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KIWISAVER THE SAVIOUR FOR THOSE ABOUT TO RETIRE OR WILL THE RETIREMENT BENEFIT BE ANOTHER "FINANCE COMPANY" BAD INVESTMENT as 1.3 million people have $4.88 billion of their money invested in this scheme. You need to earn a minimum of $50,000 a year & contribute 2% of your salary to get the Maximum $20 a week tax credit. Growth in Kiwi saver funds slowed in 2010 & got worse in 2011 BUT WHAT ABOUT 2012? KiwiSaver growth funds fell 6.1 % for the quarter till now, while the more conservative default fund median fell 0.2 %. "We believe we are still heading in the direction of recovery, even if it is at a slow pace. Therefore shares and property still have a place in KiwiSaver funds."Mercer New Zealand head Martin Lewington said in August 2010????????? so that means your funds can be just as volitile if invested in the wrong funds?

KIWISAVER in 2012 update:

As at June 2011 the Kiwisaver fund was valued at NZ$19.22 billion. It's returns (after fees, before tax) have taken abeating by  the global financial crisis where 60% of the funds are invested.  In 2008/2009, the funds were in the red by 22.14%.  It's been on a steady recovery up till 2011. The following year, it was up 15.45% year on year. For the year ending May, it rose 26.34% but remember more are joining.  Since Kiwisaver started back in 2003, it's delivered more than 8% per annum, net of fees and foreign tax. The fund has a 60% allocation to global equities, so at the mercy of international markets & with the world in a turmoil again things could well change for Kiwi saver and those who think they can carry on as business as usual. Those Kiwi saver companies have to make money to survive but what about the man in the street who will now find things they wish to buy are getting more expensive and the bills more. So if stocks and bonds crash and the US downswing continues then what next.

 

 

Will you ever be able to afford that house!!!

  • KiwiSaver, just like any other investment, is risky and is not Government guaranteed. KiwiSaver schemes have been set up by both small and large new & reformed "finance" companies---does this make sense.

 

 

 

2012 KIWISAVER---- WE NEED TO SAVE SURE!!!!!!

But whats the future look like for those already heavily committed

  • Salaries at present are said to increase by 3.5% per annum? Your contributions are assumed to increase in line with your pay (for example $200 today will be $230+ in 4 years time or will it be)? As Business confidence has now dropped in August 2010 salaries will not increase as predicted as the burden for small business enterprises has to pay more?
  • Kiwisaver contributions are invested in a balanced supposedly fund earning a net real return of 3.5% per annum. Employer’s mandatory contributions are today 2%, and they lose their $20 a week tax credit to help fund it.
  • The one-off government contribution of $1,000 is received 3 months after the first contribution is deducted from your pay so this is good & an incentive --- well done. Will it balance out on inflation & costs in 5 years time?
  • Tax credits (for a maximum of $520.00 eg @ $10 a week ) are added to your savings each year but will they be adjusted to meet ones contributions in 5 years time as inflation rises.
  • New rules mean you lose $40 a year fee subsidy, so now you have to pay all your fees yourself---could this increase as providers find its not enough each year to run their business looking after your portfolio ----many say nothing about this & what will they invest your hard earned cash in --- so best use government funded providers or Banks for security sakes & remember a provider who offers you more will normally have a hidden agenda?
  • As we know the government may amend a law as they have already with Kiwisaver changing the rules from 4-2% min contribution ( not a bad thing ) but with lower taxation across the board & the thought of GST hitting 15% will employers look at rationalizing and cutting staff now as they get hit?
  • Do not just invest in a name but check the past performance of the Provider; who their managment is --- take your time before you choose?
  • Most KiwiSaver schemes are balanced managed funds so check out their FEES AND FUTURE FEES - your money is pooled and placed by a professional manager in a variety of investments (such as cash, shares, bonds, and property, funds, & finance companies & is no different than placing your hopes in a finance company). I would opt for a Bank eg. ANZ which is guaranteed as some of these providers may invest in the wrong investments??? then what?
  • Those saving for their first house granted --- your yearly salary = $50,000 @ 2% over 5 yrs could bring you around $15,000+ with total contributions irrespective of growth managers investments -- not bad, but then remember District Councils RVs or Rateable values of properties will increase as well over that 5 year period? At present they are well over the top due to resource and consent costs, staff & admin costs, safety amendments, CEO salaries, GST etc so will you in fact be better off after that 5 year period & will that property you are saving for increase from its present RV? Remember the old saying: borrow $50,000 from your Bank ---double it = $100,000 + 1/2 the original loan amount again = $25,000 immaterial of the interest rates & inflation & the approx loan of $50,000 will be = $125,000 you will pay on the loan approx. Now if you buy a house in Wellington @ $380,000 average you can work it out on your loan repayments. You save $80,000 cash (equity) & borrow $300,000. You will pay $750,000 back to the loan institution? Will you never pay this off if youre 45 yrs of age or older in your lifetime--something to think about????
  • What if GST goes up to 15% as predicted in October 2010?? Financial Institutions may not recover full GST so that a GST increase will either increase their costs or reduce returns to savers so watch what may happen to your funds in Oct?
  • Unemployment is now rising and is 6.8% August 2010 compared with 7.1% last year?? when the government said it would fall? Instead its rising well above the predictions. What about your job--is it safe; are your hours and workload being extended?
  • The USA is in such a high deficit now that China may stop buying USA bonds as the value of the dollar may fall? USA will become a bad risk for China & how will the USA ever pay this money back?
  • Do you know where your fees are being invested? if not ask as 60% are invested overseas & if the bubble bursts then so does your kiwisaver investment?
  • Finally if enough people invest in Kiwisaver will this replace the Pension scheme for those young ones as the baby boomers overburden the present fund & NZ gets itself deeper into debt as unemployment rises?

