Most working age New Zealanders are signed up and contributing to KiwiSaver in an effort to build up a nest egg for their retirement; however many have not really considered which funds they are invested in and therefore may be disappointed in the years to come.
KiwiSaver – New Zealand’s Superannuation Plan
New Zealand does not have compulsory superannuation – yet.
For many years Kiwis have relied on New Zealand Superannuation is a fortnightly payment for people aged 65 and over. The amount that you receive depends on your current circumstances. These include: whether you are single, married or in a relationship, your living situation if you are single and whether your partner is included in your New Zealand Superannuation payments or not.
Currently the maximum for someone single and living alone is $769.52 fortnightly. A married couple who both qualify could receive $1,183.88 fortnightly. CLICK HERE to review what you may be entitled to receive.
Can you live on NZ Super?
Many Kiwis look at the amount that they may receive on NZ Super and be concerned that they could not survive on that alone and this is one reason that people are joining KiwiSaver.
The reality is we would all like a comfortable retirement and this means having enough money to pay for the comforts that we want whether that be just enough to keep a roof over our heads and some food in out tummy’s, or some more luxuries like holidays and new vehicles.
We All Want A Comfortable Retirement
As we are living longer we need to also be concerned with how we are going to be able to fund our retirement. Some people are going to rely on NZ Super while many others have questioned if NZ Super will be available to them when they retire.
What are your options?
- You could rely solely on NZ Super however the control for this is with the Government and anything could change.
- A lot of people are looking at various investments in business, the share-market and in New Zealand property investment is popular.
- KiwiSaver is an easy superannuation investment that some Kiwis will be reliant on while others will use it alongside other investments.
One advantage of KiwiSaver is that it gives you access to some world class investments whilst keeping the costs (fees) to a minimum.
Is KiwiSaver Working?
When people join KiwiSaver there are some investment choices to be made, but if you do not make any choice you will be allocated a default option which is very conservative.
In the Financial Markets Authority KiwiSaver Annual Report for 1 July 2014 – 30 June 2015 confirmed that there are 2.5 million members whom have invested $28.5 billion invested in the 39 schemes.
You should not be in a “Default” scheme
Of the total members 453,731 are invested in the “Default” funds which means those people have not made a decision on which fund to invest in. The default schemes (in which members are automatically enrolled if they don’t choose their own scheme) are currently the following nine default schemes; AMP, ANZ Default, ASB, BNZ, Grosvenor, Kiwi Wealth, Mercer, Fisher Funds TWO and Westpac.
Get “ACTIVE” with your investments
Many of the KiwiSaver investment options are passive and we can see this in many of the poor investment returns that people are getting.
Investopedia says that passive investing is an investment strategy that aims to maximize returns over the long run by keeping buying and selling and therefore fees to a minimum. Conversely active investing is an investment strategy involving continuously monitoring and adjusting their investments to maximise returns over the longer term.
Active investment managers just work harder for you.
Many of the bank and insurance company schemes are not actively managed. You don’t want to work hard for your money to then invest it for a poor return. It’s time to make sure that you get your KiwiSaver working for you.
We Offer “Class Advise”
As mortgage advisers we are able to offer class advice which will help you understand how KiwiSaver works.
We know that there is a lot of mis-information out there about KiwiSaver and we would love the opportunity to discuss this with you.
CONTACT US to arrange a time to get together and ensure that you get your KiwiSaver working for you.
