Latest news with #TomHartmann
RNZ News
22-07-2025
- Business
- RNZ News
iwiSaver hardship withdrawals boom
Photo: RNZ More than 50,000 people made withdrawals from their KiwiSaver accounts on the basis of hardship in the year to June - compared to about 18,000 five years ago. KiwiSaver provider Simplicity chief economist Shamubeel Eaqub said the increase started in 2023 and the reasons were easy to understand - the recession and cost-of-living crisis were putting ongoing pressure on people's budgets. "But some context - the number of hardship withdrawals were 1.6 percent members, and 0.3 percent of savings. The hardship, as is true for the wider society, is concentrated pain among a few," Eaqub said. Sorted's personal finance lead Tom Hartmann told Nine to Noon, it was likely the ability to withdraw from KiwiSaver was giving people "peace of mind" that if their situation worsened they could draw on their savings. Kiwisaver hardship withdrawals data from Simplicity. Photo: SIMPLICITY / SUPPLIED He said the average withdrawal was $8800. For someone in their 30s, earning $75,000 a year, a withdrawal of that size in a year could reduce their not-inflation-adjusted final balance by about $40,000. Hartmann said there had not been an increase in savings suspensions, which indicated that the withdrawal was a temporary stop gap for people who would get back to making contributions. Sorted's personal finance lead Tom Hartmann. Photo: Supplied People can opt to stop contributing to KiwiSaver for a year at a time, and can renew the suspension at the end of the 12 months. The number of people on a savings suspension had dropped from 89,000 a year ago to 85,000. Hartmann said the key thing for people considering a withdrawal was to make it a last resort. "Typically there are other sources of support that need to be explored first." Financial helpline MoneyTalks was one option, he said. "The team there have reporting seeing an increase in even middle-income people exploring their options." Eaqub said for people making a withdrawal, it was often a choice between "certain hardship today versus more savings later in life". "Many low-income people do not contribute to KiwiSaver, because the employee contribution lowers their take home pay. But they also miss out on the employer contribution and government subsidies. It means when non-contributors face hardship, they do not have this fallback." But Rupert Carlyon, founder of Koura KiwiSaver, said people on lower incomes could build up good balances. "Someone earning $60,000 contributing 3 percent will end be putting in [about] $3500 per year, so over 10 years plus returns that really adds up. "You can easily see a $60,000 salary becoming a $45,000 balance over 10 years. That is the power of KiwiSaver, we are often encouraging people to save that would not otherwise do it." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
22-07-2025
- Business
- RNZ News
KiwiSaver hardship withdrawals boom
Photo: RNZ More than 50,000 people made withdrawals from their KiwiSaver accounts on the basis of hardship in the year to June - compared to about 18,000 five years ago. KiwiSaver provider Simplicity chief economist Shamubeel Eaqub said the increase started in 2023 and the reasons were easy to understand - the recession and cost-of-living crisis were putting ongoing pressure on people's budgets. "But some context - the number of hardship withdrawals were 1.6 percent members, and 0.3 percent of savings. The hardship, as is true for the wider society, is concentrated pain among a few," Eaqub said. Sorted's personal finance lead Tom Hartmann told Nine to Noon, it was likely the ability to withdraw from KiwiSaver was giving people "peace of mind" that if their situation worsened they could draw on their savings. Kiwisaver hardship withdrawals data from Simplicity. Photo: SIMPLICITY / SUPPLIED He said the average withdrawal was $8800. For someone in their 30s, earning $75,000 a year, a withdrawal of that size in a year could reduce their not-inflation-adjusted final balance by about $40,000. Hartmann said there had not been an increase in savings suspensions, which indicated that the withdrawal was a temporary stop gap for people who would get back to making contributions. Sorted's personal finance lead Tom Hartmann. Photo: Supplied People can opt to stop contributing to KiwiSaver for a year at a time, and can renew the suspension at the end of the 12 months. The number of people on a savings suspension had dropped from 89,000 a year ago to 85,000. Hartmann said the key thing for people considering a withdrawal was to make it a last resort. "Typically there are other sources of support that need to be explored first." Financial helpline MoneyTalks was one option, he said. "The team there have reporting seeing an increase in even middle-income people exploring their options." Eaqub said for people making a withdrawal, it was often a choice between "certain hardship today versus more savings later in life". But he said the situation was worse for those without KiwiSaver. "Many low-income people do not contribute to KiwiSaver, because the employee contribution lowers their take home pay. But they also miss out on the employer contribution and government subsidies. It means when non-contributors face hardship, they do not have this fallback." But Rupert Carlyon, founder of Koura KiwiSaver, said people on lower incomes could build up good balances. "Someone earning $60,000 contributing 3 percent will end be putting in [about] $3500 per year, so over 10 years plus returns that really adds up. "You can easily see a $60,000 salary becoming a $45,000 balance over 10 years. That is the power of KiwiSaver, we are often encouraging people to save that would not otherwise do it." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
26-06-2025
- Business
- RNZ News
Retirement Commission launches a new calculator to help make savings last
Photo: 123RF There is a lot of advice to help you work out how much you have to save to have a comfortable retirement, but not such much publicly available about how to spend your nest egg. But the Retirement Commission has now launched a new of tool - a first of it's type that is available free- to help you work out how much you can spend and when to make your KiwiSaver and other funds last. The Retirement Navigator - as it's called - is being described as a one-of-a-kind tool for spending in golden years. The Commission's Personal Finance Lead is Tom Hartmann.
