Kiwi Saver is a no brainer… or is it?

A massive amount of the population think so however here at NZPIS we do not believe that there is a one size fits all investment anywhere in the world.

Kiwi Saver is pretty good and is certainly something we believe New Zealand needs however like all investments we also believe it needs to be appropriate to you and your situation. For some people Kiwi Saver may not be the most appropriate investment whereas for many people it will be the most appropriate investment and for others it will be a nice compliment to existing investments.

The only way to be sure if Kiwi Saver is right for you is to sit down with a professional and explore what is right for you.

Of course here at NZPIS we are happy to do that for you absolutely free of charge. In the mean time here are a few Kiwi Saver facts.

KiwiSaver Facts

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New Zealanders under the age of 65 can join KiwiSaver.
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All KiwiSaver Members get the $1,000 kickstart contribution from the Government.
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KiwiSaver Members receive a $40 subsidy from the Government each year.
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KiwiSaver Members over the age of 18 receive a matching tax credit up to $20 per week.
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Employees who join KiwiSaver are required to contribute a minimum of 4% of their gross salary/wage.
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Self employed and non working individuals can agree how much they save with their

KiwiSaver Scheme.

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Children under the age of 18 years can join AonSaver without having to make a contribution. They will receive the $1,000 government kickstart payment and $40 fee subsidy. The annual administration charge will reduce to $40 per annum until the child reaches age 18.
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Member contributions can be withdrawn as a deposit for a first home purchase.
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Some KiwiSaver schemes will allow mortgage diversion.

So if you haven’t joined KiwiSaver, Why haven’t you?

After all its not often you get something completely free, so when the Government offers you $1000 to get your KiwiSaver plan rolling, you should jump at the chance.You also get help with an annual tax credit up to the tune of $1040 and $40 each year towards the fees charged by the fund managers.

A future Government may change the rules so get started and get the money on offer!

Can it get better?

From 1st April 2008, if you are a contributing employee your employer will also contribute an amount equal to 1% of your salary or wages.This increases by 1% per year to a maximum of 4% in 2011. In addition employer contributions to your KiwiSaver account are exempt from Tax.

If you can afford to save 4% of your salary, join KiwiSaver now. By the time you turn 65 it’ll seem like the smartest thing you ever did and since this is like a compulsory savings plan once you get started you will not miss the money.

Some things You Should be Aware Of
There is no guarantee of the returns you make or even the return of your money by the Government or any of the Kiwisaver providers

At date of writing this all the Kiwisaver funds are new, so there is no performance and history track record on which to make a judgement. Our kiwisaver fund of choice however has had an impressive track record as a fund manager.

So Lets summarise

Contributors will save 4% or 8% of their before-tax pay. Be sure You can afford it.
Remember you are locked in till you are 65, and nobody will guarantee the returns (or the return of your money) from a Kiwisaver scheme.

We recommend a kiwisaver check up. After all for each and every one of you Kiwi Saver will mean something different and discussing your long term goals along with your cashflow issues will determine if Kiwi Saver is appropriate for you right now.

For a free kiwisaver checkup email us on kiwisaver@sterlingequities.co.nz with a phone number for us to contact you on.