May 25, 2025 • 41 mins
The Government is increasing the default KiwiSaver contributions for employees and employers, while halving their own contributions.
Employee and employer contributions will raise from 3% to 3.5%, while the Government's contributions will drop from $521.43 to $260.72.
But should the Government be halving their input?
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:12):
Send seven locos.
Speaker 3 (00:24):
Living this.
Speaker 4 (00:26):
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Stairs.
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Don't sing again.
Speaker 5 (00:36):
Yes, good afternoon, Welcome or welcome back to the Weekend
Collective at seven past five.
Speaker 4 (00:40):
My name is Tim Beverage.
Speaker 5 (00:41):
Now this by the way, the previous hour with health
with Carl McDonald and also the politics where we had
a well we talked a little bit about budgets talk
and also retirement as and we I had a bit
of a rant about the whole situation in Israel's and
Gaza towards the end, which got a lot of feedback.
Speaker 4 (00:57):
So thank you for all that, And if you.
Speaker 5 (00:59):
Can want to check out any of that, you can
go and listen to our podcast to the Weekend Collective,
which gets loaded pretty every hour. Basically once we've had
an hour, we load it up pretty quickly and you
go and check that out on iHeartRadio, News Talk set
be dot curted in ZEBA. Right now it is time
force smart Money and we have a little bit of
a chat about the key we saver and what we
saw come out in the budget, probably the big announcement
(01:21):
on money issues. Well, unless you're a business and you
love the increased right off of depreciation of a newly
acquired asset if I could, if I put that the
right way. But the government is increasing the default key
we saver contributions for employees and employers while halving the
government's own contributions. So it's going to be raised gradually
(01:42):
from three to three and a half percent to four
percent over the course of three years.
Speaker 4 (01:47):
Well, the government's contribution.
Speaker 5 (01:49):
And remember if you have forgotten the details of that, Basically,
if you put in twenty bucks a week I think
it was so a thousand bucks a year, you would
get topped up by the government by about five hundred.
Speaker 4 (01:58):
Now they've halved that.
Speaker 5 (01:59):
And should they be harving it, should they be cutting
it all together?
Speaker 4 (02:05):
Do you think of it?
Speaker 5 (02:05):
We're going to explore the question around kiwisa and also
we might to dig into the question around is raising
the age of super inevitable And it's one of those
questions of course people might be like, well, regardless of
what it is, I'm not going to be stopping working
at sixty five either. So joining me he is, Well,
he's been a regular on the show for some time now.
(02:27):
He's a financial author. His name is Martin Hawes, and
Martin joins me, Now, good, Matt, how you going? Yeah,
House in your book going very well.
Speaker 2 (02:36):
Thanks. It had seven weeks on the bestseller list, so
that was very gratifying, actually really good for me, really
good for the publishers. And it seems to be by
anecdotal evidence. That's about all I get. But anecdotally I
do get that it is selling really well, so that's excellent.
Speaker 5 (02:58):
When do you get the hard evidence, like here are
your royalties?
Speaker 2 (03:02):
Yes, that's right. And the the book publishing system is weird.
The author usually gets in advance and then they get
paid every six months six months in areas, sorry three
months in areas, every six months, three months in areas.
So I guess I won't know until September what sales
(03:28):
have been like till the end of June.
Speaker 5 (03:29):
Now I'm trying to remember what the titles don't tell me,
because I think it was because I think I tried
to come up with some colorful titles for it, but
you went with You went with something quite practical, and
I think you called it retirement ready, didn't you?
Speaker 2 (03:41):
Exactly? And the title is not the authors, so that
that's controlled by the publisher and the tract that that
set out. Now you know that the published consults with
and would probably accept most reasonable titles that the author
had written the book to. But the retirement Ready title
(04:04):
on that book came along, came along after I had
written the book.
Speaker 5 (04:07):
Oh, did you have a different title in mind?
Speaker 2 (04:10):
No, I didn't. I couldn't come up with them. And
I'm hopeless with titles. Well, I know, I know people
are good at them, but I'm not.
Speaker 5 (04:16):
Well, if you're writing a novel, of course, then a
title is can be captivating. It might tell you nothing
about it. You know, there's what's in a name. But
of course, when it comes to a book of advice
about getting ready for retirement, there is a very very
strong argument just don't be too mysterious, don't make people
second guess what's that about? And there's no second guessing
retirement ready. Well that's about.
Speaker 2 (04:37):
Yes. The problem with this book was there were a
couple of major themes. One was, yes I did I
didn't want to retire, but I did want to be
ready for retire if I became retired somehow or other.
And the other one was what I did with my
finances when I'd had a major disruption to my life. Yeah,
(05:00):
so you know, I sat down. So there's a strong
personal element, and I wanted that personal element and the
title somehow, but I couldn't figure out away. The publishers
couldn't figure out away. So they came up with retirement really,
and it's not a bad title. Actually, it's a good
Oh good.
Speaker 5 (05:16):
I'm glad to hear the anecdotal I love a bit
of anecdotal evidence.
Speaker 4 (05:19):
You know, I'm.
Speaker 5 (05:21):
Producing a concert's like how this says, Well, apparently they're
going quite what the figures with.
Speaker 4 (05:24):
Us, but apparently there's been a lot of interest.
Speaker 2 (05:26):
It's like, okay, Well, sometimes sometimes I like the hard
evidence of the advisers on our side. I love it,
you know, with a number ultimately. But otherwise, yeah, well
like actually quite good or pretty good or something like that.
If that is masking, it's not really all that good.
Speaker 5 (05:44):
Yeah. So the budget, let's what what stood out.
Speaker 4 (05:49):
Did you follow the budget? By the way, did you?
Speaker 2 (05:51):
Yes? I did, and I have done fifty years, I suppose,
you know. Usually I like to actually sit down and
listen to the budget. I had a couple of media
calls right in the middle of so I mussed a
fair bit of it. I think the I think the
thing that really stood out for me was keep you
(06:13):
safe as your outline before and increasing the default rate
I think is a good thing. From three to four
percent over a bit of time, but it needs to
go eventually to six percent because that would be a
total of twelve percent, and that would be matching Australia.
Now the Australians have figured out that. And I've never
(06:34):
done these numbers, but somebody will have done them. That
across a lifetime, you need to put acide about twelve
percent of your of what you learn over your life
to make yourself retirement ready to have enough?
Speaker 4 (06:49):
Can you explain what it means? Can you explain what
it means?
Speaker 5 (06:52):
I'm self employed, I've forgotten and my contributions aren't what
they should be. But when it says three percent, that
means what your three because you said six percent would
mean twelve percent.
Speaker 4 (07:03):
So how does it actually work for those people who
are like me? So I've been.
Speaker 2 (07:09):
I've been self employed since nineteen seventy seven. I think
it is so quite a while I have, but I
have to be across. It's the three percent is what
the employee puts on, and if the employee puts on
three percent, then the employee must also put on three percent.
(07:31):
So they are raising that from three percent, which means
that six percent is going un in total.
Speaker 4 (07:37):
Is that gross or after tax?
Speaker 2 (07:42):
I think I think that's where it changed. Yeah, I
can't remember which would try it changed if somebody will
do a quick Google search, and I'd better not say,
because I've got a fifty percent chance of getting right,
but only fifty percent. But what I'm saying is that
(08:03):
we need to get to a point where employees on
the whole, you know, you don't have to before take Yeah,
so that's that's what I thought, but I heated. So
we need to get to percent where we're getting twelve
percent in total, so six percent from the employee and
(08:24):
six percent from the employer. So that that was the
That was the first big thing. But the second big
thing really affects you town, and it doesn't so much
affect me because I'm over age sixty five anyway, But
that is the government contribution. The only thing that a
(08:45):
self employed person gets from key receiver is that government contribution.
Now they can contribute as an employee and as an employer,
but it's all their money anyways, that makes no difference.
So small businesses and those who are self employed are
effectively getting a fifty percent. Now this started life one
(09:07):
thy twenty was half and so it came down to
five hundred and ten or twelve or something, and now
it's coming down to two hundred and sixty dollars. And
that's a very small incentive to get self employed people
or small business owners.
Speaker 5 (09:25):
Because it was a no brainer at one stage, wasn't it.
You'd stuck in twenty a week and you got and
you've got extra money in there. In fact, the compound
interest I've been doing at least that and vactually he's
boosted my accounts and it's not great, but it's surprisingly
more than I thought it would be.
Speaker 2 (09:42):
Yes, yeah, and don't forget you've got a thousand dollars
kickstart as well. Now that was just canned and just
just cut off completely. So you did get one thousand
dollars upfront as soon as you opened the account, just
to get it.
Speaker 5 (09:58):
Going, just to get your take on it. In a second,
but I'm going to throw it out to you if
you're listening.
Speaker 4 (10:01):
One hundred and eighty ten to eighty.
Speaker 5 (10:02):
So at the moment, if you contribute, make a sufficient contribution,
I think it's twenty bucks a week or something, the
government will throw in another two hundred and sixty. I
think it's roughly now it was. Anyway, is that enough
of an incentive for you to keep going? Or do
you think it'll make a difference. We want your cause
on that one hundred and eighty ten and eighty or basically,
(10:23):
are your retirement savings up to you and your employer
and the government's got no business giving any more taxpayer
money to you anyway, given that they're going to be
pumping it out once you actually hit sixty five. What
do you think, Martin? Do you think it was a
mistake for them to coun it. I'd like the extra money,
but I can't blame it, to be honest, I.
