Don’t let KiwiSaver be your only safety net when you’re self-employed. Diversify your retirement savings for a secure financial future.

Relying solely on KiwiSaver can be a trap for self-employed individuals, posing unique challenges and ethical considerations. While KiwiSaver is a popular retirement savings scheme in New Zealand, its reliance may not be sufficient for those who are self-employed due to irregular income and lack of employer contributions.

One of the main challenges faced by self-employed individuals relying on KiwiSaver is the fluctuation of income. Unlike employees who receive a regular salary, self-employed individuals often experience inconsistent cash flow, making it difficult to contribute consistently to their KiwiSaver accounts. This can result in inadequate savings for retirement, especially during periods of low income.

Another challenge is the lack of employer contributions for self-employed individuals. While employees benefit from employer contributions to their KiwiSaver accounts, self-employed individuals are solely responsible for funding their retirement savings. This places a greater financial burden on self-employed individuals and may hinder their ability to save enough for retirement.

Furthermore, self-employed individuals may face ethical considerations when relying solely on KiwiSaver. In some cases, they may be tempted to prioritize their business expenses over saving for retirement, leading to inadequate savings in the long run. This raises questions about the ethical responsibility of self-employed individuals to secure their financial future.

For example, Sarah, a self-employed graphic designer, struggled to save for retirement while managing her business expenses. Despite her best efforts to contribute to her KiwiSaver account, Sarah found it challenging to save consistently due to the unpredictable nature of her income. This highlights the real-world challenges faced by self-employed individuals relying on KiwiSaver.

In conclusion, while KiwiSaver is a valuable retirement savings scheme, self-employed individuals should be cautious about relying solely on it. By understanding the challenges, opportunities, and ethical considerations associated with KiwiSaver, self-employed individuals can make informed decisions about their retirement savings. It is important for self-employed individuals to explore additional savings options and seek financial advice to ensure a secure financial future.

Source: New Zealand Herald.
Author: Nadine Higgins.
https://www.nzherald.co.nz/business/what-to-know-about-saving-for-retirement-the-prosperity-project/VIIXWNWMIZCKXAJG7UF7HPECEI/.
2025-02-16T16:00:00Z.