Many New Zealanders are still missing out on an opportunity to double or even treble their money. Recent statistics show that over 60% of Kiwis who are eligible to join KiwiSaver have not yet done so. The principal benefits of joining KiwiSaver are:
- An initial Government kickstart of $1,000
- An annual tax credit of up to $1,040
- An employer contribution of 2% of your pay
These amounts are all paid into your chosen KiwiSaver fund where they will be added to your contributions, invested, and made available to you at retirement age.
There are three main reasons why those eligible don’t join and therefore miss out on free cash.
The first reason is skepticism. Having heard ‘if it sounds too good to be true, it probably is’, some people are still pondering what the catch is and taking a wait and see approach. They may be waiting for some time, because there really is no catch.
The second reason given is not enough spare money to contribute to KiwiSaver. With the minimum contribution now being only 2% of pay, there should be a very small number of people on low incomes who can’t afford to put in the equivalent of a few cups of coffee a week.
The third reason, particularly for younger people, is retirement is still a long way off and there is plenty of time to save. If only these people could talk to retirees about the benefits of starting retirement saving early!
Around half of existing KiwiSaver members have joined a default scheme without advice and run the risk of being in a fund that is not appropriate for their needs.
The best way to join KiwiSaver is to contact a financial adviser who can help you choose the best fund for you.