With the economic hardships affecting New Zealand families today, when it comes to maintaining financial wellness at work and within our whānau, we find ourselves constantly sailing through unpredictable waters.
As experts in the industry, Footprint NZ is passionate about providing Kiwis with the guidance and resources they need to improve their financial wellbeing and resilience.
In a recently published article, Footprint spoke out about the state of financial wellbeing in New Zealand, elaborating on the surprising risks that threaten the thousands of kiwi families tied up in KiwiSaver schemes today.
Footprint states that the number of people of retirement age who are still renting or making mortgage payments is increasing.
While in the 1990s, 83% of seniors aged 65+ owned a mortgage-free home, in 2020, 13% of seniors are renting and another 13% are still paying off mortgage, and among adults within 10 years of retirement, only 38% own a mortgage–free home.
The article states that because the KiwiSaver scheme was only established 13 years ago, many seniors today have not had enough time to build up their savings to reap the benefits of the scheme when they do retire. Many seniors also end up cancelling their life insurance policies as the pricing becomes unaffordable.
However, although “cutting costs” and cancelling may seem like the best choice at the time, this means trouble if someone were to die unexpectedly with no valid Will in place. Families could end up being tied in legal proceedings for up to 18 months while the uninsured assets of their recently passed loved ones are stuck in legal red tape.
Not only are these situations time-consuming and stressful to deal with, but they are also costly. For a surviving spouse in need of financial aid, they may not be able to liquidate their assets to support their basic living costs until all proceedings have been completed.
Footprint states that while there continues to be a risk that KiwiSaver funds can be trapped in court legalities, the KiwiSaver scheme will continue to be limited in its ability to support a better standard of retirement living in New Zealand.
On top of this, with financial hardship increasing throughout the country, Kiwis between the age of 25 to 44 may have the most to lose from intestacy. Many people in need of financial aid are resorting to using their KiwiSaver funds. Furthermore, people within this age bracket are also plagued by the highest levels of personal and household debt and generally have lower levels of financial resilience than older generations.
As a nation, New Zealand also has a bad habit of avoiding end-of-life preparation. No matter the age, if there is no Will, receiving claims, sorting out personal assets, shared assets, and more, becomes a complicated and costly affair, which is the very last thing anyone dealing with loss wants to experience.
Footprint elaborate that having life insurance, and a legally valid Will in place is something that every person and their family will benefit from, no matter if they are 18 or 65 years old. If a person has a KiwiSaver balance of $15,000 or more, then creating a Will is a step they should consider.
For those ready to take the plunge to fortify their financial resilience and make a will online, contact Footprint today to learn how easy, quick, and affordable creating a Will can be. Learn all about improving financial wellness and more at https://www.footprintconnect.co.nz/
