Reliance on KiwiSaver to buy a first home or survive financially, has grown in the past year.
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The Financial Markets Authority's (FMA) annual report on the retirement savings scheme, showed withdrawals from retirees, first-home buyers and people in significant financial hardship increased by $229 million.
In the past year, more than 32,000 savers withdrew an average of $22,500 to put towards a property, totalling $723m compared with the previous year's $614m withdrawn.
People in significant financial hardship withdrew $101m, 25 percent more than in 2017.
The FMA's director of regulation Liam Mason said that proved saving for retirement was difficult.
"Unfortunately, affordability of retirement savings is a real issue, and that's one of the things that we need to be very sensitive to," he said.
The total amount in KiwiSaver schemes grew to $48.6 billion in the year, up from $40.7b the year before.
A breakdown of investment interests showed most of the funds were used to buy shares in offshore companies.
Return on investment increased 17 percent to $3.2b in the year, and with that management fees increased 0.6 percent.
The Crown, employers and savers all contributed more toward KiwiSaver in the year, with increases in both lumpsum and voluntary payments.
The FMA was pleased membership in default funds decreased and the number of savers actively switching funds increased, following its crackdown on providers.
However, Mr Mason said providers could still do better.
"We've engaged with firms where we considered they needed to improve," he said.