Speaker 2 (10:42):
Would like to like them to have kept it, because
whenever I'm sitting down with somebody who's self employed, I
can say to them with a straight face and very honestly, look,
you should join us, because if you do, and you
put twenty dollars a week, and you'll get five hundred
dollars a year free money. Now that may not be
(11:03):
a whole lot of money of the scope of that
person's affairs. But it's not a bad payoff for filling
in a form.
Speaker 5 (11:11):
And well that's the argument why the government has no
business doing it, because it's just giving you money for
filling out a form.
Speaker 2 (11:18):
Yeah, but it's giving you money for starting to look
after your own, your own retirement in your own own
later life. And you know one of the prompts if
we keep fiddling with, fewer and fewer people will will
do it because you need certainty. It's a very long standing,
long long term scheme. My four year old granddaughter who's
(11:42):
getting twenty dollars a week into her keep Safer from
me and probably from other grandparents, but some beasts as well.
You know, she might be seventy years in keep QP
Saver before before she actually draws on it, and you
need stability within that.
Speaker 5 (11:58):
Have you done the calculation on what a what a
five year old will get if they were in the
scheme for you know, sixty seventy years just twenty bucks
a week, because I reckon it would add up to
fair good.
Speaker 4 (12:08):
Whack, wouldn't it. Even if it's just a poultry amunt
like that.
Speaker 2 (12:12):
It would and no I haven't. It would be easy
enough to do the calculation, so if I had my
hands free and my mind free. But because it's it's
really it's one thousand dollars a year going in four
seventy years, compounding at about say four percent. I'm going
to maybe somebody's sitting at home who can do that.
Speaker 5 (12:33):
I'm doing it right now because actually I've done a
few things recently using AI. When I was trying to
recalculate my mortgage. And sorry, if this is a story
I've told her now, I apologize. But I was trying
to work out how much benefit I would get if
I paid an extra so much per week off the mortgage,
how much more.
Speaker 4 (12:53):
Quickly I could pay it off.
Speaker 5 (12:54):
And I actually gave it to chat GPT and said,
these are the possibilities. Tell me what difference it makes.
Speaker 4 (13:02):
I'll tell you what.
Speaker 5 (13:03):
It was really very good and very quick, and it
gave me three scenarios. I think in the end, if
you do this, but if you did this, but that's
actually it is. It's quite a good tool because it
puts calculations of things at our fingertips. If we bother
to ask the question, doesn't it.
Speaker 2 (13:23):
Yes, it does. And the other place to go it
would be slower because you have to put the numbers
in would be sorted D D or got in there
and now you have to put the numbers in and
not just talk to a computer. One of the good
things about sort it is they'll prompt you with things
like investment returns and so forth, because you know when
(13:44):
you did that, I'd be interested to hear what number
you put for the annual return on investment.
Speaker 5 (13:51):
I said, future value of twenty dollars a week for
sixty five years, compounding at four percent.
Speaker 2 (13:57):
Okay, so you got the four percent pretty right, yep.
I mean it could be five or it could be three.
Speaker 5 (14:02):
But well, because you put in, let's face it, you
put it in a go a thousand bucks a year
for sixty five years for a start, and guess what
the result is. You probably could have a reasonable guess
at that.
Speaker 2 (14:14):
I would say three hundred thousand.
Speaker 4 (14:18):
Two hundred and fifty three pretty good. Two hundred and
fifty three thousand for twenty bucks a week. Yeah, I
mean it's pretty good.
Speaker 2 (14:25):
Yeah. Now there will be there will have been inflation
over that time, so that's not in real terms, No,
just before everybody gets So it's two.
Speaker 5 (14:32):
Hundred fifty three thousand dollars and sixty five years time
is not two hundred fifty three thousand dollars to no.
Speaker 2 (14:38):
So the one thing I would really encourage people to
do is to sign their children or their grandchildren up
and to contribute whatever they can.
Speaker 4 (14:49):
Now.
Speaker 2 (14:49):
I know there's a lot of people doing it hard
at the moment and they're not going to be able
to do it, but with the grandchildren in particular, even
even the children to get uncles, aunts, grandparents and so forth,
to contribute a couple of dollars a week, or for
five dollars a week or ten dollars a week or something,
(15:09):
because as you have just proved, it really does add up.
Speaker 5 (15:14):
Yeah, so we'll love your cause on the KEI we
saber thing as well. There are lots of questions around
that is the government right to be harving its contribution
because frankly, you know, the government's got other things that
should spend money on. Or is it what amount of
money would act as an incentive because aren't we know
it didn't work for a lot of people because the
number of people who took up that extra money from
(15:34):
the government was still only about was it a third
or a half of people who are eligible for it,
wasn't it?
Speaker 2 (15:39):
Yes, that's right. There are three million people in it,
but a lot of those will be children and so forth.
One of the things I think, you know, going back
to the to the budget is that government's performed a
bit of a sleight of hand here because what they've
done is they are saying loudly trumpeting the fact that
(16:01):
kiwi's under this arrangement, this new arrangement, will have more
on their KII saver accounts. What they're not saying is
they'll have more because you and that is the keep
safer person. You're putting it in and the employer are
putting the money in. So both of those entities, both
those people are putting more money in, whereas the government's
(16:23):
putting less. So you're going to have more, yes, but
it's not courtesy the government. The government's just really offloaded
the liability to employers. Well that's a pretty big call politically.
Speaker 5 (16:39):
Well the other one is because they're putting it up
from three to four percent but over three years. And
I can sort of understand that because they've given that
accelerated depreciation. I think I'm not sure if that's the
right term for newly acquired assets. They want to stimulate business,
and I guess they don't want to suddenly go hey, whack,
here's another one percent on your wage bill, because they're
(17:00):
all has you know, has a flow on effect, doesn't it?
Speaker 2 (17:03):
Yes, don't want to sound like the four o'clock session,
but the synicon he says, they are doing that now
because that is going to lead to growth next year
quite quickly. And what happens next year an election? Yeah,
so you know they're doing it. Yeah, not doing it
because they want they want to be showing growth.
Speaker 4 (17:24):
We'd love your calls on this.
Speaker 5 (17:26):
What where it's the government to make the change, right
to make the changes to key we saber upping it
from three to four percent over three years, where they
right to cut their own contribution. I mean, obviously for
you or me, they're not right in terms of our
own lack of reduced amount from the government. But were
they right from a bit of the big picture sort
of thing to do that? Give us a call eight
(17:46):
one hundred eighty ten eighty text nine to nine two.
My guest is Martin Hawes, author of a new book
which is just out a few months ago, called Retirement
Ready available on Sure at all good booksellers will be
back in Just to take twenty four past five, I thought,
(18:15):
let's walk back to Smart Money on the weekend, collecting
my guest as financial author Martin Hawes. The he's written.
I think it's seventeen books now, isn't it, Martin? I
have I kept up with it.
Speaker 2 (18:25):
No, no, no, it's twenty three behind twenty four.
Speaker 4 (18:28):
Oh yeah, twenty four.
Speaker 5 (18:30):
He's written a few books. Okay, anyway, let's take some
calls on Key We Saver. Allison.
Speaker 3 (18:35):
Hello, it's only twenty four. It's going to say. I'm
just going to say about the thousand dollars that they
don't get at the start of the Key We say.
They didn't mention that on the news. They went on
about the reduction from the five twenty to the two sixty,
but they didn't really mention that not getting the thousand dollars, now, did.
Speaker 2 (18:50):
They No, No, they didn't. But the thousand dollars up
front was the kickstaff, as they called it. Yeah, that's
old news that went maybe.
Speaker 3 (18:59):
Right when long time ago. Yeah, yeah, yeah, that reduction
that doesn't come in this students the following year, isn't
it coming up this journe? You still get the five twenty,
don't you.
Speaker 2 (19:11):
That's right, yes, exactly.
Speaker 3 (19:13):
It had been very good for me because I got
the going eighty. I think it started in about two
thousand and seven, didn't it. It's going about eighteen years.
So if you joined at the very start and you've
got your thousand and every year from then, I worked
it out, I've quite about ten thousand dollars, it's you
know whatever from getting this. So I was very happy
to be in it, and I'm sort of getting near
the end. The goldpost is getting very close, so I'm
(19:36):
quite happy. But I do feel a little bit sorry
possibly for people now that are wanted to get into it.
Now I think get in the half of the you know,
the two sixty what I would say, you know, it's
been good for me, but that's not so good for
the next line of people coming along. Now.
Speaker 2 (19:50):
Yes, don't forget those who are employed and under the
age of sixty five, and that's another issue that we
can talk about. But those who are employed are getting
that employee employee of contribution, and that's generally a lot
larger than the five to twenty or the two sixty
as it's going to be.
Speaker 3 (20:10):
Do they have a key we favor scheme in Australia,
not saying that we have it here? They don't have
that over there? Do they the key we savor? Do they?
