5 tips to help you navigate your retirement savings in 2024

by | 21 Aug, 2024 | Financial Planning

The global economic outlook is uncertain. While some major markets are optimistic (possibly overly so), predicting inflation control, lower interest rates, and stable corporate earnings, others are more cautious. Here in Aotearoa New Zealand, persistent domestic inflation including council rates and energy costs, remains a concern. There are doubts about how quickly interest rates will fall, and questions around the stability of corporate earnings. Recent weak growth statistics and geopolitical uncertainties, such as Middle East conflicts, US-China tensions, and the upcoming US election, also contribute to market volatility. In light of these uncertainties, we believe that focusing on effective retirement saving is more important than ever.

Here are five tips to help you navigate your savings strategy during these challenging economic times:

  1. ESTABLISH AN EMERGENCY SAVINGS ACCOUNT

Everyone should have a separate savings account specifically for emergencies. Economic hardships can increase the impact of unexpected expenses, making it vital to have a financial safety net. Setting up a regular automatic payment from your main account to an emergency fund can ensure consistent savings. Even small amounts add up over time.

Consider using an account that discourages withdrawals, through fees or reduced interest when money is withdrawn, which can help you resist the temptation to dip into your savings except in real emergencies.

There are even call account and other deposit account options in a Christian savings environment, at Christian Savings.

  2. MAINTAIN YOUR KIWISAVER CONTRIBUTIONS

Despite economic pressures, it’s essential to stay disciplined with your KiwiSaver contributions. Your future self will thank you! The power of compound interest means that your savings can grow significantly over time, making early and consistent contributions very helpful.

The Sorted website gives an example where if you invest $2000 annually into a fund that invests mainly in shares and that averages 5.5% returns annually (after fees and tax), starting at age 18, you could see your investment grow to approximately $362,562 by age 65. However, starting later reduces the benefits of compounding. Even if you start at age 42, your savings will grow, but to a lesser extent. To learn more about the power of compound interest, see the Sorted article here.

The key is time, so keep up your contributions regardless of your age. Remember Proverbs 13:11, … whoever gathers money little by little makes it grow.

  3. REVIEW AND REDUCE DISCRETIONARY SPENDING

Before ever considering reducing your KiwiSaver contributions, we recommend you evaluate your discretionary spending. Identifying and cutting back on non-essential costs can help you maintain your retirement savings without compromising your future financial security. Let the power of compound interest work for you by prioritising your KiwiSaver contributions over and above less critical spending.

  4. AUTOMATE YOUR SAVINGS

Automation can be a powerful tool in ensuring consistent saving habits. Setting up automatic transfers to your emergency account, and, when you can, automating regular additional contributions to your KiwiSaver, can help you stay on track without having to think about it every payday. This method can also help you avoid the temptation to spend money that should be saved.

We even found a Scripture that is applicable to regular, automated savings, in Proverbs 6:7-8, The ant has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.

  5. SEEK GUIDANCE AND STAY INFORMED

Staying informed about economic conditions and seeking guidance can help you to make sound investment decisions. To ensure that your KiwiSaver fund matches your unique financial situation, it’s important to periodically review your fund to make sure it fits your risk tolerance, investment timeline, and ethical principles. The Christian KiwiSaver Scheme website can direct you to resources to help you work out your risk profile and therefore whether you are in the right fund for you. The Christian KiwiSaver Scheme can support you in aligning your Christian values with your investment goals.

In 2024, staying focused on your retirement savings is more important than ever. By taking these steps, you can navigate economic challenges and save for a comfortable retirement while staying true to your faith.

You can read more about the Christian KiwiSaver Scheme and our Ethical Investment Policy here: https://christiankiwisaver.nz/ethical-investing/

A closer look at the unique demographics of Christian KiwiSaver Scheme members

by | 8 Aug, 2024 | Events and News, Financial Planning

KIWISAVER DEMOGRAPHICS STUDY 2023

In February 2024, Melville Jessup Weaver (MJW), New Zealand’s largest firm of consulting actuaries, released its annual KiwiSaver Demographic Study for the Retirement Commissioner. This study, now in its third year, aims to collect comprehensive data on KiwiSaver scheme members to guide the Commissioner in making informed retirement income policy recommendations to the Government and to enhance resources on the Sorted website.

The study covered 98% of the total KiwiSaver member base, providing invaluable insights into the diverse landscape of KiwiSaver schemes in New Zealand.

A JOURNEY TO A BETTER RETIREMENT

The Retirement Commissioner’s purpose is to empower the people of Aotearoa New Zealand on their journeys to a better retirement. By leveraging the detailed data collected by MJW, the Commissioner can better understand the demographics of KiwiSaver scheme members and tailor recommendations and resources accordingly.

KEY INSIGHTS FOR THE CHRISITAN KIWISAVER SCHEME

The Christian KiwiSaver Scheme is dedicated to serving Christians and those working in Christian organisations, ensuring that their investments reflect their faith and commitment to God’s purposes. As a participating provider in the study, we received a tailored set of data, revealing where we stand in comparison to other KiwiSaver schemes.

The 2023 study helps us to understand the unique demographics of the Christian KiwiSaver Scheme’s membership.

Age demographics

  • The Christian KiwiSaver Scheme has the highest proportion of members aged between 51 and 65 years, at approximately 37%. This is significantly higher than the average of just under 25% across other study participants.
  • We also have the highest proportion of members over 65 years, with nearly 20% of our members in this age group, compared to an average of 5% among other study participants.

These figures confirm our strong connection with older savers. Even as they withdraw amounts from their KiwiSaver accounts to support their retirement, our over-65 members continue to benefit from investment returns on their remaining funds. We are blessed to have this demographic continue their financial journey with the Christian KiwiSaver Scheme.

Gender demographics

  • Over 60% of our members are female, giving us the highest proportion of female members among all participating providers.

This statistic is a testament to our success in creating a supportive environment for women to save for their retirement in a way that aligns with their hearts and Christian principles.

Balance comparisons

  • Our female members have an average balance that is approximately 25% higher than the average female balance across other schemes.
  • Similarly, our male members also enjoy higher average balances, approximately 20% above the average for other schemes.

These findings indicate that our members are doing exceptionally well in saving for their retirement, and show the importance of starting saving early into KiwiSaver, to enjoy the benefits later on in life.

SUPPORTING FINANCIAL WELLBEING IN OUR CHRISTIAN COMMUNITY

For the Christian KiwiSaver Scheme, this demographic study highlights a focus on serving older savers, supporting women, and helping our members achieve higher balances. It reflects our commitment to aligning investments with Christian values and promoting financial well-being within New Zealand’s Christian community.

We believe it is important for everyone to take the first step and join a KiwiSaver scheme to make regular contributions towards their retirement. As Christians, we can take an extra step and choose a KiwiSaver scheme that supports our Christian values. And, in doing so we express our dedication and devotion to God through our financial lives.

Matthew 6:21

For where your treasure is, there your heart will be also.

Click the link to learn more about our Ethical Investment Policy and start your journey to a better retirement with us. https://christiankiwisaver.nz/ethical-investing