KiwiSaver & Property Investing

[Josko]

This is the beginning of compulsory superannuation, NZ is just taking a slower step towards that, set up the structure, then make it compulsory, it has been good fro the Australian economy.

[sarahd]

Personally I'm not doing anything, but doing my own investing for retirement.

I don't want the government touching my retirement savings thank you!

[cube]

I think, generally, its a good thing, because providing a way for people to feel that they are getting something for nothing ($1,000 kick start, tax free employer contributions) is a good incentive to get people to save.

BUT, call me an elephant with a long memory, wasn't the Cullen fund supposed to provide for future retirees - or is that only the ones who can't even be bothered to take a Tax Free carrot, let alone pro-actively plan and invest for their retirement

So, which is it - tax-funded savings, optional personal savings, compulsory saving or, and here's a radical idea, building an economy so that it can support 1 worker to 2 pensioners.

cube

[sarahd]

Yes I forgot about the Cullen fund. I think this was only ever going to cover less than 10% the government needed to fund retirees.

I see many people in my job who haven't even thought about their retirement savings, it is very scarey. I don't know what kind of lifestyle they are gong to have in the future but its going to be a very spartan one.

I think Kiwisaver will be good for some people whom thinking about their own investing is just "too hard". It will make it easy to invest their salary without them having to take action to do it.

[CJ]

I dont see it having much impact. The poor will opt out (more cash in hand) and the rich will get tax free top ups from employers. They will replace thier existing super plans with this.

it might cool the economy a bit but that will let Bollard lower interest rates - oh no it wont as housing will keep going strong and will increase once people get their first home buyer grants after 3-5 years.

it will be compulsory very shortly IMHO as others are predicting.

[Gerrard]

So if it becomes compulsory it will take at least 4% of money out of circulation, and possibly up to 8%. In my books that's got to have a pretty big impact on the economy. The economy and the property market are related so there has to be some flow on effect.

Gerrard

[Josko]

I don’t believe so, when it is made compulsory it will be in addition to current wages, so it will become a cost of employment, the impact will be more on company profits which in time will be passed on, though the benefit to business is that it should return as investment funds needing a home. Small business might be hit a bit harder.

When they introduced it into Australia it was compulsory from beginning, there was no noticeable difference, in fact it help the economy as fund managers had an influx of additional money and they needed to invest it somewhere, what it should do if the government allows the superannuation fund managers in on it, is to boost investment in business.

[tim360]

if it becomes compulsory it will take at least 4% of money out of circulation, and possibly up to 8%. In my books that's got to have a pretty big impact on the economy. The economy and the property market are related so there has to be some flow on effect.

Where do you think the money is going to go... into the managed funds of course, most of which will invest in the NZ and Aus sharemarkets, so to me the money is going back into the economy.

It should be compulsory as the majority of people aren't disciplined enough to save for their retirement.

I don't want the government touching my retirement savings thank you!

They wont be touching your money, it will be invested in managed funds as any normal unit trust or super would be. In fact these funds will have lower management fees than standard managed funds, and given that you invest with pre-tax income it's really a no brainer for low to middle income people!!

[Perry]

I am therefore I stink

. . . the majority of people aren't disciplined enough to save for their retirement.

. . . it's really a no brainer for low to middle income people!!

Oh my. No discipline and no brains. That don't rate highly
in your estimation, it seems. The majority of low to middle
income people, I mean.

[Gerrard]

Where do you think the money is going to go... into the managed funds of course, most of which will invest in the NZ and Aus sharemarkets, so to me the money is going back into the economy.

Yeah but there's a difference between investing and spending. If you invest money in Hallensteins then you need people spending more money in that store to get growth in your investment. If people will be spending 4% - 8% less in that store where's the return going to come from on your investment?

Gerrard

[tim360]

Oh my. No discipline and no brains. That don't rate highly
in your estimation, it seems. The majority of low to middle income people, I mean.

OK, so you disagree then?.... most people are very disciplined savers and that kiwisaver is not a good place to put your savings?

[Perry]

OK, so you disagree then?.... most people are very disciplined savers and that kiwisaver is not a good place to put your savings?

That's right. That's why PT has 2.5M active NZ members!

[Julian]

This talk about the Superfund taking money out of circulation seems a nonesense to me. The fund invests the money - it does not store it in a bank vault - and thus the money remains in circulation. The purpose is to help fund the baby boomers as they retire. To me it seems a step in the right direction. Another positive step would be to lift the retirement age to 120 or death - whichever occurs sooner. To have a small group of taxpayers funding a large group of retirees is a recipe for economic disaster - and yes I am one of those baby boomers. And it's bloody insulting to tell people that they are suddenly worthless and incapable of being a productive member of society when they turn 65.
Julian

[tim360]

That's right. That's why PT has 2.5M active NZ members!

Well I guess time will prove either of us right. I personally think NZ needs something like Kiwisaver and/or a compulsory super.

PT has 2.5M members ! is that a typo? that's 1 million more than Trade Me.

[Avalon]

Ok, so a quick question about Kiwisaver :-

Does anyone on here know what is happening about being able to divert upto half your Kiwisaver contributions to paying off your PPOR mortgage after the first year?

Apart from seeing it in the paper last year when Kiwisaver was about to be trashed as it wasnt good enough (this was supposed to make it more enticing) - the only thing ive heard about it is from my Accountant. And all he knew was that it was mention in a 1-liner in a trifold brouchure he had.

As this is the only thing that would make us even consider using Kiwisaver (as it allows yo to pay your mortgage with Pretax money) - it would be really great to find out how to get it.

Cheers

Hxxx