: Mind the gender financial capability gap. March 2022.