Speaker 2 (20:18):
Well, they have no, they have compulsory super. So you
have to when you when you're working in Australia, you
have to contribute it. And I would see a lot
of clients who had worked for maybe five years in
Australia and they still had that super. The funds over there,
you can actually bring that back into a q WE
(20:39):
saving accountdown. Yeah, thank you very much.
Speaker 3 (20:43):
I just say to congratulations Tim on your high ratings
that you got for your shows.
Speaker 5 (20:51):
Yes, I did thank my panelists yesterday Martin because we
were hit number one nationwide which is good and an
upland as well.
Speaker 4 (20:59):
So thanks to guests like yourself and the conversations.
Speaker 2 (21:02):
We have fantastic will let me Mike can ngratulations.
Speaker 4 (21:06):
And are pretty happened with it now.
Speaker 5 (21:08):
Actually, just on that thing bringing funds over from Australia,
how complex is that?
Speaker 2 (21:14):
Not too complex? Now that we've got keV Saver Because
the Australians know that you're not just taking the money
out running around spending up.
Speaker 5 (21:22):
So they had to pay it into ato A, into
a account.
Speaker 2 (21:27):
Yes, or a keV saver like account, I think, but
most people take it, bring it over and put it
into into keV Saver. Now that there's a fair bit
of paperwork, probably, But I would think if you went
to your key Saver provider and said, look, I've got
ten thousand dollars in my Australian super what would happen?
(21:48):
Could you help me bring it back? Then they would
fall over themselves because they're getting extra money into their fund.
Speaker 5 (21:55):
Okay, because I did work in Australia for a little
while and then I found I had a little balance
and it's the compounding interest again still not great, but yes, Actually,
how do we put how do our funds compare with
how well the funds in Australia?
Speaker 4 (22:11):
You have attracked that sort of thing.
Speaker 2 (22:13):
No, I haven't, and I just have no idea how
that would work. One of the things that happens in
New Zealand is that New Zealand Keep you sav funds
tend to put a lot of money aside across into
international shares. So particularly US and the Australians probably do
(22:33):
that as well. What we do that they won't do
is put money into New Zealand shares now on the
whole and over a long periods of time, New Zealand
cheers do better than the others because it's higher risk
and the market has figured out as higher risks, so
that are around a better return from New Zealand New Zealand.
Speaker 5 (22:55):
Year, because there's no real reason necessarily to bring your
money over if you've got another pension fund if that's
performing well, in fact, spending on the exchange rate in
a way, aren't you out to say?
Speaker 2 (23:05):
The problem can be the exchange rates. So if there
was a reasonably a tract of an exchange rate at
the moment, you might be better to bring it over.
And also some people like to have it all nice
and neatly in one place.
Speaker 5 (23:17):
It's a personality thing, really, isn't it. Sometimes right, let's
take some more calls die hello.
Speaker 6 (23:24):
Oh hello. Actually I was just wondering, because that was
what my query was about, was what if you leave
You've got a kiwisaver and you leave to go to Australia,
how does it you know? Do you have to take
the funds over there? Do you have to still add
to it? And also, especially when like you're talking Martin
(23:46):
about signing up a grandchild, what if you if the
grandchild signed up, but actually the grandchild goes and lives
in Australia.
Speaker 2 (23:55):
Well, it's still their money. So if you went to
live in Australia, you wouldn't have to take your keywisaver
over there. You could just leave it there and it
would compound away, growing much more slowly, obviously because it
probably wouldn't have contributions. It certainly won't have a government
contribution if you're living in Australia.
Speaker 6 (24:16):
But you can actually move it over to establish it
with an Australian Super.
Speaker 2 (24:21):
I'm pretty sure you would be able to do that. Again,
you'd probably have to jump through a few hoops, but
you would be able because you're leaving New Zealand, you'd
be able to close down the key resaver and I
think it's after you've been away for a year or
something like that, and you could then put that money
into your Australian Super. If that's what you wanted to
(24:43):
do with.
Speaker 5 (24:44):
It, I'm sure someone would help you do it. To
die a few because the Australian key and the Australian
pension person would probably because you can choose your own fund.
It's not just one fund the same.
Speaker 6 (24:55):
I've had Australian super and it's much different to hear
with Kiwisaver. In Australia, you can actually nominate what super
fund you want. You can, you know, go according to
what results you get a range of choice.
Speaker 5 (25:12):
I think you'll be surprised with a lot of choice
here too, diesn't there.
Speaker 2 (25:16):
The certainly is and it is the same here, except
you're not looking around super funds. You're looking around for
key wesaver funds. It's just a different different In Australia
they're doing the same. They're scratching around looking at super funds,
but they will have to be registered for Australian super
just like a keysaver fund has to be registered.
Speaker 6 (25:36):
Absolutely, it's got to be properly above board.
Speaker 5 (25:39):
Yes, yes, absolutely, cheers, thank you. I actually I mean,
while we're talking Kiwi Saber, ironically, I was at the
launch on Budget Day for a new Kiwi Saver fund
which is down in your neck of the woods. Well
the fund, the launch was up here, but it's a
christ Church company called Concilium. We've just launched in New
fund And it was quite funny because one of the
(26:01):
presenters had done a present had a prepared a presentation
based on the existing rules, and he made something of
a joke about saying, well, I had all these graphs
modeled on three percent, but now I've got everything's changed
the government contribution, he says, So these these charts are
out of date as of about one hour ago.
Speaker 4 (26:21):
But it does raise the question, how do.
Speaker 5 (26:23):
You, you know, choose how do you choose a can we
have a fun because past performance is no preductor of
future performance, So how do people actually make their minds up?
But do you find they just go, well, i've got
my bank's got one, so I go with them.
Speaker 2 (26:38):
Yes, I think that's probably the biggest factor. So you know,
a n Z bank has it may not have quite
had thirty billion out of one hundred and twenty, but
it's something that's getting close to that if it's not
actually at thirty billion, And that's not because of the
best necessarily keep savior manager. It's because most people bank
(27:00):
with a bank, you know, it's the biggest bank, so
people like they have their money you know, all together,
and so when they go online to do their banking,
they could look at their kivsav at the same time.
So that's that's quite a factor. Outside of that, you know,
there are tour strand I'm not going to mention them
by name, but there are few that have advertised quite aggressively,
(27:24):
either about being cheap or about giving superior returns, those
kinds of things who have marketed themselves. And you know
that with television advertising and stuff like and that no
doubt has an effair, it's really difficult for somebody to
sit back and say what one will they be best.
(27:45):
The very first thing you've got to decide is what
level of risky you can to take, conservative, balanced or growth.
That's the number one that's the most important. And then
you've got to say, okay, so I'm going to go,
let's say gross. You've then got to try and figure
out who is the best growth investor over long pero
long period of time and it's likely to continue for
(28:07):
the future. Now I don't have a crystal ball anymore.
Speaker 4 (28:11):
Advised people.
Speaker 5 (28:11):
Obviously, did you have some of you identified as thinking
this is the way it is?
Speaker 2 (28:16):
Yes, I did. When I was an advisor. I certainly did,
but I was buying in research from morning Star, and
morning Star would make visits to the funds and they
would sit down with the fund manager and say what
are you doing here and what you're doing there, and
then they'd make it and then they would look at
historic returns and so forth, and then they would make
a judgment as to who is best. Morning Star also
(28:42):
and they give this that the public does a survey
every three months and that gives historic returns. But as
you rightly said, history is not necessarily a pointer to
the future. It's very difficult for the average punda to
figure this out. And my experience with it just talking
(29:02):
to people now that I'm no longer advisor, they generally say,
I'm just going to go with this provider because I
I don't quite say I like their advertising, but you know,
that's probably means like, oh, it's my bank. My bank
seems to be doing okay. They did four and a
half percent last last quarter. Is that good? Look? You know,
I don't know, because I'm not sitting down. It's a
(29:25):
it's a very difficult task to figure out just who
is likely to perform in the future. You can have
a look and see who's done well in the past.
Speaker 5 (29:35):
But yeah, well, actually you wont't to give us a
call on that. How did you choose yours? I mean to,
I'll be honest. I just went with my bank. But
now I've been at a conference and watching how they
do things, I'll probably be having another think about it.
But anyway, right, we won't. I won't indulge in any
free advertising for anyone at the moment, though, well, we'll
take a break. We'll come back with some calls in
just a moment. It's twenty one minutes to six News Talks.
Speaker 4 (29:57):
He'd be God, Yes, welcome back to the Weekend Collective.
Speaker 5 (30:10):
There's a smart Money with Martin Hawes on Tim Beverage
talking about ki We Savor and it's sort of evolved
to a discussion around super funds elsewhere as well, and
choosing your fund and how much you should put in.
Speaker 4 (30:22):
Georgie, Hello, Hello.
Speaker 7 (30:26):
In Australia. I started work in nineteen sixty and came
over here in sixty six, and the super involved medical
insurance as well then. I don't know whether it changed,
and I don't know if it was compulsory or not,
but I obviously paid into it.
Speaker 2 (30:50):
Yeah, I don't. I don't think it was compulsory back then, Georgie. No,
I don't. I don't think it was now. I wasn't.
I was around, but I was eight or somethings. Okay,
(31:14):
but I seem to remember compulsory super coming in. I
certainly remember the capital gainstacks can't coming in in nineteen
eighty nine, but I seem to remember compulsory super coming
in as well.
