By David Chaplin
Copyright investmentnews
About two-thirds of New Zealanders have produced some sort of retirement plan, according to a new InvestNow survey.
But the positive indicator of retirement preparedness is undercut by the fact the more than half of those surveyed remain unsure whether their plan has legs.
According to the poll of about 1,300 Kiwis (including almost 800 InvestNow members), only 48.7 per cent of respondents had much confidence in their retirement plans – down from 50.4 per cent in the inaugural study conducted six months ago.
“It is an interesting proposition that most people who make a retirement plan are not confident it will work,” the report says.
However, the survey found a large disparity in retirement plan confidence between InvestNow members and the general public: almost 70 per cent of investors on the platform were happy with their retirement planning compared to just 14 per cent of non-customers.
InvestNow members were also more likely to have a formal retirement plan (83 per cent) compared to general public respondents (42 per cent).
Almost all of those surveyed, though, regardless of platform status intend to create a retirement plan with only a small minority ticking the ‘never’ box.
“… we can conclude that many people recognise making a plan is important,” the report says. “However, due to apathy, complacency or other factors, they haven’t done it yet. For these people, the challenge appears having some sort of trigger moment to get them to actually make a plan.”
Roughly a third of general public respondents prefer using a financial adviser to create a retirement plan – the most popular option for this cohort – followed by friends or family (30 per cent).
By contrast, InvestNow customers rated articles (26 per cent) as the most valuable retirement planning resource with financial advisers a close second-pick on 23 per cent.
The core NZ retirement savings vehicle of KiwiSaver, however, gets a vote of no-confidence in the study – at least as a full lifestyle-sustaining option.
Some three-quarters of InvestNow clients and almost two-thirds of general public members tapped for the survey expressed “either little confidence or no confidence at all” that KiwiSaver would “enable them to live the retirement lifestyle they want”.
Mike Heath, InvestNow general manager, said the study highlights some challenges that lie ahead for New Zealanders as they ready for life post work.
Nonetheless, Heath said the data shows most people recognise the need to plan for retirement even if they don’t know how or delay action.
He said the six-monthly survey is intended to uncover more long-term trends as it repeats over the coming years.
Founded in 2017, the Apex Group-owned InvestNow investment platform has more than $2.6 billion under management including almost $500 million in its KiwiSaver scheme.
The in-house Foundation Series suite of diversified funds and portfolio investment entity versions of popular global exchange-traded funds now has more than $1 billion under management, Heath said.
