Go on, live a little

young people to think it is the end of the world if their Kiwisaver is not busting at the seams.

‘‘No one should be living their life deprived today to make themselves comfortable at 65, that makes no sense.’’

BNZ chief economist Tony Alexander says Kiwisaver is not the be-all and end-all of living a good life.

Saving for when you punch out for the last time is important, but you also need to live along the way, he says.

‘‘Many people want young people to fear retirement, to fear not having any money and to act on that fear by aggressively saving as early as possible.

‘‘There are far greater priorities including enjoying yourself doing things, which become more and more difficult the older you get,’’ Alexander says.

New Zealanders are living longer and working longer than ever before, with at least 24 per cent of people aged 65 and over still in the workforce.

And Prime Minister Bill English has announced the age for national superannuation will gradually rise to 67 by 2040.

‘‘The return from spending $10,000 enjoying yourself when you’re young could well be greater than putting that money aside and using it in retirement.’’ BNZ chief economist Tony Alexander

‘‘People have more time on their side these days because come the age of 65 they’re still going to be working and won’t be solely dependent, necessarily, on superannuation,’’ Alexander says.

Having fun while you are young and having more options available is also important, he says.

‘‘As you get older your options tend to claw in on you and people tend to look back fondly at their youth and missed opportunities. The return from spending $10,000 enjoying yourself when you’re young could well be greater than putting that money aside and using it in retirement.’’

That’s a personal choice of course, but Alexander wants people to make that choice without the fear of reaching old age with just a few pennies in the bank.

‘‘There are people who have a vested interest in having you save as much as humanly possible for retirement in four or five decades’ time,’’ he says.

Moneymax financial adviser Liz Koh says there’s no point putting any more money into Kiwisaver than necessary.

‘‘When you are young you need to have a good time, travel the world if you want, then buy a house somewhere,’’ she says.

‘‘But you should put enough into Kiwisaver to get the maximum benefits, which is usually 3 per cent of your pay.

‘‘It will be really useful when it comes to buying a first home.

‘‘You should also make sure you have balance in your life – having an enjoyable life both now and in the future.’’