Mike's Minute: Your retirement savings are in your own hands

There was a survey out last week that broadly supported the Government’s moves around KiwiSaver, as in the 3% and 3% going to 4% and 4%. 

But they wanted the Government to do something about the cut in contribution from the state. 

Small hint – if you rely on the Government for any consistency around long term projects, forget it. 

From the very beginning of KiwiSaver, the Government were always going to be the weak link. 

When it comes to big picture stuff, dedication and focus from a government is a casualty of the three year political cycle. They were never going to be our friend on retirement savings. 

The best advice I offer anyone, including our kids, is do it yourself. It's your life, your decision and your future, so do it yourself. 

To show you how hopeless we are at saving in this country, figures released last week in America showed their KiwiSaver, what they call their 401k, hit a record high at 14.3%. 

So while we are mucking around on 3-4% they are up to over 14%. 

Here is the kicker – the industry says it really should 15% if you want to be comfortable. 

A psychological step change is required and I'm not sure we will ever get there. 

Whether its employer contributions that get offered instead of more pay, or whether it’s the Australian style compulsion, a lot of countries do it a lot of different ways and most of them have dealt with the age of retirement as well. 

We basically are stuck with 65-years-old, and angst around even a debate about changing it, and far too many people who get to retirement and are stuck with a state-funded payout that has never been good and will not serve you well, if it's all you have to live off. 

There is of course no reason for this to even be a problem. Lee Kuan Yew many years ago in Singapore took a third world country, told them to save, forced them to save, and now they are rich. 

The answers are all there. Australia has it sorted, the Norway fund is famous, and even the Americans at 14.3% seem to have it solved. 

We need to look and learn and then get our act together and apply a bit of basic discipline to our long-term futures that don’t rely on a government. 

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Episode Transcript

Speaker 1 (00:00):
We've got a survey out in the last couple of days.

(00:01):
It broadly supported the government's moves around key we saver.
That's the three and three, the four and four. You
know your three percent contribution employers three percent going to
four percent. But they wanted the government in the survey
to do something about the cut and contribution from the state.
That that change came into effective course this week. Small
hint for you if you rely on the government for
any consistency around long term projects, forget it. Government from

(00:22):
the very beginning of key we Saver was always going
to be the weak link dedication and focus from government
when it comes to big picture stuff is a casualty
of the three year political cycle. They were never going
to be our friend on retirement savings. The best advice
I offer anyone in fact, including our kids, do it yourself.
It's your life, your decision, your future. Do it yourself now.
To show you how hopeless we are at saving in

(00:44):
this country, figures released last week in America showed their
key we sab, what they call their four oh one
K hit a record of fourteen point three percent. That's
on average, most Americans put in fourteen point three percent
into their savings. So while we're mucking around on three
and four, they're up to fourteen. And here's the kicker.
The industry says, look, it really needs to be over
fifteen if you want to be comfortable, so a psychological

(01:07):
step change is required, and are not sure we're ever
actually going to get there, whether it's employer contributions that
get offered instead of more pay, or whether it's the
Australian style compulsion. A lot of countries do it a
lot of different ways, and most of them have dealt
with the age of retirement as well. We are basically
stuck with the sixty five and this angst around even
having a debate about changing it, and far too many

(01:28):
people who get to retire it are stuck with a
state funded payout that has never been good and will
not serve you well. If that's all you have to
live off. There is of course no reason for this
even even to be a problem at all. Lequon you
many many years ago, and Singapore took a third world country,
told them to save, force them to save, and now
they're rich. The answers they're all there. Australia's got it sorted.
The Norway funder is famous. Even the Americans at fourteen

(01:50):
point three percent, seem to have it solved. We need
to look and learn and then get our act together
and apply a bit of basic discipline to our long
term futures that doesn't rely on the guff. For more
from The Mic Asking Breakfast, listen live to News Talk
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