KiwiSaver

[Nobimmer 694]

Right,after reading 3 pamphlets and the big book about kiwisaver at work I have still got absolutly NO IDEA how the f**k it works and if it is suitable for a younger person to be doing.As far as I know,you put in the 4% or 8% of your weekly/fortnightly/monthly pay automaticly and the govt (or someone) gives you round $20 pw?

Then the Govt(or someone) gives you a $1000 bonus when you've been putting in money for x amount of months?

Only part I dont get is when you get to touch the money.It says " you can have access to your money when you are elegible for super annuation(65 currently) or after 5 years,whichever coms later". Now,does this mean after 5 years one can claim the $ back,or is it after you're 65 seeing that comes later.

After many phonecalls(which have not gone through) and looking on the net I still dont understand that one small part of WHEN I CAN CLAIM THE $$$.

Any help? Pro's, Con's, personal views?

[B*Emz 0]

Well if it says when you are eligible for superannuation or 5 years, whichever comes first, it means just that. Unless your going to be 65 in less than 5 years, you can't use the money until such a date as you ARE 65. Shibby?

That's my take on the thing anyway-

[Silver Fox 43]

You get it back when you turn 65. Only exceptions are for first home, leaving the country permanently, and dire emergencies, whatever they are. It's free money, go for it.

[Nobimmer 694]

Well if it says when you are eligible for superannuation or 5 years, whichever comes first, it means just that. Unless your going to be 65 in less than 5 years, you can't use the money until such a date as you ARE 65. Shibby?

That's my take on the thing anyway-

It says whichever comes LATER ie 2nd? ie 65?

[Nobimmer 694]

You get it back when you turn 65. Only exceptions are for first home, leaving the country permanently, and dire emergencies, whatever they are. It's free money, go for it.

Well what happens if you die at less than 65? family inherits the money?

Edited July 2, 2007 by Token

[OLLIE 26]

Well what happens if you die at less than 65? family inherits the money?

family inherits the money or what ever is in your will.

it is your money.

the government gives you tax credits of approx $1000 per year

your employer will put in an extra 4% of what your earn in a few years (but no doubt will take it into consideration when deciding your pay rate)

you can take a 'contributions holiday' whenever you like, for as long as you like but still can't touch the money until ...

you are 65, you move overseas permanently, you decide to buy a house (can only do this after 5 years)

the bonus $1000 you get when you start is just another incentive for people who are easily suckered by money bribes, you don't get to see this bonus $1000 until you reach 65 no matter what.

there are many different schemes you can join, ASB has the lowest fees (not necessarily the best return) however they do offer a wide range of choices/risks.

my take on the thing is that i'm gonna wait a few months so they can iron out any problems (i can't be bothered dealing with it) then perhaps sign myself up for an actively managed balanced fund with the ASB first choice scheme (partnered with sovereign etc...) being young an active management style could pay off over time and bring me a higher return, but some people would prefer to go for a less risky cash type scheme which is pretty much like having another savings account that you can't touch.

hope that was helpful

[dave 2]

your employer will put in an extra 4% of what your earn in a few years (but no doubt will take it into consideration when deciding your pay rate)

This has still yet to be passed by government, so is not yet set in stone.. It may not be passed until April 1 next year..

I have been looking at the Life Points system from these guys:

Click

[Nobimmer 694]

Hmm helped a whole lot Ollie chur.

Probably pay to leave it for a while whilst all the small sh*t gets wrapped up eh

[Surge 1]

I hope interest keeps up with inflation or that $1000 isn't going to mean f'all by the time we're 65.

My money is better invested than locked in a bank account I can't access.

[bravo 35]

My take on it is thus:

(1) There are better investments that have tax breaks.

(2) The employer contribution will get absorbed by scaled pay rates

(3) If you are buying your first house you can get it out. Too bad if you already have a house because you decided to scrimp and save and live at home instead of renting a nice city apartment and going out for coffee every 2 mins, and then buy a shithole to rent out so at least you've joined the property ladder. If that's you too bad. If on the other hand, you were too lazy to do that , and now you "fee like" buying a nice $300k home, then sweet - the govt will chuck you a handy grand. Ok I know a grand is f**k all, but its all counts.

