This article was originally published on Stuff on 6 July, 2026.
KiwiSaver has every opportunity to be one of New Zealand’s great success stories. As we approach its 20th birthday, there are nearly three and a half million members enrolled with close to $140 billion in total funds under management.
Those participation figures are encouraging. The dollar figure is impressive, but overall outcomes could be better still if more of us viewed enrolment as the beginning of the journey rather than the end of it.
One of the biggest KiwiSaver risks isn’t making the wrong decision, but rather assuming you don’t need to make another one after joining.
Stuff’s Wealth of the Nation research found New Zealanders are highly engaged with their everyday finances, with 83% saying they track their spending. Large majorities also reported budgeting regularly and reviewing their finances frequently.
But KiwiSaver appears to be an exception. Despite paying close attention to their day-to-day finances, many New Zealanders leave their retirement savings largely untouched for years.
Consumer NZ research released this year found that 65% of KiwiSaver members have never changed provider and 17% don’t know what type of fund they’re in, let alone if it’s the right one.
KiwiSaver was deliberately designed to be heavily automated so that, once enrolled, saving happens largely in the background. That’s one of its greatest strengths. But automation works best when it gets people started, not when it discourages them from ever checking whether their settings still match their circumstances.
Many have put important decisions on autopilot – never reviewing their provider, contribution rate or, crucially, whether they’re in the type of fund best suited to their circumstances.
Morningstar describes asset allocation – the mix of growth and defensive assets in a fund – as one of the most important decisions people make when saving for retirement. Its KiwiSaver category averages show that over the 10 years to 31 March 2026, conservative funds delivered annualised returns of 3.9% after fees and before tax, compared with 8.9% for aggressive funds.
Over a working lifetime, that difference in annual returns has the potential to translate into a substantially different retirement balance. The point isn’t that everyone should be in a more aggressive fund. Different people have different goals, timeframes and risk tolerances. The point is simply that these decisions matter. If asset allocation is one of the most important decisions a retirement saver can make, it shouldn’t be made once and then forgotten about for the next 30 years.
Even more concerning than never reviewing your settings is not actively contributing at all, which is the case for around 30% of KiwiSaver members. The latest KiwiSaver Demographic Study, prepared by MJW for the Retirement Commission, illustrates the long-term cost of that level of disconnection: contributing members average KiwiSaver balances of $50,727, compared with $19,553 for non-contributors. That gap starts at $7,740 among younger members, but grows to more than $62,000 by ages 61–65.
Those numbers show that seemingly small decisions don’t stay small when they’re given decades to compound. A few simple check-ins and the odd readjustment can make a meaningful difference by the time retirement arrives. A larger balance provides greater flexibility, whether that’s travelling more, covering unexpected expenses, pursuing hobbies, spending time with family or simply enjoying greater financial freedom in retirement.
A similar pattern extends beyond saving itself. Stuff’s Wealth of the Nation research found more than a quarter of working-age New Zealanders are unsure what they’ll do with their KiwiSaver at 65, while another 18% expect to withdraw it all as a lump sum. That suggests that for many, financial planning appears to stop short of thinking through how their savings will actually support them in retirement.
Taken together, the research points to the same conclusion: many New Zealanders actively manage their everyday finances but leave their retirement planning on autopilot.
Fortunately, unlike many retirement challenges, this one doesn’t necessarily require new legislation, government spending or radical reform to overcome. It requires better engagement with a system that already exists.
That starts with education.
We don’t have to turn every New Zealander into an investment expert. We simply have to ensure they understand a handful of the fundamental concepts: the types of KiwiSaver funds available, why risk and return are linked, how investment time horizons affect those choices, and why those decisions deserve to be revisited as life changes.
The right fund at 25 may not be the right fund at 45, and the right fund at 45 may not be the right fund a few years out from retirement. Careers progress, incomes rise, families grow, mortgages shrink and retirement moves closer. KiwiSaver doesn’t need constant attention, but it does deserve attention when life changes.
Improving financial literacy is one of the rare issues where almost everyone has an incentive to pull in the same direction. Better-informed KiwiSaver members are more likely to make decisions that improve their long-term financial outcomes, which benefits not just those individuals, but New Zealand as a whole.
KiwiSaver was designed to do the heavy lifting automatically. But the best retirement outcomes still come from checking in occasionally, seeking advice where appropriate, and making sure the settings remain right for your circumstances.
Joining KiwiSaver is an excellent first step. It just shouldn’t be the last one.
Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as financial advice. You should not rely on any information in this communication in making financial decisions. Before making financial decisions you may wish to seek financial advice. Milford Funds Limited is the Issuer of the Milford KiwiSaver Plan. Please read the Milford KiwiSaver Plan Product Disclosure Statement at milfordasset.com
