Kerre Woodham: Do the Kiwisaver tweaks go far enough?

Christopher Luxon has made his party's first election promise at a Christmas gathering for the party faithful of the Lower North Island. He said that they would lift the default KiwiSaver contribution rate, and eventually the changes would mean employees would see 12% of their earnings going into KiwiSaver, 6% from them, 6% from employers - a level that would match Australia's superannuation contribution rate, although of course in Australia, the whole contribution comes from the employer because they can afford it. The figure would come from hiking the default contribution rate from 3%, where it is today, to four, then 6% by 2032. The employer contribution would also rise to 6%, achieving that combined rate of 12% by 2032.

Christopher Luxon said under the changes, a 21-year-old who's earning $65,000 a year today would retire with a KiwiSaver balance of about 1.4 million, bare minimum. No one, it appears, thinks that this is a bad idea. The only concern is that the tinkering with KiwiSaver doesn't go far enough. Commentators say KiwiSaver needs to be compulsory, otherwise people would just opt out, thinking they can't afford the contributions. They do not realise when they're 21 that they can't afford not to contribute to KiwiSaver, because 65 comes far faster than you can ever possibly imagine.

Others, like Milford Asset Management Kiwi Saver head Murray Harris, says National needs to look at improving other moving parts.

Fundamentally, this is a good announcement, but there's a lot of moving parts with KiwiSaver. And I think what we need to see is what's the long-term strategic plan for KiwiSaver and what are the settings that are going to be set for the long-term future? Because at the moment you do have the so-called total compensation where your employer can pay you out of your pay, the employer contribution. Now that should be scrapped. That's another one of the settings that National haven't announced or included in this announcement. And there's there are others as well that we need New Zealanders to be really confident that KiwiSaver is going to be set for the future, there isn't going to be tinkering with it every time we get a change in political party, and that they can be confident that their long-term savings and retirement savings for the future are going to be as they expect.

Yes. Chris Hipkins says it's a good thing to increase retirement savings. The transition is the key. The policy may encourage employers to Uberise their workforces by turning erstwhile employees into contractors.

I would love to hear from those of you who have just started in the workforce perhaps, who have been in the workforce for about two or three years.

Where does your pay packet go? In terms of what you're paying back. You might have a student loan. When it comes to KiwiSaver, how much can you afford to put in? Do you accept, as somebody who has just entered the workforce, that you're going to need to save for your retirement? I I'm pretty sure that message has got through to the next generation that there's going to be a real necessity for feathering your own nest.

You might think when you first start off with your paying back of your student loan and the like, saving for a house, that KiwiSaver's just there to get that deposit on a home. Or you might want a couple of years of lavish spending because you've been living as a student, living on the low-cost pittas from the takeaway shop and the two-minute noodles. You want to know what it feels like to have money to splash around so you'll pay back your student loan and then you'll think about KiwiSaver.

How many of you are squirrelling away your nuts, so to speak, because you understand that the sooner you start saving with compound interest, the better off you're going to be. When it comes to those who have recently retired, I'd really like to hear from you too. So you might have stopped work a couple of years ago. Do you have enough invested and saved to get by? Did it come as a bit of a shock? Or was it pretty much as you expected that with the investments you had, the savings you had, the house that you'd paid off, that combined with the super, you're just fine.

There are a lot of people, I think, who don't realise that when it comes to being poor, it's pretty rubbish - but being poor and old is doubly rubbish.

And unless you start saving at a very young age, even a little bit, like look at the Rich Dad Poor Dad, even putting 10 bucks a week away, getting into that habit of saving is the best thing you can possibly do for yourself. I wish I'd had it hammered home to me when I first started work.

There are good savers, like being good at languages. People are who are good at budgeting, and then there are hopeless ones. But even hopeless ones need to know that even a little bit set aside every payday is going to pay off in the long run.

I think that message has got through, but I'd love to hear from those of you who have just started work and those of you who have just finished work.

Do you have enough to save if you're younger? And if you're older, do you have enough to live on?

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