Free Money Anyone?
Why should you join KiwiSaver?
Because they give money away for free, that is why! Having worked in Australia for a few years I did not even flinch when they took a portion of my pay each week and locked it up where I could not touch it. My employer also added some to the pot. So, when the NZ Government announced that we would adopt a compulsory savings scheme here the three of us were some of the first in the queue to sign up. I had seen my money accumulating in my Ozzy fund and I liked it.
I know some people complain that they don’t like their money being locked away where they can’t touch it, but these people also tend to have absolutely no savings anywhere else either. Locking your money away is the whole point. It stops you spending it and might result in you not becoming destitute in your later years.
If you, like me, joined KiwiSaver when it first began we were the lucky recipients of free money by way of a $1,000 “kick start” the government gave us just for signing up to the compulsory superannuation scheme. Each year since, as long as a minimum of $1,042.86 from employer contributions or personal contributions goes into my fund then I’m given an extra $521.43 from the government. This is known as a “member tax credit”. Sweet!
It has been running since 2007 so that means I’ve received over $4,500 of free money. That’s awesome! Yes, the government has more recently scrapped the $1,000 grant for signing up but don’t let this deter you. You are still eligible for free money every year so go on and do it. Give it two years and you will ‘earn’ that $1,000 back anyway. And you have no right to complain about missing out either, the scheme has been going a good while now and ignorance of it is no defence!
When I work, my employer pays into my scheme and I also contribute directly from my wages. I have also always personally contributed an additional lump sum of $200 each month into my scheme as well. So it is not difficult at all to get over the $1,042.86 minimum that you need to contribute.
This little blog post today is just a reminder that the 30th June is fast approaching. This is the cut off date where you must have contributed $1,042.86 to your fund or you will not be eligible for FREE MONEY. The financial year for KiwiSaver runs between 1 July and 30 June so NOW is the time to check that you have contributed enough to your fund to attract your mid year present from the government. So, do not delay, go log on to your KiwiSaver account now and check…
PS, if you don’t even know HOW to log on to your KiwiSaver then make an effort to do that too! You may get a pleasant surprise at how your retirement fund is ticking along or you may get a nasty shock that its underperforming. Its YOUR money so do yourself a favour and make sure its growing for you. No time like the present I say.
PSS, my husband works for himself so we have a set amount that we personally contribute to his fund each month instead of an employer doing it. I got a bit carried away when I was organising that and also set up extra amounts to go into our daughter’s as well. Just a note on kids: you have to be over 18 to receive these member tax credits. But I didn’t let that stop us signing her up and I’m a glad. A quick check tells me that collectively we are now getting close to $100K in KiwiSaver. Not bad for nine years of savings right? Just over $12,000 was given to us by the government. Regular savings and cumulative interest have taken care of the rest.
A great site to visit for more information is here: www.kiwisaver.govt.nz/new/benefits/mtc/