KiwiSaver changes…..
Interesting article on stuff this morning regarding KiwiSaver – highlights why you should make an appointment to meet with an Authorised Financial Advisor (AFA) about your KiwiSaver. Call us now to make an appointment!
http://www.stuff.co.nz/business/money/6282134/ANZ-calls-for-KiwiSaver-change
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Kiwisaver Three Years On
3 years on, over $5.5 billion invested across 1.4 million members and still 1,000 new members are signing up each day!
Do you need to speak with us to discuss your options?
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KiwiSaver First Home Buyer Incentives now available
The 3rd Anniversary of KiwiSaver also marks the commencement of the first home purchase withdrawal facility and the first home purchase subsidy. From1 July these benefits became available to eligible members.
SAVING FOR YOUR FIRST HOME WITH KIWISAVER
While KiwiSaver is mainly about saving for your retirement, there are 2 benefits for KiwiSaver members who are saving for their first home.
Benefit 1: Savings Withdrawal To Buy A Member’s First Home
To help members with a deposit for their first home, they may be able to withdraw some or all of their KiwiSaver savings (except for the $1,000 kick-start and member tax credit).
Eligible criteria:
• You must have been a KiwiSaver member or a member of a complying fund for three or more years.
• You can only withdraw money to buy your first home – not an investment property.
If the member owned a home before, in some circumstances they may still be eligible to withdraw their savings. For more information the member can visit the Housing New Zealand website www.hnzc.govt.nz or call them on 0800 801 601 to determine if they are in the same financial position as a first home buyer.
Benefit 2: KiwiSaver First Home Deposit Subsidy
From 1 July 2010, after 3 years of contributing to KiwiSaver, members may be entitled to a first home deposit subsidy. The subsidy is administered by Housing New Zealand NOT the KiwiSaver provider.
The first home deposit subsidy is $1,000 for each year the member has been contributing to KiwiSaver, up to a maximum of $5,000 for five years. If they are a couple buying a house together and they both qualify for a subsidy, they can receive a combined subsidy of up to $10,000. Income and house price caps will apply.
To be eligible for the first home deposit subsidy, the member must:
• have contributed at least 2% of their income to a KiwiSaver scheme, or a complying superannuation scheme, for at least 3 years
• be buying their first home*
• be planning to live in the house for at least 6 months.
* If they have owned a home before, in some circumstances they may still be eligible for the first home deposit subsidy. Housing New Zealand will need to determine that they are in the same financial position as a first home buyer.
To find out more, visit the Housing New Zealand website www.hnzc.govt.nz or call them on 0508 935 266
After They’ve Bought Their Home
Once they have made a withdrawal from their KiwiSaver account to buy their first home, they will remain a KiwiSaver member.
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Client – Self employed KiwiSaver Scenario
Client – Self employed Scenario
Jonny joined KiwiSaver once he realised that the Government was going to help out with his savings, no matter if he earned money via a salary or not. Denis explained that most workers contribute either 2%, 4% or 8% out of their salary but if you aren’t paid via PAYE you can put in whatever you like. Jonny puts in $20 as that is the maximum the Government will match him with member tax credits.
What do you like about KiwiSaver Jonny? I didn’t want to miss out on what everyone else gets with KiwiSaver. I like that I have the freedom to put in whatever I like into my account. My business is my main focus at the moment but it’s good to know I’ll have a nest egg for when I do get older.
Discuss your KiwiSaver options with Thorners.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Client – 55-65 year old KiwiSaver Scenario
Client – 55-65 year old scenario
Jerry joined up with KiwiSaver last year. He’s 61 and while he’s already got plans in place for his retirement, Denis spoke to him about making the most out of KiwiSaver so he joined up.
What do you like about KiwiSaver Jerry? It’s a no brainer for someone my age – I join, put in my $20 a week and the government matches it! By the time I retire I’ve worked out that I could have at least $11,000. That’s going to be my holiday to Europe!
Discuss your Kiwisaver options with Thorners.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Young Couple KiwiSaver Scenario
Young Couple Scenario
Mike and Sally have both joined KiwiSaver. Mike was automatically enrolled when he started his new job but he then spoke to Denis who helped him decide which KiwiSaver provider and product was best suited for him. Sally’s a stay at home Mum and wanted to make the most out of what the Government was giving away so she joined up too.
What do you like about KiwiSaver Sally? I can log on to my providers website and see my balance online. It’s simple to understand and at least I can track where my money is going.
What do you like about KiwiSaver Mike? Denis spoke to me about how KiwiSaver can help me buy our first home. We’ve been saving up for a home for a few years but never seem to get far. With KiwiSaver, Housing Corp could give us up to $10,000 as a couple to use as a deposit. I can also use my own KiwiSaver money for that deposit too – it makes savings easier. My KiwiSaver money comes out before I get my pay check so I don’t even notice it – it’s only $2 for every $100 I earn anyway.
