Time – the asset money can’t buy

Time – the asset money can’t buy

When it comes to investing young people have a huge advantage: TIME. Time – you can never get it back. It’s the asset money can’t buy. The sooner savings begin, the sooner compound interest can start and its ‘magic’ needs time.

Being in KiwiSaver gives a practical way for parents to talk to their children about money, about budgeting, about investing for the future, about learning to appreciate that saving is a slow process. Appreciating the difference extra contributions make. Appreciating that there is no such thing as a free lunch and so fees are charged. Great news, from 1 January 2019 we’re not going to be deducting fees for members under age 18.

Getting young people into regular savings and investment habits will help with setting them on a path to a secure financial future. You can help with this in your role as a parent, grandparent, older sibling, godparent.

Savings and investments are for many purposes. Saving to spend on something specific like a holiday, a car. Saving for future events such as tertiary study. Saving for the just in case event. Saving for the longer term and that is where KiwiSaver fits in.

KiwiSaver can work well if young people are invested in the right investment fund, and regular contributions are made. Once they reach 18 then there are the other benefits of the Government contributions and once they start work, employer contributions.

Investing in a KiwiSaver scheme also provides younger members with an opportunity to understand how market-linked investments work through the diversification of asset classes (shares, property, fixed interest etc.) and that, while investment returns can go up and down, over time they generally grow.

KiwiSaver is a great option to consider for longer-term saving. Christian KiwiSaver Scheme provides the opportunity to belong to a scheme that cares about how investment returns are made.

Changes to KiwiSaver – what do they mean for you?

Changes to KiwiSaver – what do they mean for you?

The Government has made some changes to KiwiSaver that include:

  • Introducing more contribution rate options for employees (from 1 April 2019)
  • Reducing the maximum period for ‘contribution holidays’ (from 1 April 2019)
  • Allowing people over 65 to join (from 1 July 2019).
More contribution rates for employees.

From 1 April 2019, it’s intended that you’ll also be able to contribute at 3%, 4%, 6%, 8% and 10% of your pay. 6% and 10% rates are the new options. Perhaps review your level of contributions when you receive a pay increase, it’s a great time to take the opportunity to save a little more.

Savings suspension timeframe reduces

‘Contribution holiday’ is now called ‘savings suspension’ and the maximum period for savings suspensions reduces from 5 years to 1 year. You need to apply directly to Inland Revenue each year to renew a savings suspension.

If you’re not making personal contributions to your KiwiSaver then you may also be missing out on the government’s contributions of up to $521.43 each year. That can add up to a lot over time, e.g. potentially $5,214.30 over 5 years. See the above article to check out how to qualify for the ‘free’ Government money.

Removing the age 65 restriction on joining

From 1 July 2019, the age 65 restriction on joining is removed and this group of New Zealanders (and permanent residents) will be able to join a KiwiSaver. The 5-year lock-in period on joining is also removed. There is no change to the age at which you qualify to withdraw your KiwiSaver savings, this remains age 65.

This provides a convenient and cost-effective investment option to just holding all your savings in a bank account or on fixed deposit.

Tell your friends and family about Christian KiwiSaver Scheme. They may be interested in joining and investing in a KiwiSaver scheme that is invested under an ethical investment policy and Christian values

KiwiSaver gives the self-employed great options

KiwiSaver gives the self-employed great options

If you’re self-employed then KiwiSaver provides a handy and cost-effective option to save for retirement. If you know someone who is self-employed then tell them, your friends and your family about Christian KiwiSaver Scheme, a KiwiSaver scheme for Christians that reflects Christian values and is founded on ethical and responsible investment principles. Send them a link to this article.

You don’t have to be in paid employment to join, it’s open to:

  • workers who are self-employed
  • those not in paid employment
  • students
  • children.

Self-employed people have great options:

  • They can choose the amount they save in KiwiSaver
  • They can make contributions on a regular basis or lump sum payments every so often
  • They choose their KiwiSaver scheme (pick ours!)
  • They are entitled to the government’s annual contribution of up to $1,042.86
  • They are entitled to all of the other KiwiSaver benefits.

It’s never too late or too early to start but the earlier saving starts the better off the saver is likely to be. Saving a little over a long time has proven to be a really good option.

Options when you reach 65

Options when you reach 65

If you’ve saved for your retirement, your 65th birthday is a red letter day as you can access your hard earned KiwiSaver savings. However, life doesn’t stop when we reach age 65 and you have options with regards to your KiwiSaver savings. In most cases, it’s hard to predict just how long we will need our savings to continue to work for us. The good news is you don’t have to make a quick decision.

Here are a few ways our current members can manage their KiwiSaver money from age 65.

  • Keeping your account open

Reaching age 65 does not mean members have to close their KiwiSaver scheme account. Many Christian KiwiSaver Scheme members are keeping their accounts open after age 65 and this also allows them the option to add further savings

  • Regular partial withdrawals

Regular withdrawals allow members to top up their retirement income while leaving the remaining balance in the Christian KiwiSaver Scheme working for them. You can arrange regular fortnightly or monthly withdrawal amounts from your Christian KiwiSaver Scheme account.  A $200 minimum applies to each regular withdrawal.  We can change the minimum withdrawal amounts at any time.

  • Other partial withdrawals

Occasional one-off withdrawals are another way to add to your retirement income.  Members can leave their money invested in Christian KiwiSaver Scheme after reaching age 65 and make a withdrawal at times when they need a cash injection. A $1,000 minimum applies to a one-off withdrawal.

  • Full withdrawal

As the name suggests, this is where members take all their savings out of their Christian KiwiSaver Scheme account. This ends their membership of KiwiSaver.

Only you can make the right choices about your KiwiSaver account. But it’s good to know that KiwiSaver doesn’t need to end at 65!