More than a third of Kiwisavers are withdrawing their funds when they hit retirement and spending it on cars, boats and home improvements - as revealed in a recent Retirement Commission survey.

It's scary but not surprising.

Of the people who withdraw their funds, 61 per cent are spending some of it on a holiday, 37 per cent on home improvements or housing and 32 per cent on a boat or a new car.

While people are justified in having some fun, the figures do highlight what we know already; that we are a "fritter nation".

Statistics show us that we pretty much spend everything we earn, and are useless at saving when we are working. It is of no surprise, that people continue this behaviour into retirement.


If you are in your late 40s, 50s or even early 60s, you need a retirement plan. You need to know how much money you are going to end up with when you retire, and you need to know how much you need. For many people this calculation is tricky because you need to factor in so many variables. In fact when I am determining this for my clients it takes my team up to 10 hours to model different scenarios, and we are financial advisors.

One of the reasons that it takes so long is that everyone has a different situation and goals. The nuances of one's life are what make a plan sustainable. But whether you work with me or someone else, you must address retirement. The money is going to run out. Do you know when? Do you know what you will do then?

You don't need to do the calculations/scenarios yourself, but have someone do it for you. Make sure they charge an hourly rate and that they are not endorsing one product over another. Doing nothing, is actually taking action. It is a decision/action to ignore the looming problem of ....the money is going to run out.

What's wrong with Kiwisaver?
In my opinion, the short coming of Kiwisaver is that a lot of the money comes from other people (Government and employer). It is almost "free" money. While the notion of this is encouraging, the psychology of receiving "free money" is that you tend to be more careless with it. Easy come easy go. For many of us, our Kiwisaver balance is one of the most sizable "windfalls" we will receive. It remains one of the main "helping hands" we will get to help fund our retirement. Yet, because no one really is paying attention to the issue of retirement, this "helping hand" is translated as a "gift".

Things you need to do well before retirement
- Be mortgage free
- Know how much your lifestyle will cost in retirement
- Yes, I get that everyone wants to go on a holiday every year - but how much is this going to cost you?
- Can you make decisions now to make life easier and more enjoyable in retirement?
- How much money do you want to leave to your children?
- How long do you want to work?

Take the time, or pay the money to sort this. Take the control back so you can enjoy your lifestyle this side of retirement, knowing that the other side is going to be just as enjoyable.

It is never too late to start.

Hannah McQueen is the Founding Director at enableMe Financial Consultants