(4) There is bugger all choice in terms of investment options - so far I agree with Ollie that ASB seems to have the best range of options.

(5) If you have a balanced investment strategy already, then the flexibility of being able to liquidate more or less when you want far out weighs the tiny contributions, esp. since a carefully setup portfolio will probably bring greater returns. HOWEVER, if you are new to investing, or don't earn in the top tax bracket then I think it is a great idea to force you to pay for your own retirement. and Finally, it could be a key part of a larger overall investment strategy. Its not all bad.

Personally I'm opting out for now, but will jump on if I deem the tax breaks etc to be worth it.

To clarify when you can retrieve the funds it is when you are 65. if you join the scheme and are over 60, then you have to wait 5 years. If you buy your first home and/or in certain other circumstances, you may be able to withdraw sooner.

[cainchapman 0]

In addition to the $1000 per year for the first 5 years, the government will match you up to $1040 in contributions.

So, If all you do is put in $1040 dollars per year yourself. You will end up with an additional $2040 from the government.

It's a good idea. Start saving. There is a good range of choice. Talk to a financial adviser. You really need to look at your age versus investing strategy. The younger you are, then you should go for a High risk portfolio as statistically you will come out better off over 10-20 years than the more conservative funds.

You can't rely on Super to be around when I get to retirement age. Let alone when you guys get there.

[QuickSilver 0]

I think this is a great idea, my work has agreed to put in 2% if I put in 2% aswell, ontop of that im recieving a 4% payrise regardless as an incentive to start this scheme, I worked it out VERY roughly, and by the time I turn 65 i should have put away about 600,000+ but thats NOT taking into account that I will most likely increase to 8% in the later years, as good as it all sounds, and I think its great, just like everything in life is a risk this aint any different, im gonna do it, simply because ive been given a good offer and would like to be settled for life, thats just my 2cents.

[Andrew 30]

I think this is a great idea, my work has agreed to put in 2% if I put in 2% aswell, ontop of that im recieving a 4% payrise regardless as an incentive to start this scheme, I worked it out VERY roughly, and by the time I turn 65 i should have put away about 600,000+ but thats NOT taking into account that I will most likely increase to 8% in the later years, as good as it all sounds, and I think its great, just like everything in life is a risk this aint any different, im gonna do it, simply because ive been given a good offer and would like to be settled for life, thats just my 2cents.

and that magical thing called inflation

[Jammasterjames 0]

and that magical thing called inflation

Word.

Invest in property to beat inflation.

Or set up some ho's on tha street.....just remember: Pimpin' aint easy

And none of dem Ho's gonna get Kiwisaver from me, 'less they want a backhand!

[Guest Phil Ken Sebben]

If you are an employer, no way. If you are an employee, by all means go for it.

[E34-535ti 5]

Word.

Invest in property to beat inflation.

Inflation is so low that even the most conservative of investments should return a gain over and above the current rate of inflation, KiwiSaver should be no different. And remember in order to keep inflation low interest rates are high thus making property not such a good investment (well thats what Dr Ballard hopes anyway...)

KiwiSaver will be compulsory for all in a few years and the incentives will probably never be as good as they are now.... so take the govts money and run..... (although as tax payers we're just taking our own money back anyway, the govt want you to think how wonderful and generous they are.... b@stards)

Anyway if worse comes to worse you can take a contribution 'holiday' indefinitely after one year.

[nz320i 0]

meh im going to do it, just go for 4% then up to 10% once my company starts putting more in.... still buying my 1st house to do up however - seems to be where the money is

Edited July 4, 2007 by Chris C

[OLLIE 26]

best thing you can invest in is yourself, find something you're good at, start a business and away you go, there is no other way you can have that kind of control over your money.