More specific guidance is needed from advisers if clients are to have the income they require in retirement.

Let us cut to the chase, KiwiSaver was formed to ensure New Zealanders could self-provision for retirement.

Its predecessor, NZ Super, which relies on tax payers funding the generation ahead of them, is failing.

One need only reference the Westpac-Massey-Ed Centre’s annual Expenditure Guidelines study to see NZ Super’s current “inflation adjusted” payment level does not meet a “no-frills” lifestyle, or The Treasury’s projection that 27% of the population will be 65+ in 2060, up from 15% today.

Only 58% of the population is expected to be between 15 – 64 meaning every retiree will be supported by just two working age people. Today there are 4.3 working age people per each retiree (1).

About the only people not to acknowledge it are the politicians.

Financial advisers, unfortunately live in the real world and must face reality on almost a daily basis.

It is therefore amazing that after nine years, and $55 billion of savings in, the most basic question: “What contribution rate should I have in order to retire?” is too often met with a blank stare, or worse, a swift change of subject to which of the 252 funds (2) on offer is superior to the others based on a nuanced and technical difference in returns, fees, service, active, passive, or all of the above; the industry’s smoke-screen for, “I’ve no idea”.

Another industry favorite is “well, it depends” which is, as we will see, kind of true, but equally unhelpful when helping an individual select their contribution rate.

The current statutory minimum for an employee is 3%.

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