HERES THE DANGER:

  • 2012: What if your funds are being used by Banks for Rehypothecation purposes as has happened to MF Global & Hedge funds where your funds are now susceptible to being reinvested?? Do you know what this is will if not read this [ Check this out ]
  • Feb 2010: Peter Huljich used his own money to artificially top up his company's three KiwiSaver funds, which have become the first to be investigated by the Securities Commission. Mr Huljich, a director of Huljich Wealth Management with Auckland City Mayor John Banks and former National Party leader Don Brash. In March 2010 70,000 New Zealanders had signed up & now Peter Huljich has been dropped in favour of the Huljich Wealth Management former & Reserve Bank Governor and National Party leader Don Brash has taken over as the company's managing director and chief investment officer. Lets see if this will make a difference??
  • One good thing: March 3rd Reserve Bank governor Alan Bollard has now said all non bank deposit takers (NBDTs) will require credit ratings from one of three officially-sanctioned agencies in order to operate. BUT it does not stop these "finance companies" from making bad investments with your money?????????? so watch out.
  • But also in March 25th 2010 the Securities Commission is worried about unscrupulous marketing of Kiwisaver in getting people into the scheme. Section 35 of the Securities Act prohibits the offering of securities on a door-to-door sales basis. The commission believes high pressure, or coercive, or misleading selling were inappropriate for Kiwisaver so those being canvassed beware.
  • TheFrozen Funds group for investors which included many retirees who lost millions in funds marketed by ING and ANZ bank wants the government to review their status as default KiwiSaver providers.The 2 have KiwiSaver funds under management at $1.2 billion & are blamed for the losses by Frozen Funds. The pair misled investors in their Diversified Yield and Regular Income funds, which were frozen in March 2008 owing investors $533 million (they have paid out $45m??) but the group says its not enough protection for the over 300,000 Kiwisavers who could find themselves in the same mess in later years!!!!!!!!!!

" SO WHAT ABOUT THOSE UNDER THE $52,000 PER YEAR BRACKET"

Well many will not join the Kiwisaver as they are on the bread line now with small families and mortages and rents well beyond their paying means. Kiwis do not save fullstop on lower incomes as their needs like cars etc Sky TV, means they look at material items before savings plans & especially those who have left home to start working. In fact kiwi households are dissaving -- spending beyond their means by 14% (Reserve Bank) & Banks lend to young kids who wish to buy that car & really don't give a damn. As goods and services increase so will salaries and cost of living expenses & this has started as our dairy exports gain speed so cheese etc is on the turn. Contact Energy lifted their monthly costs in March 2010 so what about others like internet companies who charge in NZ by the GB used for what one uses??? a rip off---you are paying for air waves. In Thailand where many millions use internet theres no limit so why do they charge this in NZ? The cost of everyday items and utilities keep increasing. Its a no win situation in NZ & savings is one of those hard to do things. For those with no savings, no home of their own & one salary in the family with young children, there is no hope at all as inflation will outweight anything they wish to save for in their future. What will happen when the Government or finance companies running your Kiwisaver decide not to give any more topups or lose your money thats invested--- its a game of chance & theres hardly a rule in the book and nothing learn't from the past crashes.

