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 your KiwiSaver account could be worth after 35 years based on a 5 yr average sector return p.a. on sorted.org.nz
The 5 year returns shown are the average for each fund type per annum (p.a.) from sorted.org.nz Fundfinder 01/04/12 to 30/06/17 less 2% p.a. to adjust for inflation Defensive 2.39% (0.39%), Conservative 5.00% (3.00%), Balanced 7.40% (5.40%) and Growth 9.58% (7.58%) p.a.
The 5 year average returns are used for illustrative purposes only and during this time period there has been a bull market in equities so these returns may be higher than usual. Assumptions are that you remain contributing continuously until you reach retirement at age 65. Your salary or self-employed contributions are assumed to grow by 3% p.a. Your employer puts in 3% p.a. less tax.
The graph above does not reflect the prospective performance of the Generate KiwiSaver Scheme or of any Fund. 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.
* “Most savers don't know how they pay for KiwiSaver” - nzherald.co.nz 21.06.16.
Mercer KiwiSaver Sentiment Index study - Mercer May 2014.
More than $300 million is 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.
* ”Why are KiwiSavers saying no to free money?” nzherald.co.nz 01.09.16.
It is either 10.5%, 17.5% or 28% based on your income over the last 2 years.
If you are paying too much tax you are not eligible for a refund. However, if you are paying too little tax you are liable to pay the difference back to the Inland Revenue.
The fine print
By entering my contact details I consent to be contacted by Generate Investment Management Limited and any of their authorised agents or distributors to promote their products and services. My information will be held securely and may be used for statistical purposes.
This survey has been prepared by Generate Investment Management Limited for general information only. I understand that neither the Manager nor the Trustee 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.
A copy of the Product Disclosure Statement is available from an adviser or can be found at generatekiwisaver.co.nz.
The returns to members of the Scheme 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. Past performance is not a reliable indicator of future performance. Returns since inception should also be assessed.
© 2016 Generate - Dreams worth saving