By Brian Dalley
Is there a place for KiwiSaver in this instant society we live in?
Yes there is but sadly we overlook the basic principle behind it, and that is to put something away for a rainy day.
So far only a million or so New Zealanders have joined KiwiSaver. Sure there are a few wondering in every day and signing up but if I were to walk around the local shopping mall dropping one hundred dollar notes I am sure their would be a stampede.
Just the other day whilst out checking on some investment properties with my good friend Britney, she decided to call into a drive through to order a chicken rap that had just come on the market. I could see she was starting to get agitated, “and these people have the audacity to call this place a fast food outlet”. I flashed a quick look at the clock in her car, and about time she grumbled, 45 seconds later.
Nothing wrong with that, burgers are cooked in less than a minute, banks are open seven days, and by using Google we can be in Europe shopping for shoes at the push of a button, but not to save for retirement is like saying, I am going to be in the top 10% therefore I don’t need to, it’s called a top 10% for a reason, there isn’t room for us all.
Goals are great, and to strive to achieve is something I encourage but like any good investment plan there should be a contingency in place and a retirement plan is a contingency for life. We don’t live in a perfect world, and to coin a phrase s#@t happens.
For some, when things go wrong the road opens up and swallows them, for others a pot hole appears, either way a detour is usually required. Unfortunately for some, that can mean a good part of the road forward has been eroded resulting in a life changing experience.
Life Insurance and the KiwiSaver Scheme have similarities when you take a closer look.
Life Insurance will help others live a better life should you die as will KiwiSaver. In the event of your death, your full KiwiSaver Scheme entitlements will be paid to your personal representative much like an insurance policy would. However in my view KiwiSaver has two distinct advantages over many if not all life insurance policies in that you don’t have to die for there to be benefits – “isn’t that great”. The other advantages are not quite as good as life itself but they do rate up there.
Lets in closing take a quick look at the advantages before I sign off;
- I am not aware of the government offering to pay you $1000 to kick-start any other protection or investment plan
- I am not aware of the government offering to match your contribution up to $1040 per annum should you decide to opt into a savings or investment plan other than the KiwiSaver Scheme
- Your employer is not compelled by law to contribute to any scheme other than KiwiSaver
Whilst giving Britney’s daughter Jess a crash course in financial literacy the other day I said to her, every week you procrastinate Jess it is costing you $20. Which drew no reaction? A half a tank of gas, really! That drew a reaction. The young adult mind kept processing the new information and concluded with; so if I join KiwiSaver I would get a 2% pay increase.
You’ve got to love them don’t you.
If you are still not convinced at least collect the $1000 kick-start for the kids. When the time comes for them to start contributing they may think differently, if not they can opt out.
If you are serious about generating future wealth for yourself, your family and your employees, or simply want to check on KiwiSaver Updates visit www.KiwiSaver.NZWealthClub.co.nz and remember, “those who act receive the prizes”.
Brian Dalley is a qualified NZMBA Mortgage Broker, Property Investor and former Real Estate Agent.
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