Putting away even the maximum 8 per cent KiwiSaver contribution isn't going to be enough to ensure a comfortable retirement.

This is according to the Financial Services Council, which says Kiwis should save a minimum of 10 per cent of their yearly earnings to help close the gap in retirement shortfall.

The not-for-profit organisation which represents investment and insurance companies today released a report, Shaping Futures: Closing the KiwiSaver Gap, based on three pieces of research which looks at the KiwiSaver gap - what is saved and what is needed for a comfortable retirement.

The report reveals there is a considerable way to go to close the gap, particularly for millennials, who are reliant on KiwiSaver as their main source of income when planning for retirement.


FSC chief executive Richard Klipin recommended Kiwis save between 10 and 15 per cent of their annual earnings to put away for retirement.

"Managing money is a skill," Klipin said. "Think about the future and don't underestimate the savings you will need."

Saving between 10 and 15 per cent of earnings would ensure a good long-term financial wellbeing, he said.

The report states KiwiSaver in its current form is not enough to meet the needs of many retirees, and would not be even if they had been able to contribute for longer.

Kiwis have invested around $50 billion dollars since KiwiSaver began 10 years ago.

FSC says the Government needs to review the rules on default fund allocation and incentives.

Insights from more than 2000 surveyed New Zealanders reveals the financial fears of younger generations are a reality with retirees.

New Zealanders aged 65 and over said they had an average weekly retirement funding shortfall of $218, to live comfortably, while those aged between 18 and 24 both said they estimate they would have a weekly shortfall of $205 in retirement.


Most millennials were found to be reliant on KiwiSaver to fund homeownership and retirement, and two-thirds were scared of being unable to afford retirement.

Around 70 per cent of all respondents said they would support increasing Kiwisaver base contribution from the current 3 and 4 per cent.

Increasing base employer and employee contributions from 6 to 8 per cent would create a 28 per cent increase in savings over a 45-year period, the report stated, and with a 10 per cent contribution savings would increase by 56 per cent.

Based on a median salary of $48,000 and 6 per cent KiwiSaver contribution, a person will save $141,813 over a 45-year period, increased to 8 per cent, savings jump to $181,233.

A 10 per cent KiwiSaver contribution will result in $220,653 over the same period.

Commission for Financial Capability's personal finance expert Tom Hartmann said most New Zealanders were on track to "not achieve" a comfortable retirement.

"A lot of people are in KiwiSaver thinking that they've got their retirement sorted and so they are not aware that there could be a gap or what they are on track to achieve," Hartmann said.

"The trick is to figure out how big your gap is and ways to fill it. KiwiSaver is a partial solution."

Not everyone would have a shortfall in what they need, Hartmann said.

"The call for higher contributions rates will get people better results, whether it will help entirely close that gap or whether it will go right past that gap of what's necessary depends on a few different variables."

Research shows Kiwis would welcome automatic gradual KiwiSaver contributions increases.