Speaker 7 (31:30):
Yeah, so it might have been the way I did
it up until then.
Speaker 5 (31:35):
Could be yeah, yep. Well, not a bad thing to
take the medical insurance if you can get it as well, Georgia. Yeah, gosh,
everything gets more expensive as you get older, That doesn't it.
Speaker 4 (31:47):
Right, Let's take some more calls. Joe, Hello, you know
are you good? Thanks?
Speaker 8 (31:53):
One thing you might not have known or somebody hasn't
told you that if you do not contribute to your
Austronian Super, you lose it to the next apartment and
the Text department hold it for a certain amount of time,
and if you don't get in contact with them, they confiscated.
Speaker 3 (32:15):
Is that an Yeah?
Speaker 8 (32:18):
Oh, and I know this because I was with Super
and Aussie from working there for twenty years, and I
left and went to Canada and then I came back
to New Zealand all five years ago, and I just
(32:39):
happened to ring my super son super in Australia just
to see how my super was going yea, And they said, oh,
you haven't been contributed to it. I said, no, I
don't live there anymore. They said, that's right. You now
have to contact the text department.
Speaker 5 (32:58):
Usually that sounds a bit strange, because yeah, that does
sound very strange.
Speaker 8 (33:03):
Well, I ran the text department in Australia with my
old text file number and everything, and they had the money.
Mm hmmm. And because I had contacted them in time,
I actually got it transferred from Australia to New Zealand
to my superhre.
Speaker 2 (33:23):
Well, that's for you to your kid, to your keV
savor John. Sorry, you did you bring it over to
your KIV saver here? Yes?
Speaker 8 (33:33):
I did. You can't obviously, you can't take it take
it out transferred here?
Speaker 5 (33:42):
Maybe the last maybe they lost track of you, Maybe
they lost track of your details, which would have been
the reason. Because I've had mindsetting in Australia for decades
and it's still.
Speaker 8 (33:51):
So you want to check with them that they still
got it. They hedn't wonder the Text department.
Speaker 4 (33:56):
Oh no, I keep in touch with that.
Speaker 5 (33:58):
I've still got it in a super account there. But
you have made me, You made me think I might
go and check it again.
Speaker 2 (34:06):
Can I can? I give people advice on on this
tom and that is that if you've got Australian super
and you are thinking of bringing it over to New Zealand,
you should contact your Kepi saver provider because that dealing
with us all the time and they should be able
to give you advice on the nuts and bolts of
bringing it over.
Speaker 4 (34:27):
Absolutely.
Speaker 1 (34:27):
Yeah.
Speaker 8 (34:28):
Well, I just got a form sent to me from
the Australian Text Department and I had to get all
the details from my kiwisaver. And there's a special number
in your kiwisaver that that the Text Department and Australia
need and they give you that and you put it
(34:49):
on the paperwork, send it back to Australia and then
Australia Text Department send it here.
Speaker 5 (34:55):
Okay, Well I've made a mental note to myself to
check mine. Thanks Joe, not a problem, yep, thanks Joe.
YESSI my producer said that if you don't. She's done
a bit of a google there that if you don't
apply for your DASP when leaving Australia, your super fund
will transfer your super money to the ATO as unplanned money.
That's probably post my time actually, because yeah, anyway.
Speaker 4 (35:17):
Hey Martin, what about.
Speaker 5 (35:20):
Are you better to pay off your Kiwi Saver to
put more into your Kiwi Saver? What's your view on
paying off mortgages and things like that, because if you know,
I mean, that's I'll be honest, that's my dilemma and
quite a few people. So for me, if I really
pump money into the mortgage, I could maybe get it
done in a few years now. And I sort of think, oh,
(35:42):
I could put a whole lot of money into Kiwi Saver,
But my brain tells me that unless I have an
incredibly well well performing Kiwi Saver, that money is that
goes off my mortgage is like an after tax profit,
isn't it.
Speaker 2 (35:56):
Yes, it's the general principle is that with investments. You know,
if you were standing there waving a check around that
you just received, do you put it into your mortgage?
Do you put into investments? I'm not talking for KEP
Saver necessarily, and the answer to that is almost always,
you'd better to pay off your mortgage because your mortgage
might be running it let's say six percent. You have
(36:19):
to pay that with tax paid dollars, so you're really
talking about having to get nine percent, you know, the
equivalent nine percent investment return. When it comes to kiwisaver.
You should contribute to kiwisaver so that you get the
maximum amount of free money. So in your case, you
(36:40):
put your twenty dollars a week, and that means that
you'll get your five hundred, five hundred and sixty dollars
I think it is at the and soon to go
to two sixty, sorry, five twenty. And if somebody was
a waging salary owner, they would be putting on three
(37:03):
percent of their salary if they possibly could, and then
they're getting three percent from their employer. So but in
your case, just put your twenty dollars a week and
then every speed dollar you've got pay off the mortgage.
Speaker 4 (37:16):
Yeah, good, you might do it.
Speaker 2 (37:18):
You might be able to get that nine percent investment return,
but you won't get it without taking a fair bit
of risk. And there's no risk in paying off your mortgage.
Speaker 5 (37:27):
Well, the other question is how i've I was thinking
what young person shouldn't be in a high growth fund
as well?
Speaker 4 (37:36):
In fact, at what stage should you pull out of
a high growth fund?
Speaker 5 (37:39):
Because I mean, I'm you know, I'm a bit older
than i'm I'm a generation EXA, so I've still got
a few years, you know, quite a few years to
go before I retire. But I'm starting to think, because
it's not a huge amount of money, I sort of think, oh,
why don't I just shove it in a bloody high
growth fund and see where.
Speaker 4 (37:57):
The chips for.
Speaker 2 (38:00):
That's fine. I think the high growth fund for younger people,
including yourself. I mean, everybody's younger than I am these days,
so I call everybody younger. But for a younger person
below the age of sixty, let's say they should be
in the high high growth fund unless they're a nervous
(38:23):
nolly because there are as a fairly big proportion of
the population. When we get a major downturn. You know,
we've just had that with Trump's tariffs and markets fail,
and so we had it with COVID, we had it
back in two thousand and nine, the Great Financial clock crisis.
These people when the markets fall. Seriously, they panic and
(38:46):
they take their money out, and they're Therefore, when they
take your money out, you're selling at a time when
you should really be buying. So one of the things
with kivisab is is to keep on contributing, because all
of the numbers that we do on kivsaver assumes that
you keep on tribute and come hell or high water.
Speaker 4 (39:07):
Yeah, wait, how many what?
Speaker 1 (39:09):
So?
Speaker 5 (39:09):
High growth funds are generally deemed to be safer over
a particular period, So you obviously wouldn't want to invest
in a high growth fund necessarily if it's just a
year or two or eighteen months. Now, over what period
can you sort of be thinking, well, the bell curve
of risk here is in a safe margin for me,
five years, three years, ten years.
Speaker 2 (39:29):
It's probably ten years for high growth, but just growth,
it's probably five to seven something like that. It's a
period of time where the markets won't be down for
that entire period, and so that there is time for
the markets to do their thing. Now, there's a few
instances of markets being down for thirty years Japanese sheer market,
(39:55):
but they're outlies statistically, you know, we can't sort of
work on that sort of stuff happening because it's extremely rare.
Speaker 5 (40:02):
Yeah, and no guarantees in life, of course, also need
death in Texas eight minutes to sex News talks, it'd
be and.
Speaker 4 (40:08):
Well that we've pretty much reached the end of the show.
Speaker 5 (40:11):
Any final parting words, Well, I've got one for a
pilot's and parting words from Bob on the high Growth
says I'm seventy five, but I don't intend to stop
via die. My daughter gets it, says Bob, so he's
just going to hang on with the High Growth Fund.
Martin Whore's any final final words of wisdom on the
Keiwi Saver.
Speaker 2 (40:26):
No, I think. I think Bob's dead right is effectively
investing for younger people so as children. So that's good.
One thing we didn't really cover, and it's my fault
didn't bring up the fact for sixteen and seventeen year
olds and now caught them by the keep we Saver rules,
which is a good thing because it means they'll get
the government contribution. That'll also get an employer contribution. There
(40:49):
I am again spending employer's money. Well it's a good thing.
It's not a good thing from their point of view.
Speaker 5 (40:56):
No, but good for us if you're an employee or whatever. Yeah, Hey,
great to catch up again, Martin. I look forward to look.
We had a bunch of texts. I didn't get to
apologize people. But you got to get in early and
we'll have a look at this issue again sometime. But Martin, Hey,
thanks very much mate.
Speaker 4 (41:10):
Good to see you.
Speaker 2 (41:11):
Okay, thank you, Tom, cheers.
Speaker 4 (41:12):
Don't forget.
Speaker 5 (41:12):
If you want Martin's book Retirement Ready as his latest book,
going Gangbusters, get it to all good booksellers.
Speaker 4 (41:19):
Next week we'll be with got a new guest, Todd Hamilton.
Speaker 5 (41:22):
He's an employment relations expert talking about how to employ
improve employer attention.
Speaker 4 (41:26):
Thanks for producer, Tyre Roberts. Will catch you next week.
Sunday six is next.
