The Retirement Commissioner says the Government’s planned additions to
the KiwiSaver scheme now make joining more worthwhile.The Commissioner, Diana Crossan, says Budget announcements of compulsory
employer contributions and tax credits of $20 a week mean people need to
spend time working out the status of their personal finances before they
make decisions about joining KiwiSaver.
“Budget announcements may make KiwiSaver more attractive,” says Crossan. “Experts will say it is an easier decision, but people will
need to make well informed decisions themselves, based on their
particular financial situation.
Crossan says people will definitely need to use the Retirement
Commission’s new online financial check up – Sort Me. Sort Me helps
people work out how financially sorted they are. It’s the first step to
understanding whether KiwiSaver’s right for them.
Crossan said workplace savings schemes were proven to be the easier
way of saving, and to attract people, the schemes needed to be as simple
as possible.
“Many people have a large mental hurdle which can stop them signing up
to long term savings. The kick start cash incentive and automatic opt in
to KiwiSaver may help people over that hurdle.
“The new announcements certainly make KiwiSaver more attractive, but
it’s important for people to have a good grasp of their financial
priorities.
“KiwiSaver gives all New Zealanders a trigger to think seriously about
their money situation. Whatever your age or stage putting off important
financial decisions is not the way to go – whether it be a decision to
pay off debt or to plan for retirement,” she says.
“One thing’s for sure, most people need to prepare financially for
retirement if they want more income than is provided by New Zealand
Superannuation – which currently after tax is approximately $14,407 if
you’re single and living alone or $22,164 if you’re a couple,” says
Crossan.