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  1. #61
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    Quote Originally Posted by 777 View Post
    Well that would be the dumbest advice she has ever received.
    Yep. At this stage of the markets - If Were not already in KiwiSaver, I would be at least looking at making the minimum contribution to a big bank conservative fund to become entitled for the annual credit.
    DYOR.

  2. #62
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    Mar 2010
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    Quote Originally Posted by SBQ View Post
    That defeats the purpose and looks like double dipping. Good reason why I told wifey to keep opting out of Kiwi Saver.
    No doubt kiwisaver saver has been a gold mine for fund managers and although I am not mad keen on investing in funds because of the fees.

    The $521 tax credit would be one reason to join Kiwisaver but when you say "opt-out" I am assuming your wife is working for wages. Therefore not joining Kiwisaver means she misses out on the compulsory employer contributions which would be like a 3% pay rise. An additional 3% of her gross wages less the employer contribution superannuation tax (ESCT) going straight into her retirement savings every pay day. That should more than cover the fees.
    Although I can't agree entirely with 777 I would suggest you relook at the pros and cons of joining Kiwisaver.

    There are other cons including having that money tied up until retirement(this could also be a pro). I imagine eventually they will require Kiwisaver funds to be turned into annuities at retirement so people don't blow it all. Especially if we ever start means testing NZ super. Although this is wild speculation at this stage and an annuity isn't the end of the world.

    My Kiwisaver strategy currently is to put it all in the most conservative fund and will switch back to grow after the next GFC.
    Last edited by Aaron; Yesterday at 11:00 AM.

  3. #63
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    Nov 2018
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    Quote Originally Posted by Aaron View Post
    No doubt kiwisaver saver has been a gold mine for fund managers and although I am not mad keen on investing in funds because of the fees.

    The $521 tax credit would be one reason to join Kiwisaver but when you say "opt-out" I am assuming your wife is working for wages. Therefore not joining Kiwisaver means she misses out on the compulsory employer contributions which would be like a 3% pay rise. An additional 3% of her gross wages less the employer contribution superannuation tax (ESCT) going straight into her retirement savings every pay day. That should more than cover the fees.
    Although I can't agree entirely with 777 I would suggest you relook at the pros and cons of joining Kiwisaver.

    There are other cons including having that money tied up until retirement(this could also be a pro). I imagine eventually they will require Kiwisaver funds to be turned into annuities at retirement so people don't blow it all. Especially if we ever start means testing NZ super. Although this is wild speculation at this stage and an annuity isn't the end of the world.

    My Kiwisaver strategy currently is to put it all in the most conservative fund and will switch back to grow after the next GFC.
    Having a background in finance, i'm not at all impressed with the whole NZ Kiwi Saver approach (keep in mind i'm speaking finance from a N. American point of view). Can you believe the insult I felt when speaking to countless of financial advisors in NZ when they could not tell me a clear cut example WITHOUT the advice of a SEPARATE TAX advisor? I questioned on tax minimisation and efficiency of the investments and they could not comment directly about taxation (regarding rules about FIF and FDR etc). Where I studied, attaining a CFA designation always accounts for taxation (meaning the person not only has to know accounting, but also taxation). It's a complete joke that the NZ advisor would charge out a fee for their service + another fee for a tax advisor. Just utter rubbish to think an investment advice does not include tax advice.

    Anyways, coming from the Buffet and Munger side of investing, i'm not convinced the 3% matching will cover the fees in Kiwi Saver on a "cumulative basis" over say 10 or 20 years. Buffet has won his wager bet last year that no hedge (or actively managed) fund could beat the market index (S&P500) and he presented this at his Berkshire annual meeting last year. What purpose does a Kiwi managed fund service when they just buy the low cost Vanguard ETF? Sounds like the bureaucracy that NZ investors would be subjected to under the FDR/FIF if they bought Vanguard funds directly.

    The $521 tax credit? That's called a bribe in my books.

    There is a real reason why share investing isn't a hot topic for NZ. The reason is that you have an asset class (real estate) where the capital gains can be untaxed. Now recent news says the Labour Gov't will introduce a CGT to address this issue but the opposing National Party may remove it if they win the next election. Either way, when you talk about the realm of investing, one CAN'T speak without the issue of tax minimisation and my crystal ball think the NZ equity market pales in comparison to the US equity market (from a risk reward point of view). But what am I to judge? We have high paying 'actively manged' Kiwi Saver funds that would tell Buffet and Munger is wrong.

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