If you were meandering through your local mall and saw a $10 note lying on the ground, would you pick it up? What if it were a $100 note? Or a bundle of $100 notes?

In the latter case you might well suspect that a television camera was spying on you from somewhere or that someone had just robbed a bank. But you're unlikely to just leave the cash sitting there. Yet for the past few months, most New Zealanders have been doing just that - deliberately ignoring free money lying in their path.

Ever since Finance Minister Michael Cullen dropped his Budget bombshell that he had decided to spend billions of dollars subsidising the KiwiSaver retirement savings scheme, and would be forcing employers to chip in as well, the decision whether to join became a bit of a no-brainer.

Four months into the new KiwiSaver era, the Government claims to be delighted that more than 212,000 people - an unknown number of whom might still be in nappies - have already signed up. Yet curiously, as each week goes by, hundreds of thousands more are passing up the opportunity to bank an extra $20 a week tax-free, not to mention the extra $1000 you'll get as a one-off sweetener for being so quick off the mark.

So far, that's at least $360 of free money that non-KiwiSavers have missed out on (contrary to popular belief, the $1040 annual subsidy is paid for each week of membership, not as an annual lump sum). So what can be holding them back?

The answer, according to financial writer Mary Holm, whose book KiwiSaver: How to make it work for you has already sold a remarkable 25,000 copies, is that there is still widespread misunderstanding and bewilderment about the scheme.

During the past few months, Holm has held numerous seminars about KiwiSaver and has received an unprecedented number of letters and emails on the subject. Many people, she says, still don't seem to understand the basics.

In case you're wondering, Holm has indeed put her money where her mouth is. Even though she is in her mid-50s, she has already joined a high-risk scheme because that's what she believes is appropriate in her particular case. That's not necessarily, she hastens to add, what other people her age should do.

But for all her enthusiasm about KiwiSaver, Holm admits she doesn't believe the Government has made the right decision committing so much taxpayer money to the scheme.

Continue reading at :NZ Herald
Jump to section: Getting maximum returns from KiwiSaver

Obviously this poll is for New Zealanders only

I think Kiwisaver is good for people who wouldnt be saving regularly, because it takes the money out of their control, and its hard for them to dip into it. However, I think that people who know what they're doing could make lots more money saving their own way. (investing, etc)
Plus, the fact that Kiwisaver is unsecured and you have no idea what your money is being invested in (in most cases) scares me slightly. (I know that the chance of them losing my money is real low, but mleh)
Having said that, when I get a job I might KS because its easy (and try to save on the side as well)

$0.50 pay rise > Kiwisaver

0.02% Tax cut > Kiwisaver (based on a $40,000 income 20% current tax rate)

Employers being forced to cough up 4% for kiwisaver effectively means that in most cases (assuming you dont get made redundant, 4% is alot for big employers already thinking about out sourcing off-shore) you wont get that next pay rise your due for.

Also, i'm pretty sure kiwisaver is being used as a reason to not have tax cuts or to have smaller tax cuts.

I think that its a good idea to get more people to save, but at the end of the day, if your too retarded to know you need to save....
Does the government have a right to tell us what we can spend our money on?
(Kiwisaver allows you to access the funds when your retire or when you make a deposit on your first house)

Im not on Kiwisaver because self employed means i have to put monies into it manually, and then i cant use that capital to make business purchases or buy a new car =)

I dont know if anyone read the article [RTFA] but basically even the skeptics joined it.

As for tax cuts Kiwisaver essentially gives tax cuts (up to $1040 a year).

The article points out that in the first year of saving if you put in just over $1000 you will end up with $3000 in your account.

Quote:I think that its a good idea to get more people to save, but at the end of the day, if your too retarded to know you need to save....

Seems like the wrong way to be thinking about it. Consider: mass cubes dont save and therefore dont save. These cubes retire with no $ and get sick etc. In order to keep them alive $$$ therefore tax++ on younger people.

Sadly not everyones parents teach them the importance of saving.

Quote:Does the government have a right to tell us what we can spend our money on?

Firstly, you can opt out of Kiwisaver and secondly "KiwiSaver is a voluntary, work-based savings initiative to help you with your long-term saving for retirement."

I might also point out that (if the proposed legislation passes) employers will be contributing up to 4% of what you save.

So for me on a 45,000 income my employer will only really be putting in like $75/year (see http://www.sorted.org.nz/calculators/kiw...ick-calc/) which is really not that much.

According to the article most small-med businesses are in favour of KS only large businesses are having trouble implementing it.

Hmmm...

I guess i havent looked into it in depth enough, (seeing as i wont have employer contributions anyway) if its only $75 per year employer contribution then i guess thats ok (4% of $45,000 according to my calculator is $1800 per year)

Quote:mass cubes dont save and therefore dont save. These cubes retire with no $ and get sick etc. In order to keep them alive $$$ therefore tax++ on younger people.

^ ^
Your right, so tick to KS then.

Quote:As for tax cuts Kiwisaver essentially gives tax cuts (up to $1040 a year).

I would much rather have a $1040 tax cut, but thats just because thats what suits me better, it would be great if they had more flexible rules for self employed like being able to grab funds out of it for anything business related, that way they similtaneously encourage saving and promote business growth <---just thought of that then, good idea ?

^^ certainly except its a retirement savings plan not a business savings plan.

Quote:your employer will match your KiwiSaver contributions up to 4% (to be phased in over four years, starting with 1% of gross salary from 1 April 2008, and increasing by 1% each year to reach 4% of gross salary by 1 April 2011)

Source: KiwiSaver Homepage

Its up to 4% of the 4% of your income that you save. So I put $1800 into KS and the employer matched 4% of the $1800 well thats how I understand it anyways (I could be wrong)

Also (according to the article under the loopholes section) you can split kiwi saver to go into savings and to pay off your mortgage so basically >> put mass into mortgage then take out the $ from your mortgage account -_-;;; Don't know how long this loophole will exist.

Quote:put mass into mortgage then take out the $ from your mortgage account -_-;;;

^^
w00t, great idea

It's a good idea from the governments perspective to try and get the typical "Just chuck it on the credit card" New Zealander to save some money where they otherwise wouldn't. There are definatly better ways invest your money but a lot of people arn't really interested in investigating them. I personally think its targetted more to the people that dont understand/care about money and investing... and in the words of Henry Ford,

Quote:It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.

I think its an ok idea as New Zealand has a seriously bad culture of credit, but in saying that i wont be joining. Am quite confident my own investments can outperform what it has to offer.

Matt

BLACK PEOPLE DONT SAVE COUNT NAV OUT IM IN LOL