In New Zealand, we have a retirement scheme called Kiwisaver, which is similar to Superannuation in other countries. The current retirement age is 65 years old. KiwiSaver is available to any employee aged 18 years and over living in New Zealand. Employees can opt into KiwiSaver by contributing 3%, 4%, 6%, 8%, or 10% of their wages. By law, employers must also contribute 3% of their employees’ wages. Additionally, if an employee pays a minimum of $1042.86 per annum into KiwiSaver, the Government provides an annual contribution of $521.43. Each July, contributions are assessed to determine eligibility for this grant.
This scheme is accessible from a very young age, allowing parents to begin contributing to their children’s KiwiSaver accounts while they are still in school. This can serve as a great savings account for children, accumulating a decent amount by the time they turn 18. However, parents who contribute will not receive the Government’s annual contribution of $521.43.
I have my KiwiSaver with Milford Asset Trust (www.milfordasset.com). I use a mobile app to check my overall balance and ensure I meet the annual $1042.86 contribution requirement. The app also allows me to see how my funds are allocated. Mary Holmes, an expert on KiwiSaver with a column in the New Zealand Herald and a podcast, explains that KiwiSaver funds are divided into low-risk, moderate, and high-risk investments. Depending on your age, you should allocate your funds accordingly. Younger individuals can afford higher-risk investments, while those nearing retirement should opt for lower-risk options. The risk level of your funds will influence your return on investment.
In conclusion, KiwiSaver is a versatile and beneficial retirement scheme in New Zealand, similar to Superannuation in other countries. It provides various contribution options and government incentives, making it accessible and advantageous for employees. By starting contributions at a young age and choosing appropriate risk levels for investments, individuals can ensure a more secure financial future.