Kiwisaver is designed to help people save for their retirement and we all know that the government will not be able to afford to pay Retirement benefits to the many now retiring. However they must appease the GREYs as thats their voting power hence you notice theres no asset test for pensioners as many do not even need this pension. Now the big influx of baby boomers coming on steam. In a way its a way for the Government to either reduce the retirement benefit if enough join or in fact cut the benefit right down. Lets face it this benefit is paid to all, even those with mega assets so this should be looked at first --- many do not need a retirement benefit and what about those on double benefits from the UK etc getting our Kiwi Benefit as well. Is this fair. Like any Government remember we use the MMP system whereby alliances outweigh what a real government should be doing. Its help each other style to be in power but the politicians don't care as they will always get their pensions use their credit cards & airpoints then beg "it was a mistake" & on it goes.

However Kiwisaver is a way for people to start saving for retirement as buying cars etc is not and even a mortgage today may not cover what the house is worth once paying it off. Remember the old saying if you borrow $10,000 from the bank ---double it--then half it again and thats right $25,000 you pay back immaterial of the interest and inflation rates. ALWAYS REMEMBER THIS AS YOUR FORMULA. So if you think paying a house off is an asset in fact it can be a never ending burden so the more you save the easier it becomes but on todays market with house prices increasing once again on the gravy trail little hope for those borrowing $300,000 plus unless of course you win lotto.

However the government needs to put the breaks on where these finance companies invest in to safeguard Kiwisavers? but even as these companies report on their financial situation some will be dishonest and kiwisavers will suffer?

WHAT THE USA SAYS:

 "It's all Bush's fault!! ..." we are in deep s...t so have to print more doleros!!!! & this will impact on NZ kiwisaver accounts as Standard & Poors now say we are a bad risk as we owe over $15 trillion?????????? 2012

The U.S. government has been running a Ponzi pyramid scheme since Social Security started in 1935. Young workers and their employers pay taxes, the government then pays their elders. As with anyone on the lower levels of a pyramid scheme, the young are promised that they would get their chance later with future younger generations doing the same? But what happens in all Ponzi schemes the pyramid becomes too large for the younger generation to continue to support those baby boomers.

[ Recession 2012 ] [ Whats Rehypothecation -mortgages 2012 ] [ Whats a reverse mortgage?? ] [ Banks & Subprime Mortgage ] [ Banks are loan sharks ] [ Failed Finance Companies July 2010-11 ] [ Finance Report 2010 ] [ Property Report May 2010 ] [ Buying Mortgagee Property Tips ] [ Kiwisaver good or bad Providers ] [ Bank Lending Report 2010 ] [ MF Global bust 2012 ] [ George Soros Mortgage answers March 2010-11 ]

WHY ARE MANUFACTURERS & BUSINESSES LEAVING NZ: [ Read the story ] The issues are economics nothing else and many a time the owner is blamed for moving when in fact he has no say in the matter otherwise he will go bust. However read the reasons why NZ has lost the plot ---[ Compare to Thailand ] & why more factories are heading abroad now. It makes sense.[ Check WHY THAILAND ] is better for Manufacturers & any Kiwi Company. Why NZ is lost [ NZ Deficit increases ] Yes we owe money????? [ Government $250m a week borrowing ] [ Kiwi Finance Co Crash ] [ Transmission Gully Impact costs ] [ Kiwi Family Savings Plan ] [ Benefit cuts good or meaningless ] [ Quit smoking-heres how ] [ Levin Business dying ] [ NZders lose out ] [ World population exploding ]

"I hope they don't change the Kiwisaver rules anymore "

 
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