Discuss your KiwiSaver options with Thorners
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
KiwiSaver Statistics January 2010
KiwiSaver continues to gain momentum.
At the end of January 2010 there were 1,305,127 members with potentially 491,330 being in default funds. There are benefits from choosing your own provider and fund so let’s talk about your options if you have gone to a default provider.
If you are still sitting on the fence over whether to join or not, contact us soon to see if KiwiSaver fits your personal situation.
The ability to transfer Australian Super into KiwiSaver is still not in place and this is expected mid year – watch our website for developments.
Members continue to be amazed with the speed with which their funds are accumulating. If your provider doesn’t offer online access, give us a call and we can discuss options to make this facility available 24/7.
We welcome your call or email to ask about KiwiSaver and look forward to hearing from you soon.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
Australian super transfer update November 2009
Legislation allowing New Zealanders returning home from Australia to bring their retirement savings with them will be introduced to Parliament in about two weeks, Finance Minister Bill English says.
Providing the necessary law changes are made in Australia, it is envisaged the new arrangements will take effect in the second half of next year.
“This is an important step forward for our wider Single Economic Market programme with Australia, particularly in helping the free movement of labour between the two countries,” Mr English says.
“In particular, it will allow New Zealanders and Australians to consolidate their financial affairs in the country in which they live.”
Currently, Kiwis who work in Australia must contribute to an Australian complying superannuation fund. However, the savings are locked into the Australian scheme until the saver reaches retirement age.
Mr English signed an agreement with Australian Treasurer Wayne Swan in July, which paved the way for the new super portability scheme.
It will allow retirement savings from certain Australian superannuation funds to be transferred into New Zealand KiwSaver funds – and vice versa. New Zealanders bringing their savings home must put them into a KiwiSaver fund.
Australia’s Tax Office has estimated that it holds about A$13 billion (NZ$16.6 billion) in “lost accounts” in the Australian superannuation system.
“We expect that much of this money could belong to New Zealanders who have returned home and these new rules will allow these funds to be brought back to New Zealand,” Mr English says.
Participation in the super portability scheme will be voluntary.
The Government will include the changes in the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver and Remedial Matters) Bill, expected to be introduced to Parliament in mid November. Key facts about the Super portability changes
The transfer of retirement savings between the two countries will be exempt from entry and exit taxes. Under current tax laws, transferring savings from Australia to New Zealand may be regarded as a taxable dividend. The proposed legislation will ensure this does not happen.
KiwiSaver members moving from New Zealand to Australia will be able to retain any member tax credits if they transfer to an Australian scheme.
KiwiSaver members will not be able to withdraw money transferred from Australia to help them buy their first home, but they can use the interest earned on those savings for this purpose.
Retirement savings transferred from Australia into a New Zealand KiwiSaver scheme can be withdrawn when members reach the age of 60 as long as they have retired – as set out under Australian scheme rules. KiwiSaver savings transferred to Australian schemes can be withdrawn when members reach 65 – as per New Zealand KiwiSaver rules.
Contact Thorners if you have questions or require advice on this exciting financial development – we service clients NZ wide.
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
KiwiSaver Statistics June 2009
KiwiSaver has recently had a second birthday that celebrated over 1,100,500 members. Of these people 52% were female and only 18% of the total membership were aged 55 plus.
Employee deductions in June 2009 amounted to $62,477,285 and for the financial year ending 30 June were $916,603,051. Total payments by the IRD to providers including kick starts and member tax credits amounted to $2,116,241,037.
Have all of your family had their slice of the cake from KiwiSaver? Whether working or not, so long as you or your family members are under 65 years of age, we can show you how to benefit from KiwSaver. The compounding effect of the additional benefits is hard to beat in the current financial climate.
Contact us if you require more information or would like to join.
Click here to view our disclosure statement
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
KiwiSaver changes from 1 April 2009 for contributors
The National Government has made a number of changes to KiwiSaver following the confirmation of election policies with some amendments. Most changes will come into effect from 1 April 2009.
The Government’s changes to KiwiSaver legislation will reduce the minimum contribution for employees to 2% of gross salary or wages, matched by a reduced maximum compulsory 2% contribution from employers.
Is 2%+2% enough?
WHAT DOES HISTORY SHOW
The Retirement Commission states that New Zealanders should use 70% of their current income as a guide to the annual income required to keep them comfortable during retirement. With total savings reducing from 8% of an employee’s gross salary or wages to only of 4% (2%+2%) per annum, it is unlikely to deliver this result. Therefore, there is a need for New Zealanders to either voluntarily increase KiwiSaver contributions above the new minimum or look to other investment vehicles to make up the difference.
This table shows the value of KiwiSaver based on an individual with 35 years until retirement wanting 70% of a $60,000 income, which will provide $45,000 per year in retirement. How much should he/she save to reach this target?