Speaker 1 (41:35):
For more from the Weekend Collective, listen live to News
Talk zed Be weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:12):
Send seven locos.
Speaker 3 (00:24):
Living this.
Speaker 4 (00:26):
Me trying to get away from.
Speaker 2 (00:30):
Stairs.
Speaker 1 (00:30):
Don't sing again.
Speaker 5 (00:36):
Yes, good afternoon, Welcome or welcome back to the Weekend
Collective at seven past five.
Speaker 4 (00:40):
My name is Tim Beverage.
Speaker 5 (00:41):
Now this by the way, the previous hour with health
with Carl McDonald and also the politics where we had
a well we talked a little bit about budgets talk
and also retirement as and we I had a bit
of a rant about the whole situation in Israel's and
Gaza towards the end, which got a lot of feedback.
Speaker 4 (00:57):
So thank you for all that, And if you.
Speaker 5 (00:59):
Can want to check out any of that, you can
go and listen to our podcast to the Weekend Collective,
which gets loaded pretty every hour. Basically once we've had
an hour, we load it up pretty quickly and you
go and check that out on iHeartRadio, News Talk set
be dot curted in ZEBA. Right now it is time
force smart Money and we have a little bit of
a chat about the key we saver and what we
saw come out in the budget, probably the big announcement
(01:21):
on money issues. Well, unless you're a business and you
love the increased right off of depreciation of a newly
acquired asset if I could, if I put that the
right way. But the government is increasing the default key
we saver contributions for employees and employers while halving the
government's own contributions. So it's going to be raised gradually
(01:42):
from three to three and a half percent to four
percent over the course of three years.
Speaker 4 (01:47):
Well, the government's contribution.
Speaker 5 (01:49):
And remember if you have forgotten the details of that, Basically,
if you put in twenty bucks a week I think
it was so a thousand bucks a year, you would
get topped up by the government by about five hundred.
Speaker 4 (01:58):
Now they've halved that.
Speaker 5 (01:59):
And should they be harving it, should they be cutting
it all together?
Speaker 4 (02:05):
Do you think of it?
Speaker 5 (02:05):
We're going to explore the question around kiwisa and also
we might to dig into the question around is raising
the age of super inevitable And it's one of those
questions of course people might be like, well, regardless of
what it is, I'm not going to be stopping working
at sixty five either. So joining me he is, Well,
he's been a regular on the show for some time now.
(02:27):
He's a financial author. His name is Martin Hawes, and
Martin joins me, Now, good, Matt, how you going? Yeah,
House in your book going very well.
Speaker 2 (02:36):
Thanks. It had seven weeks on the bestseller list, so
that was very gratifying, actually really good for me, really
good for the publishers. And it seems to be by
anecdotal evidence. That's about all I get. But anecdotally I
do get that it is selling really well, so that's excellent.
Speaker 5 (02:58):
When do you get the hard evidence, like here are
your royalties?
Speaker 2 (03:02):
Yes, that's right. And the the book publishing system is weird.
The author usually gets in advance and then they get
paid every six months six months in areas, sorry three
months in areas, every six months, three months in areas.
So I guess I won't know until September what sales
(03:28):
have been like till the end of June.
Speaker 5 (03:29):
Now I'm trying to remember what the titles don't tell me,
because I think it was because I think I tried
to come up with some colorful titles for it, but
you went with You went with something quite practical, and
I think you called it retirement ready, didn't you?
Speaker 2 (03:41):
Exactly? And the title is not the authors, so that
that's controlled by the publisher and the tract that that
set out. Now you know that the published consults with
and would probably accept most reasonable titles that the author
had written the book to. But the retirement Ready title
(04:04):
on that book came along, came along after I had
written the book.
Speaker 5 (04:07):
Oh, did you have a different title in mind?
Speaker 2 (04:10):
No, I didn't. I couldn't come up with them. And
I'm hopeless with titles. Well, I know, I know people
are good at them, but I'm not.
Speaker 5 (04:16):
Well, if you're writing a novel, of course, then a
title is can be captivating. It might tell you nothing
about it. You know, there's what's in a name. But
of course, when it comes to a book of advice
about getting ready for retirement, there is a very very
strong argument just don't be too mysterious, don't make people
second guess what's that about? And there's no second guessing
retirement ready. Well that's about.
Speaker 2 (04:37):
Yes. The problem with this book was there were a
couple of major themes. One was, yes I did I
didn't want to retire, but I did want to be
ready for retire if I became retired somehow or other.
And the other one was what I did with my
finances when I'd had a major disruption to my life. Yeah,
(05:00):
so you know, I sat down. So there's a strong
personal element, and I wanted that personal element and the
title somehow, but I couldn't figure out away. The publishers
couldn't figure out away. So they came up with retirement really,
and it's not a bad title. Actually, it's a good
Oh good.
Speaker 5 (05:16):
I'm glad to hear the anecdotal I love a bit
of anecdotal evidence.
Speaker 4 (05:19):
You know, I'm.
Speaker 5 (05:21):
Producing a concert's like how this says, Well, apparently they're
going quite what the figures with.
Speaker 4 (05:24):
Us, but apparently there's been a lot of interest.
Speaker 2 (05:26):
It's like, okay, Well, sometimes sometimes I like the hard
evidence of the advisers on our side. I love it,
you know, with a number ultimately. But otherwise, yeah, well
like actually quite good or pretty good or something like that.
If that is masking, it's not really all that good.
Speaker 5 (05:44):
Yeah. So the budget, let's what what stood out.
Speaker 4 (05:49):
Did you follow the budget? By the way, did you?
Speaker 2 (05:51):
Yes? I did, and I have done fifty years, I suppose,
you know. Usually I like to actually sit down and
listen to the budget. I had a couple of media
calls right in the middle of so I mussed a
fair bit of it. I think the I think the
thing that really stood out for me was keep you
(06:13):
safe as your outline before and increasing the default rate
I think is a good thing. From three to four
percent over a bit of time, but it needs to
go eventually to six percent because that would be a
total of twelve percent, and that would be matching Australia.
Now the Australians have figured out that. And I've never
(06:34):
done these numbers, but somebody will have done them. That
across a lifetime, you need to put acide about twelve
percent of your of what you learn over your life
to make yourself retirement ready to have enough?
Speaker 4 (06:49):
Can you explain what it means? Can you explain what
it means?
Speaker 5 (06:52):
I'm self employed, I've forgotten and my contributions aren't what
they should be. But when it says three percent, that
means what your three because you said six percent would
mean twelve percent.
Speaker 4 (07:03):
So how does it actually work for those people who
are like me? So I've been.
Speaker 2 (07:09):
I've been self employed since nineteen seventy seven. I think
it is so quite a while I have, but I
have to be across. It's the three percent is what
the employee puts on, and if the employee puts on
three percent, then the employee must also put on three percent.
(07:31):
So they are raising that from three percent, which means
that six percent is going un in total.
Speaker 4 (07:37):
Is that gross or after tax?
Speaker 2 (07:42):
I think I think that's where it changed. Yeah, I
can't remember which would try it changed if somebody will
do a quick Google search, and I'd better not say,
because I've got a fifty percent chance of getting right,
but only fifty percent. But what I'm saying is that
(08:03):
we need to get to a point where employees on
the whole, you know, you don't have to before take Yeah,
so that's that's what I thought, but I heated. So
we need to get to percent where we're getting twelve
percent in total, so six percent from the employee and
(08:24):
six percent from the employer. So that that was the
That was the first big thing. But the second big
thing really affects you town, and it doesn't so much
affect me because I'm over age sixty five anyway, But
that is the government contribution. The only thing that a
(08:45):
self employed person gets from key receiver is that government contribution.
Now they can contribute as an employee and as an employer,
but it's all their money anyways, that makes no difference.
So small businesses and those who are self employed are
effectively getting a fifty percent. Now this started life one
(09:07):
thy twenty was half and so it came down to
five hundred and ten or twelve or something, and now
it's coming down to two hundred and sixty dollars. And
that's a very small incentive to get self employed people
or small business owners.
Speaker 5 (09:25):
Because it was a no brainer at one stage, wasn't it.
You'd stuck in twenty a week and you got and
you've got extra money in there. In fact, the compound
interest I've been doing at least that and vactually he's
boosted my accounts and it's not great, but it's surprisingly
more than I thought it would be.
Speaker 2 (09:42):
Yes, yeah, and don't forget you've got a thousand dollars
kickstart as well. Now that was just canned and just
just cut off completely. So you did get one thousand
dollars upfront as soon as you opened the account, just
to get it.
Speaker 5 (09:58):
Going, just to get your take on it. In a second,
but I'm going to throw it out to you if
you're listening.
Speaker 4 (10:01):
One hundred and eighty ten to eighty.
Speaker 5 (10:02):
So at the moment, if you contribute, make a sufficient contribution,
I think it's twenty bucks a week or something, the
government will throw in another two hundred and sixty. I
think it's roughly now it was. Anyway, is that enough
of an incentive for you to keep going? Or do
you think it'll make a difference. We want your cause
on that one hundred and eighty ten and eighty or basically,
(10:23):
are your retirement savings up to you and your employer
and the government's got no business giving any more taxpayer
money to you anyway, given that they're going to be
pumping it out once you actually hit sixty five. What
do you think, Martin? Do you think it was a
mistake for them to coun it. I'd like the extra money,
but I can't blame it, to be honest, I.