Scoop
15-06-2025
- Business
- Scoop
New Sorted Retirement Navigator A One-Of-A-Kind Tool For Spending In Golden Years
A groundbreaking new Sorted tool has been released to help New Zealanders nearing or already in retirement feel more confident about their financial future and how to plan for it. Launched by Te Ara Ahunga Ora Retirement Commission, the retirement navigator is free to use on Working out how to turn a saved lump sum into a steady income to live on in retirement is a financially and mathematically challenging task. Partnering with the Retirement Income Interest Group (RIIG) of the New Zealand Society of Actuaries (NZSA), the Retirement Commission has created a customisable tool that takes care of the calculations. Based on extensive modelling and drawdown 'rules of thumb' created by the RIIG, the retirement navigator addresses a common dilemma – how not to spend too much and run out of money or spend too little and unnecessarily compromise quality of life. Taking into account people's invested savings (for example, KiwiSaver) and NZ Super, the tool helps users determine the optimal income they can draw down over their retirement. By adjusting variables such as when they expect their retirement to start and their desired lifestyle, people can see how long their savings might last in different scenarios. Sorted's new retirement navigator is the first digital tool of its kind to be built by the Retirement Commission, and the first entirely new Sorted tool in several years. There are currently no other publicly available tools like it. 'There's a lot at stake for retirees when they start living off their invested savings,' says the Retirement Commission's Personal Finance Lead Tom Hartmann. 'They don't get any practise at it, or the option to go back in time and grow that money all over again. There are uncertainties about how long they'll live, how high prices will rise with inflation, how investment markets will do, and how much all of this will shape their lifestyle. 'It's been such a privilege to work alongside the RIIG actuaries and bring their modelling to life to enable people to forward plan. The retirement navigator puts it to real use for pre-retirees and retirees, so they can plan their spending wisely.' Recognising that retirement takes different shapes and forms, the new tool offers four rules of thumb to match personal preferences and lifestyles: * The Inflated 4% Rule: For those who are concerned about longevity and want to leave an inheritance. * The 6% Rule: For those wanting to spend more in their early retirement years. * The Life Expectancy Rule: For maximising income throughout retirement. * The Fixed Date Rule: For those planning to rely on NZ Super after a certain period. Each option comes with clear guidance and practical solutions to real-life financial challenges. The NZSA's Ian Perera, Convenor of the RIIG says, 'We're thrilled to see our work on rules of thumb for drawdown come to life thanks to Te Ara Ahunga Ora Retirement Commission. 'We always hoped people thinking about their retirement would find our work helpful, and the Sorted retirement navigator tool takes it to the next level of access and understanding. Moving from accumulating savings to drawing them down is not straightforward. We admire how Sorted's experts have embraced our actuarial work while making the retirement journey as easy to navigate as possible.' Sorted's retirement navigator tool aims to help New Zealanders: * Effectively integrate their NZ Super with other retirement savings * Make more informed decisions about their savings * Better understand their options for creating sustainable retirement income * Adapt their spending strategies as circumstances change * Approach and enjoy retirement feeling less stressed and more secure. Potential applications include use by KiwiSaver providers and financial advisers throughout Aotearoa when offering tailored guidance to clients and customers. Although intended for those who are nearing or already in retirement, the retirement navigator can be useful to people of any age who wish to examine how they might best manage their projected savings. Those who are more than a decade away from stopping paid work can forecast how much they're on track to have by using Sorted's existing retirement calculator and KiwiSaver calculator. To try the new retirement navigator, visit About Sorted and the retirement navigator Driven by Te Ara Ahunga Ora Retirement Commission to improve New Zealanders' financial wellbeing through accessible, actionable, relatable financial education, Sorted offers a range of free digital tools and calculators. Click here to view them: To read the new guide to using the retirement navigator, click here: About the New Zealand Society of Actuaries The New Zealand Society of Actuaries (NZSA) is the professional body for actuaries practising in New Zealand. It supports a highly specialised pool of around 400 members, of which around 250 are fully qualified actuaries. It sets, maintains and upholds actuarial professional standards and conduct, and supports members as they advance their skills and knowledge. NZSA also contributes to the development of actuarial thinking and its application through thought leadership activities, and provides a source of reference on actuarial matters for government and other interested bodies. NZSA's Retirement Income Interest Group (RIIG) provides a forum for Society members' concerns and ideas relating to retirement income, longevity and related issues. The RIIG has published significant work on retirement income including its drawdown 'rules of thumb'. See the RIIG's work here:
RNZ News
12-05-2025
- Business
- RNZ News
Kiwisaver figures show more withdrawals for hardship than homes
Photo: 123RF Retirement savings are increasingly being used to supplement people's incomes, with the number of financial hardship withdrawals now surpassing the number for withdrawals for first home deposits for the first time. Inland Revenue data shows in each of the past nine consecutive months the number of withdrawals for hardship reasons was higher than the number of a home deposit. The data shows prior to 2023 first home deposit numbers clearly outstripped the numbers of those in hardship, but that this gap started to close during 2023. The most recent data for March shows 4.980 hardship withdrawals and 4,190 first home deposit withdrawals. Tom Hartmann is Personal Finance Lead at which is run by the Retirement Commission.