What hasn’t changed?
RECEIVING $1,000 FROM THE GOVERNMENT
All KiwiSaver members will still receive $1,000 from the Government into their account when they join, to kick start their savings.
TAX CREDITS TO MATCH YOUR SAVINGS
Members aged over 18 who live in New Zealand will receive “member tax credits” from the Government to match their own contributions. The tax credits match savings up to $20/week ($1,040/year) and continue until you are able to withdraw from KiwiSaver.
HOME OWNERSHIP ASSISTANCE
As well as being able to withdraw their contributions after 3 years, members may be eligible for a home deposit subsidy of up to $5,000.
MORTGAGE DIVERSION LOWERS IMPACT OF SAVING FOR HOMEOWNERS
KiwiSaver members who already have a mortgage can divert half of their contributions to pay off the mortgage, after one year of saving. This lowers the barrier to joining for people in this situation.
What has changed?
FROM 1 APRIL 2009
THE MINIMUM MEMBER CONTRIBUTION RATE
The minimum member contribution rate will be reduced from 4% to 2%. The minimum contribution rate of 2% will become the default contribution rate for new employee members from 1 April 2009.
THE MEMBER FEE SUBSIDY
The member fee subsidy will be discontinued from 1 April 2009.
CAPPED COMPULSORY EMPLOYER CONTRIBUTIONS
Compulsory employer contributions will be capped at 2% and the employer tax credit will be discontinued from 1 April 2009.
THE EMPLOYER SUPERANNUATION CONTRIBUTION TAX EXEMPTION
The employer superannuation contribution tax exemption will be capped at the compulsory employer contribution of 2% from 1 April 2009. (That is equivalent to 2% of the employee’s gross salary or wages.)
WITH IMMEDIATE EFFECT
CHANGES TO THE EMPLOYMENT RELATIONS ACT
The KiwiSaver Act will be amended to make it clear that upon joining KiwiSaver, no employee can have their gross pay reduced as a result of employer contributions. This will ensure that when employees join KiwiSaver, the compulsory contributions from their employer are a genuine addition to their existing pay. The changes will also provide employers and employees with the ability to negotiate their own arrangements in good faith. The Employer Relations Act amendment relating to KiwiSaver will then be obsolete, and will be repealed from the date of assent of the Employment Relations Amendment Bill.
Click here to view our disclosure statement
Click here to email Thorners or Call Us on (04) 528 8088
RECEIVING $1,000 FROM THE GOVERNMENT
All KiwiSaver members will still receive $1,000 from the Government into their account when they join, to kick start their savings.
TAX CREDITS TO MATCH YOUR SAVINGS
Members aged over 18 who live in New Zealand will receive “member tax credits” from the Government to match their own contributions. The tax credits match savings up to $20/week ($1,040/year) and continue until you are able to withdraw from KiwiSaver.
HOME OWNERSHIP ASSISTANCE
As well as being able to withdraw their contributions after 3 years, members may be eligible for a home deposit subsidy of up to $5,000.
MORTGAGE DIVERSION LOWERS IMPACT OF SAVING FOR HOMEOWNERS
KiwiSaver members who already have a mortgage can divert half of their contributions to pay off the mortgage, after one year of saving. This lowers the barrier to joining for people in this situation.
What has changed?
FROM 1 APRIL 2009
THE MINIMUM MEMBER CONTRIBUTION RATE
The minimum member contribution rate will be reduced from 4% to 2%. The minimum contribution rate of 2% will become the default contribution rate for new employee members from 1 April 2009.
THE MEMBER FEE SUBSIDY
The member fee subsidy will be discontinued from 1 April 2009.
CAPPED COMPULSORY EMPLOYER CONTRIBUTIONS
Compulsory employer contributions will be capped at 2% and the employer tax credit will be discontinued from 1 April 2009.
THE EMPLOYER SUPERANNUATION CONTRIBUTION TAX EXEMPTION
The employer superannuation contribution tax exemption will be capped at the compulsory employer contribution of 2% from 1 April 2009. (That is equivalent to 2% of the employee’s gross salary or wages.)
WITH IMMEDIATE EFFECT
CHANGES TO THE EMPLOYMENT RELATIONS ACT
The KiwiSaver Act will be amended to make it clear that upon joining KiwiSaver, no employee can have their gross pay reduced as a result of employer contributions. This will ensure that when employees join KiwiSaver, the compulsory contributions from their employer are a genuine addition to their existing pay. The changes will also provide employers and employees with the ability to negotiate their own arrangements in good faith. The Employer Relations Act amendment relating to KiwiSaver will then be obsolete, and will be repealed from the date of assent of the Employment Relations Amendment Bill.
Click here to view our disclosure statement
Click here to email Thorners or Call Us on (04) 528 8088
Click here to view our disclosure statement.
Click here to email Thorners or Call Us on (04) 528 8088
