There’s a lot more to it than people think.
Answer the next four questions to see how taking advice now could mean the difference of hundreds of thousands of dollars in your retirement.
Here’s what Sarah’s KiwiSaver account could be worth after 35 years
Sarah is aged 30 on a salary of $55,000 p.a. and already has a Kiwi Saver balance of $15,000. She remains employed and contributing 3% of her before tax pay until she reaches retirement at age 65. She continues to receive the full Government contribution each year. In her first year on $55,000 her 3% contributions will work out to $32p.w. Her salary is assumed to grow by 3.5% p.a. Inflation is assumed to average 2% p.a. Her employer’s contributions are net of employer superannuation contribution tax. The returns are set by the Government and are used for illustrative purposes only and do not reflect the prospective performance of the Generate KiwiSaver Scheme or of any fund. They include tax of 28% (the highest and most common tax rate for KiwiSaver members) and average fees for the relevant sector. The returns are subject to investment and other risks (including potential losses). No returns are guaranteed or assured, and returns can at times be negative, particularly given the length of the investment period shown in the illustration. Past performance is not necessarily an indicator of future performance and returns over different periods may differ.
Many people who have joined KiwiSaver were automatically put into a default fund. These default funds are intended by the Govt to be “parking spaces” before you work out the type of fund appropriate for you.
Millions are being left on the table every year by people who either contribute nothing or just a small amount of money. It’s important you don’t miss out on this Govt contribution unnecessarily as over time it adds up to a big difference to your KiwiSaver account.
It is either 10.5%, 17.5% or 28% based on your income over the last 2 years.
If your PIR is too high you may end up paying too much tax from your KiwiSaver account, although you may be entitled to a refund. If you are paying too little tax you are liable to pay the difference back to Inland Revenue.
We have some compelling points of difference that are worth sharing:
The fine print
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This survey has been prepared by Generate Investment Management Limited for general information only. I understand that neither the Manager nor the Supervisor has represented or implied that any particular Fund or investment strategy is appropriate for my particular circumstances and has not provided me with either class advice or personalised advice.
For further details on Generate’s KiwiSaver performance, please see: https://www.generatewealth.co.nz/pds