Speaker 2 (10:42):
Would like to like them to have kept it, because
whenever I'm sitting down with somebody who's self employed, I
can say to them with a straight face and very honestly, look,
you should join us, because if you do, and you
put twenty dollars a week, and you'll get five hundred
dollars a year free money. Now that may not be
(11:03):
a whole lot of money of the scope of that
person's affairs. But it's not a bad payoff for filling
in a form.
Speaker 5 (11:11):
And well that's the argument why the government has no
business doing it, because it's just giving you money for
filling out a form.
Speaker 2 (11:18):
Yeah, but it's giving you money for starting to look
after your own, your own retirement in your own own
later life. And you know one of the prompts if
we keep fiddling with, fewer and fewer people will will
do it because you need certainty. It's a very long standing,
long long term scheme. My four year old granddaughter who's
(11:42):
getting twenty dollars a week into her keep Safer from
me and probably from other grandparents, but some beasts as well.
You know, she might be seventy years in keep QP
Saver before before she actually draws on it, and you
need stability within that.
Speaker 5 (11:58):
Have you done the calculation on what a what a
five year old will get if they were in the
scheme for you know, sixty seventy years just twenty bucks
a week, because I reckon it would add up to
fair good.
Speaker 4 (12:08):
Whack, wouldn't it. Even if it's just a poultry amunt
like that.
Speaker 2 (12:12):
It would and no I haven't. It would be easy
enough to do the calculation, so if I had my
hands free and my mind free. But because it's it's
really it's one thousand dollars a year going in four
seventy years, compounding at about say four percent. I'm going
to maybe somebody's sitting at home who can do that.
Speaker 5 (12:33):
I'm doing it right now because actually I've done a
few things recently using AI. When I was trying to
recalculate my mortgage. And sorry, if this is a story
I've told her now, I apologize. But I was trying
to work out how much benefit I would get if
I paid an extra so much per week off the mortgage,
how much more.
Speaker 4 (12:53):
Quickly I could pay it off.
Speaker 5 (12:54):
And I actually gave it to chat GPT and said,
these are the possibilities. Tell me what difference it makes.
Speaker 4 (13:02):
I'll tell you what.
Speaker 5 (13:03):
It was really very good and very quick, and it
gave me three scenarios. I think in the end, if
you do this, but if you did this, but that's
actually it is. It's quite a good tool because it
puts calculations of things at our fingertips. If we bother
to ask the question, doesn't it.
Speaker 2 (13:23):
Yes, it does. And the other place to go it
would be slower because you have to put the numbers
in would be sorted D D or got in there
and now you have to put the numbers in and
not just talk to a computer. One of the good
things about sort it is they'll prompt you with things
like investment returns and so forth, because you know when
(13:44):
you did that, I'd be interested to hear what number
you put for the annual return on investment.
Speaker 5 (13:51):
I said, future value of twenty dollars a week for
sixty five years, compounding at four percent.
Speaker 2 (13:57):
Okay, so you got the four percent pretty right, yep.
I mean it could be five or it could be three.
Speaker 5 (14:02):
But well, because you put in, let's face it, you
put it in a go a thousand bucks a year
for sixty five years for a start, and guess what
the result is. You probably could have a reasonable guess
at that.
Speaker 2 (14:14):
I would say three hundred thousand.
Speaker 4 (14:18):
Two hundred and fifty three pretty good. Two hundred and
fifty three thousand for twenty bucks a week. Yeah, I
mean it's pretty good.
Speaker 2 (14:25):
Yeah. Now there will be there will have been inflation
over that time, so that's not in real terms, No,
just before everybody gets So it's two.
Speaker 5 (14:32):
Hundred fifty three thousand dollars and sixty five years time
is not two hundred fifty three thousand dollars to no.
Speaker 2 (14:38):
So the one thing I would really encourage people to
do is to sign their children or their grandchildren up
and to contribute whatever they can.
Speaker 4 (14:49):
Now.
Speaker 2 (14:49):
I know there's a lot of people doing it hard
at the moment and they're not going to be able
to do it, but with the grandchildren in particular, even
even the children to get uncles, aunts, grandparents and so forth,
to contribute a couple of dollars a week, or for
five dollars a week or ten dollars a week or something,
(15:09):
because as you have just proved, it really does add up.
Speaker 5 (15:14):
Yeah, so we'll love your cause on the KEI we
saber thing as well. There are lots of questions around
that is the government right to be harving its contribution
because frankly, you know, the government's got other things that
should spend money on. Or is it what amount of
money would act as an incentive because aren't we know
it didn't work for a lot of people because the
number of people who took up that extra money from
(15:34):
the government was still only about was it a third
or a half of people who are eligible for it,
wasn't it?
Speaker 2 (15:39):
Yes, that's right. There are three million people in it,
but a lot of those will be children and so forth.
One of the things I think, you know, going back
to the to the budget is that government's performed a
bit of a sleight of hand here because what they've
done is they are saying loudly trumpeting the fact that
(16:01):
kiwi's under this arrangement, this new arrangement, will have more
on their KII saver accounts. What they're not saying is
they'll have more because you and that is the keep
safer person. You're putting it in and the employer are
putting the money in. So both of those entities, both
those people are putting more money in, whereas the government's
(16:23):
putting less. So you're going to have more, yes, but
it's not courtesy the government. The government's just really offloaded
the liability to employers. Well that's a pretty big call politically.
Speaker 5 (16:39):
Well the other one is because they're putting it up
from three to four percent but over three years. And
I can sort of understand that because they've given that
accelerated depreciation. I think I'm not sure if that's the
right term for newly acquired assets. They want to stimulate business,
and I guess they don't want to suddenly go hey, whack,
here's another one percent on your wage bill, because they're
(17:00):
all has you know, has a flow on effect, doesn't it?
Speaker 2 (17:03):
Yes, don't want to sound like the four o'clock session,
but the synicon he says, they are doing that now
because that is going to lead to growth next year
quite quickly. And what happens next year an election? Yeah,
so you know they're doing it. Yeah, not doing it
because they want they want to be showing growth.
Speaker 4 (17:24):
We'd love your calls on this.
Speaker 5 (17:26):
What where it's the government to make the change, right
to make the changes to key we saber upping it
from three to four percent over three years, where they
right to cut their own contribution. I mean, obviously for
you or me, they're not right in terms of our
own lack of reduced amount from the government. But were
they right from a bit of the big picture sort
of thing to do that? Give us a call eight
(17:46):
one hundred eighty ten eighty text nine to nine two.
My guest is Martin Hawes, author of a new book
which is just out a few months ago, called Retirement
Ready available on Sure at all good booksellers will be
back in Just to take twenty four past five, I thought,
(18:15):
let's walk back to Smart Money on the weekend, collecting
my guest as financial author Martin Hawes. The he's written.
I think it's seventeen books now, isn't it, Martin? I
have I kept up with it.
Speaker 2 (18:25):
No, no, no, it's twenty three behind twenty four.
Speaker 4 (18:28):
Oh yeah, twenty four.
Speaker 5 (18:30):
He's written a few books. Okay, anyway, let's take some
calls on Key We Saver. Allison.
Speaker 3 (18:35):
Hello, it's only twenty four. It's going to say. I'm
just going to say about the thousand dollars that they
don't get at the start of the Key We say.
They didn't mention that on the news. They went on
about the reduction from the five twenty to the two sixty,
but they didn't really mention that not getting the thousand dollars, now, did.
Speaker 2 (18:50):
They No, No, they didn't. But the thousand dollars up
front was the kickstaff, as they called it. Yeah, that's
old news that went maybe.
Speaker 3 (18:59):
Right when long time ago. Yeah, yeah, yeah, that reduction
that doesn't come in this students the following year, isn't
it coming up this journe? You still get the five twenty,
don't you.
Speaker 2 (19:11):
That's right, yes, exactly.
Speaker 3 (19:13):
It had been very good for me because I got
the going eighty. I think it started in about two
thousand and seven, didn't it. It's going about eighteen years.
So if you joined at the very start and you've
got your thousand and every year from then, I worked
it out, I've quite about ten thousand dollars, it's you
know whatever from getting this. So I was very happy
to be in it, and I'm sort of getting near
the end. The goldpost is getting very close, so I'm
(19:36):
quite happy. But I do feel a little bit sorry
possibly for people now that are wanted to get into it.
Now I think get in the half of the you know,
the two sixty what I would say, you know, it's
been good for me, but that's not so good for
the next line of people coming along. Now.
Speaker 2 (19:50):
Yes, don't forget those who are employed and under the
age of sixty five, and that's another issue that we
can talk about. But those who are employed are getting
that employee employee of contribution, and that's generally a lot
larger than the five to twenty or the two sixty
as it's going to be.
Speaker 3 (20:10):
Do they have a key we favor scheme in Australia,
not saying that we have it here? They don't have
that over there? Do they the key we savor? Do they?
Speaker 2 (20:18):
Well, they have no, they have compulsory super. So you
have to when you when you're working in Australia, you
have to contribute it. And I would see a lot
of clients who had worked for maybe five years in
Australia and they still had that super. The funds over there,
you can actually bring that back into a q WE
(20:39):
saving accountdown. Yeah, thank you very much.
