New Zealand Kiwisaver

By Robert Alan Stewart

There is little doubt that saving for ones retirement will go some way toward helping you to live a financially stress-free life after you have finished working. The New Zealand kiwisaver scheme was set up to help people save for their later years. Kiwisaver has many features and benefits and it is important to know the difference. A feature is a part of what makes a product unique while a benefit is what is in it for me. For example, a feature is that your savings in kiwisaver are not accessible until you reach the retirement age of 65 while the benefit is that you will have a nest egg when you retire.

The beauty of kiwisaver is that is a great savings tool irrespective of your age, stage of life, and your savings goals. If you are younger, you are able to use a portion of your kiwisaver money to go towards a mortgage of your first home. For a husband and wife with kiwisaver accounts, this is a big help towards getting your first home. I believe that you need to have been a member of kiwisaver for at least 5 years in order to qualify.

To help you with your savings, the government will put in $520 per annum into your kiwisaver account but you must put in at least $1040 per annum to get this amount. If you put in less than this, the government will put in 50% of your contribution. For example $400 contribution, $200 government money. It is in July when the government deposits this money into kiwisaver accounts because the kiwisaver year starts 1 July and ends 30 June. That means that you are able to deposit money into your kiwisaver account in June and still receive the government money the following month.

Advisors believe that the type of fund you choose is largely dependent on your age and stage of life. The funds range from the conservative to the growth funds. The rule is that the higher the potential return, the higher the risk. When you are younger you can afford to take more risks because you have more time to recover from a sharemarket crash but again if you are young and saving for your first home then you may want a combination of growth and conservative funds because when it comes time to withdraw some of your savings to purchase your first home then the markets may be down.

Kiwisaver is New Zealand's own retirement savings scheme to enable people to live a more comfortable retirement when they cease working. The incentives available for those joining the scheme make it worthwhile for every New Zealander to become involved if they not already are a member. It is better to regret the things you never did than regret the things you have done which will be the case if you reach the retirement age of 65 (applicable in NZ) and not have any savings behind you. My site http://www.robertastewart.com has some interesting articles on saving and investing.