Speaker 3 (20:43):
I just say to congratulations Tim on your high ratings
that you got for your shows.
Speaker 5 (20:51):
Yes, I did thank my panelists yesterday Martin because we
were hit number one nationwide which is good and an
upland as well.
Speaker 4 (20:59):
So thanks to guests like yourself and the conversations.
Speaker 2 (21:02):
We have fantastic will let me Mike can ngratulations.
Speaker 4 (21:06):
And are pretty happened with it now.
Speaker 5 (21:08):
Actually, just on that thing bringing funds over from Australia,
how complex is that?
Speaker 2 (21:14):
Not too complex? Now that we've got keV Saver Because
the Australians know that you're not just taking the money
out running around spending up.
Speaker 5 (21:22):
So they had to pay it into ato A, into
a account.
Speaker 2 (21:27):
Yes, or a keV saver like account, I think, but
most people take it, bring it over and put it
into into keV Saver. Now that there's a fair bit
of paperwork, probably, But I would think if you went
to your key Saver provider and said, look, I've got
ten thousand dollars in my Australian super what would happen?
(21:48):
Could you help me bring it back? Then they would
fall over themselves because they're getting extra money into their fund.
Speaker 5 (21:55):
Okay, because I did work in Australia for a little
while and then I found I had a little balance
and it's the compounding interest again still not great, but yes, Actually,
how do we put how do our funds compare with
how well the funds in Australia?
Speaker 4 (22:11):
You have attracked that sort of thing.
Speaker 2 (22:13):
No, I haven't, and I just have no idea how
that would work. One of the things that happens in
New Zealand is that New Zealand Keep you sav funds
tend to put a lot of money aside across into
international shares. So particularly US and the Australians probably do
(22:33):
that as well. What we do that they won't do
is put money into New Zealand shares now on the
whole and over a long periods of time, New Zealand
cheers do better than the others because it's higher risk
and the market has figured out as higher risks, so
that are around a better return from New Zealand New Zealand.
Speaker 5 (22:55):
Year, because there's no real reason necessarily to bring your
money over if you've got another pension fund if that's
performing well, in fact, spending on the exchange rate in
a way, aren't you out to say?
Speaker 2 (23:05):
The problem can be the exchange rates. So if there
was a reasonably a tract of an exchange rate at
the moment, you might be better to bring it over.
And also some people like to have it all nice
and neatly in one place.
Speaker 5 (23:17):
It's a personality thing, really, isn't it. Sometimes right, let's
take some more calls die hello.
Speaker 6 (23:24):
Oh hello. Actually I was just wondering, because that was
what my query was about, was what if you leave
You've got a kiwisaver and you leave to go to Australia,
how does it you know? Do you have to take
the funds over there? Do you have to still add
to it? And also, especially when like you're talking Martin
(23:46):
about signing up a grandchild, what if you if the
grandchild signed up, but actually the grandchild goes and lives
in Australia.
Speaker 2 (23:55):
Well, it's still their money. So if you went to
live in Australia, you wouldn't have to take your keywisaver
over there. You could just leave it there and it
would compound away, growing much more slowly, obviously because it
probably wouldn't have contributions. It certainly won't have a government
contribution if you're living in Australia.
Speaker 6 (24:16):
But you can actually move it over to establish it
with an Australian Super.
Speaker 2 (24:21):
I'm pretty sure you would be able to do that. Again,
you'd probably have to jump through a few hoops, but
you would be able because you're leaving New Zealand, you'd
be able to close down the key resaver and I
think it's after you've been away for a year or
something like that, and you could then put that money
into your Australian Super. If that's what you wanted to
(24:43):
do with.
Speaker 5 (24:44):
It, I'm sure someone would help you do it. To
die a few because the Australian key and the Australian
pension person would probably because you can choose your own fund.
It's not just one fund the same.
Speaker 6 (24:55):
I've had Australian super and it's much different to hear
with Kiwisaver. In Australia, you can actually nominate what super
fund you want. You can, you know, go according to
what results you get a range of choice.
Speaker 5 (25:12):
I think you'll be surprised with a lot of choice
here too, diesn't there.
Speaker 2 (25:16):
The certainly is and it is the same here, except
you're not looking around super funds. You're looking around for
key wesaver funds. It's just a different different In Australia
they're doing the same. They're scratching around looking at super funds,
but they will have to be registered for Australian super
just like a keysaver fund has to be registered.
Speaker 6 (25:36):
Absolutely, it's got to be properly above board.
Speaker 5 (25:39):
Yes, yes, absolutely, cheers, thank you. I actually I mean,
while we're talking Kiwi Saber, ironically, I was at the
launch on Budget Day for a new Kiwi Saver fund
which is down in your neck of the woods. Well
the fund, the launch was up here, but it's a
christ Church company called Concilium. We've just launched in New
fund And it was quite funny because one of the
(26:01):
presenters had done a present had a prepared a presentation
based on the existing rules, and he made something of
a joke about saying, well, I had all these graphs
modeled on three percent, but now I've got everything's changed
the government contribution, he says, So these these charts are
out of date as of about one hour ago.
Speaker 4 (26:21):
But it does raise the question, how do.
Speaker 5 (26:23):
You, you know, choose how do you choose a can we
have a fun because past performance is no preductor of
future performance, So how do people actually make their minds up?
But do you find they just go, well, i've got
my bank's got one, so I go with them.
Speaker 2 (26:38):
Yes, I think that's probably the biggest factor. So you know,
a n Z bank has it may not have quite
had thirty billion out of one hundred and twenty, but
it's something that's getting close to that if it's not
actually at thirty billion, And that's not because of the
best necessarily keep savior manager. It's because most people bank
(27:00):
with a bank, you know, it's the biggest bank, so
people like they have their money you know, all together,
and so when they go online to do their banking,
they could look at their kivsav at the same time.
So that's that's quite a factor. Outside of that, you know,
there are tour strand I'm not going to mention them
by name, but there are few that have advertised quite aggressively,
(27:24):
either about being cheap or about giving superior returns, those
kinds of things who have marketed themselves. And you know
that with television advertising and stuff like and that no
doubt has an effair, it's really difficult for somebody to
sit back and say what one will they be best.
(27:45):
The very first thing you've got to decide is what
level of risky you can to take, conservative, balanced or growth.
That's the number one that's the most important. And then
you've got to say, okay, so I'm going to go,
let's say gross. You've then got to try and figure
out who is the best growth investor over long pero
long period of time and it's likely to continue for
(28:07):
the future. Now I don't have a crystal ball anymore.
Speaker 4 (28:11):
Advised people.
Speaker 5 (28:11):
Obviously, did you have some of you identified as thinking
this is the way it is?
Speaker 2 (28:16):
Yes, I did. When I was an advisor. I certainly did,
but I was buying in research from morning Star, and
morning Star would make visits to the funds and they
would sit down with the fund manager and say what
are you doing here and what you're doing there, and
then they'd make it and then they would look at
historic returns and so forth, and then they would make
a judgment as to who is best. Morning Star also
(28:42):
and they give this that the public does a survey
every three months and that gives historic returns. But as
you rightly said, history is not necessarily a pointer to
the future. It's very difficult for the average punda to
figure this out. And my experience with it just talking
(29:02):
to people now that I'm no longer advisor, they generally say,
I'm just going to go with this provider because I
I don't quite say I like their advertising, but you know,
that's probably means like, oh, it's my bank. My bank
seems to be doing okay. They did four and a
half percent last last quarter. Is that good? Look? You know,
I don't know, because I'm not sitting down. It's a
(29:25):
it's a very difficult task to figure out just who
is likely to perform in the future. You can have
a look and see who's done well in the past.
Speaker 5 (29:35):
But yeah, well, actually you wont't to give us a
call on that. How did you choose yours? I mean to,
I'll be honest. I just went with my bank. But
now I've been at a conference and watching how they
do things, I'll probably be having another think about it.
But anyway, right, we won't. I won't indulge in any
free advertising for anyone at the moment, though, well, we'll
take a break. We'll come back with some calls in
just a moment. It's twenty one minutes to six News Talks.
Speaker 4 (29:57):
He'd be God, Yes, welcome back to the Weekend Collective.
Speaker 5 (30:10):
There's a smart Money with Martin Hawes on Tim Beverage
talking about ki We Savor and it's sort of evolved
to a discussion around super funds elsewhere as well, and
choosing your fund and how much you should put in.
Speaker 4 (30:22):
Georgie, Hello, Hello.
Speaker 7 (30:26):
In Australia. I started work in nineteen sixty and came
over here in sixty six, and the super involved medical
insurance as well then. I don't know whether it changed,
and I don't know if it was compulsory or not,
but I obviously paid into it.
Speaker 2 (30:50):
Yeah, I don't. I don't think it was compulsory back then, Georgie. No,
I don't. I don't think it was now. I wasn't.
I was around, but I was eight or somethings. Okay,
(31:14):
but I seem to remember compulsory super coming in. I
certainly remember the capital gainstacks can't coming in in nineteen
eighty nine, but I seem to remember compulsory super coming
in as well.
Speaker 7 (31:30):
Yeah, so it might have been the way I did
it up until then.
Speaker 5 (31:35):
Could be yeah, yep. Well, not a bad thing to
take the medical insurance if you can get it as well, Georgia. Yeah, gosh,
everything gets more expensive as you get older, That doesn't it.
Speaker 4 (31:47):
Right, Let's take some more calls. Joe, Hello, you know
are you good? Thanks?
Speaker 8 (31:53):
One thing you might not have known or somebody hasn't
told you that if you do not contribute to your
Austronian Super, you lose it to the next apartment and
the Text department hold it for a certain amount of time,
and if you don't get in contact with them, they confiscated.
Speaker 3 (32:15):
Is that an Yeah?
Speaker 8 (32:18):
Oh, and I know this because I was with Super
and Aussie from working there for twenty years, and I
left and went to Canada and then I came back
to New Zealand all five years ago, and I just
(32:39):
happened to ring my super son super in Australia just
to see how my super was going yea, And they said, oh,
you haven't been contributed to it. I said, no, I
don't live there anymore. They said, that's right. You now
have to contact the text department.
Speaker 5 (32:58):
Usually that sounds a bit strange, because yeah, that does
sound very strange.
Speaker 8 (33:03):
Well, I ran the text department in Australia with my
old text file number and everything, and they had the money.
Mm hmmm. And because I had contacted them in time,
I actually got it transferred from Australia to New Zealand
to my superhre.
Speaker 2 (33:23):
Well, that's for you to your kid, to your keV
savor John. Sorry, you did you bring it over to
your KIV saver here? Yes?
Speaker 8 (33:33):
I did. You can't obviously, you can't take it take
it out transferred here?
Speaker 5 (33:42):
Maybe the last maybe they lost track of you, Maybe
they lost track of your details, which would have been
the reason. Because I've had mindsetting in Australia for decades
and it's still.
Speaker 8 (33:51):
So you want to check with them that they still
got it. They hedn't wonder the Text department.
Speaker 4 (33:56):
Oh no, I keep in touch with that.
Speaker 5 (33:58):
I've still got it in a super account there. But
you have made me, You made me think I might
go and check it again.
Speaker 2 (34:06):
Can I can? I give people advice on on this
tom and that is that if you've got Australian super
and you are thinking of bringing it over to New Zealand,
you should contact your Kepi saver provider because that dealing
with us all the time and they should be able
to give you advice on the nuts and bolts of
bringing it over.
Speaker 4 (34:27):
Absolutely.
Speaker 1 (34:27):
Yeah.
Speaker 8 (34:28):
Well, I just got a form sent to me from
the Australian Text Department and I had to get all
the details from my kiwisaver. And there's a special number
in your kiwisaver that that the Text Department and Australia
need and they give you that and you put it
(34:49):
on the paperwork, send it back to Australia and then
Australia Text Department send it here.
Speaker 5 (34:55):
Okay, Well I've made a mental note to myself to
check mine. Thanks Joe, not a problem, yep, thanks Joe.
YESSI my producer said that if you don't. She's done
a bit of a google there that if you don't
apply for your DASP when leaving Australia, your super fund
will transfer your super money to the ATO as unplanned money.
That's probably post my time actually, because yeah, anyway.
Speaker 4 (35:17):
Hey Martin, what about.
Speaker 5 (35:20):
Are you better to pay off your Kiwi Saver to
put more into your Kiwi Saver? What's your view on
paying off mortgages and things like that, because if you know,
I mean, that's I'll be honest, that's my dilemma and
quite a few people. So for me, if I really
pump money into the mortgage, I could maybe get it
done in a few years now. And I sort of think, oh,
(35:42):
I could put a whole lot of money into Kiwi Saver,
But my brain tells me that unless I have an
incredibly well well performing Kiwi Saver, that money is that
goes off my mortgage is like an after tax profit,
isn't it.
Speaker 2 (35:56):
Yes, it's the general principle is that with investments. You know,
if you were standing there waving a check around that
you just received, do you put it into your mortgage?
Do you put into investments? I'm not talking for KEP
Saver necessarily, and the answer to that is almost always,
you'd better to pay off your mortgage because your mortgage
might be running it let's say six percent. You have
(36:19):
to pay that with tax paid dollars, so you're really
talking about having to get nine percent, you know, the
equivalent nine percent investment return. When it comes to kiwisaver.
You should contribute to kiwisaver so that you get the
maximum amount of free money. So in your case, you
(36:40):
put your twenty dollars a week, and that means that
you'll get your five hundred, five hundred and sixty dollars
I think it is at the and soon to go
to two sixty, sorry, five twenty. And if somebody was
a waging salary owner, they would be putting on three
(37:03):
percent of their salary if they possibly could, and then
they're getting three percent from their employer. So but in
your case, just put your twenty dollars a week and
then every speed dollar you've got pay off the mortgage.
Speaker 4 (37:16):
Yeah, good, you might do it.
Speaker 2 (37:18):
You might be able to get that nine percent investment return,
but you won't get it without taking a fair bit
of risk. And there's no risk in paying off your mortgage.
Speaker 5 (37:27):
Well, the other question is how i've I was thinking
what young person shouldn't be in a high growth fund
as well?
Speaker 4 (37:36):
In fact, at what stage should you pull out of
a high growth fund?
Speaker 5 (37:39):
Because I mean, I'm you know, I'm a bit older
than i'm I'm a generation EXA, so I've still got
a few years, you know, quite a few years to
go before I retire. But I'm starting to think, because
it's not a huge amount of money, I sort of think, oh,
why don't I just shove it in a bloody high
growth fund and see where.
Speaker 4 (37:57):
The chips for.
Speaker 2 (38:00):
That's fine. I think the high growth fund for younger people,
including yourself. I mean, everybody's younger than I am these days,
so I call everybody younger. But for a younger person
below the age of sixty, let's say they should be
in the high high growth fund unless they're a nervous
(38:23):
nolly because there are as a fairly big proportion of
the population. When we get a major downturn. You know,
we've just had that with Trump's tariffs and markets fail,
and so we had it with COVID, we had it
back in two thousand and nine, the Great Financial clock crisis.
These people when the markets fall. Seriously, they panic and
(38:46):
they take their money out, and they're Therefore, when they
take your money out, you're selling at a time when
you should really be buying. So one of the things
with kivisab is is to keep on contributing, because all
of the numbers that we do on kivsaver assumes that
you keep on tribute and come hell or high water.
Speaker 4 (39:07):
Yeah, wait, how many what?
Speaker 1 (39:09):
So?
Speaker 5 (39:09):
High growth funds are generally deemed to be safer over
a particular period, So you obviously wouldn't want to invest
in a high growth fund necessarily if it's just a
year or two or eighteen months. Now, over what period
can you sort of be thinking, well, the bell curve
of risk here is in a safe margin for me,
five years, three years, ten years.
Speaker 2 (39:29):
It's probably ten years for high growth, but just growth,
it's probably five to seven something like that. It's a
period of time where the markets won't be down for
that entire period, and so that there is time for
the markets to do their thing. Now, there's a few
instances of markets being down for thirty years Japanese sheer market,
(39:55):
but they're outlies statistically, you know, we can't sort of
work on that sort of stuff happening because it's extremely rare.
Speaker 5 (40:02):
Yeah, and no guarantees in life, of course, also need
death in Texas eight minutes to sex News talks, it'd
be and.
Speaker 4 (40:08):
Well that we've pretty much reached the end of the show.
Speaker 5 (40:11):
Any final parting words, Well, I've got one for a
pilot's and parting words from Bob on the high Growth
says I'm seventy five, but I don't intend to stop
via die. My daughter gets it, says Bob, so he's
just going to hang on with the High Growth Fund.
Martin Whore's any final final words of wisdom on the
Keiwi Saver.
Speaker 2 (40:26):
No, I think. I think Bob's dead right is effectively
investing for younger people so as children. So that's good.
One thing we didn't really cover, and it's my fault
didn't bring up the fact for sixteen and seventeen year
olds and now caught them by the keep we Saver rules,
which is a good thing because it means they'll get
the government contribution. That'll also get an employer contribution. There
(40:49):
I am again spending employer's money. Well it's a good thing.
It's not a good thing from their point of view.
Speaker 5 (40:56):
No, but good for us if you're an employee or whatever. Yeah, Hey,
great to catch up again, Martin. I look forward to look.
We had a bunch of texts. I didn't get to
apologize people. But you got to get in early and
we'll have a look at this issue again sometime. But Martin, Hey,
thanks very much mate.
Speaker 4 (41:10):
Good to see you.
Speaker 2 (41:11):
Okay, thank you, Tom, cheers.
Speaker 4 (41:12):
Don't forget.
Speaker 5 (41:12):
If you want Martin's book Retirement Ready as his latest book,
going Gangbusters, get it to all good booksellers.
Speaker 4 (41:19):
Next week we'll be with got a new guest, Todd Hamilton.
Speaker 5 (41:22):
He's an employment relations expert talking about how to employ
improve employer attention.
Speaker 4 (41:26):
Thanks for producer, Tyre Roberts. Will catch you next week.
Sunday six is next.
Speaker 1 (41:35):
For more from the Weekend Collective, listen live to News
Talk zed Be weekends from three pm, or follow the
podcast on iHeartRadio.
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