Mary Holm financial writer and columnist

Independent and down to earth financial info you can trust
from Mary Holm, New Zealand's most widely read investment writer

Buy Online | Bulk Sales | Contents

The Complete KiwiSaver:
everything you need to know

You can buy Mary Holm's latest KiwiSaver book, published by Random House, at good bookstores, or buy it online:

Purchase from Good Returns Bookstore here.

Special offer – if you buy 4 books or more:

"The Complete KiwiSaver" normally retails for around $29.95. Take advantage of huge discounts if you buy copies for your extended family, employees, clients or associates - or suggest that the boss buys one each for you and your colleagues!

Prices for bulk purchases are:

4-10 copies = $12.95 per copy

11-29 copies = $10.95 per copy

30-100 copies = $9.95 per copy

100 + copies = negotiable

For further information, or to place an order, email Mary at mary@maryholm.com

What is the book about?

At a time when good financial news is rare, "The government’s changes have made the KiwiSaver scheme more flexible and accessible to more people," says Mary Holm in her latest book, The Complete KiwiSaver.

With the lowering of the minimum employee contribution from 4% to 2% — along with ongoing tax cuts — KiwiSaver is much more affordable. The drop to 2% will also appeal to people reluctant to tie up much money in the scheme. And changes to the first home subsidy make KiwiSaver clearly the best place to save for a first home.

"Sure, there are negatives, such as the end to the $40-a-year fee subsidy. And employees will no longer get bigger employer contributions in 2010 and 2011. But that won’t reduce KiwiSaver balances nearly as much as is commonly thought. And with more people joining, total KiwiSaver savings seem certain to increase," says Holm.

"Employees still get a terrific deal. In their first year in KiwiSaver, some low-income workers’ contributions are boosted more than five-fold by their bosses’ and government contributions, and they can stop contributing at that point if they wish. If they continue, their money will be tripled. What would otherwise be a $100,000 nest egg will be a $300,000 nest egg.

"And putting in 2% is hardly going to make them broke. Someone on $20,000 contributes less than $8 a week, and at $50,000 it’s less than $20 a week.

"While those on higher incomes don’t do quite as well, their contributions are always at least doubled. Their savings will be twice as big for no extra risk. That’s why everyone under 65 is mad if they don’t join."

With two popular KiwiSaver books now under her belt, Mary Holm knows the retirement scheme inside out, and nobody else has done such comprehensive research on it.

Her new book combines the best of her two previous books plus up-to-the-minute advice on the impact of all the changes made since the scheme was introduced. It also includes:

Extensive information on which providers offer what – and how to switch to a better one.
Updates to reflect changes in the financial world.
Advice on how to keep track of what’s happening in your KiwiSaver account, and on what to do if the records don’t look right.
Information from the government’s first annual report on KiwiSaver.
Answers to many questions and concerns expressed by readers of Mary’s columns and people attending her seminars.
Advice for the risk-wary.
Creative new ideas — from many New Zealanders — on how people in different situations can make KiwiSaver work best for them, while keeping risk to a minimum.

Broadly, the new book is divided into four "user-friendly" sections. There’s still widespread misunderstanding about the scheme, so first up Holm recaps on how the scheme works. The second section deals with how to get the best from KiwiSaver, and in the third section Holm looks at the most important decision: how to invest. Finally, she presents and analyses the results of a 100-question survey of all 33 KiwiSaver providers who offer funds to the public. All this is peppered with handy tips from Holm throughout.

There is still a lot of misinformation about KiwiSaver. Here are Mary’s key points to understand:

All non-employees, including beneficiaries and the self-employed, can afford KiwiSaver. They can join some KiwiSaver schemes and put in nothing ever — and still get money from the government.
Almost all employees can afford it. While most have to put in 2% of their pay for a year, after that they can stop all contributions. And 2% is pretty small.
The KiwiSaver incentives at least double and sometimes triple your money — hugely boosting your returns.
The first year is even better for everyone. Some part-time workers’ input can be boosted more than ten-fold.
Not all KiwiSaver account balances are volatile. In some, your balance is almost certain to always grow, never fall — like a bank savings account.
You don’t have to pay tax to get the so-called tax credit. It’s given to all KiwiSavers aged 18 to 64.
Many KiwiSaver investors will pay lower tax than they would on most other investments.
If you don’t normally file a tax return, that won’t change because of KiwiSaver. Tax is taken care of in the KiwiSaver scheme.
For each month you delay joining, you miss out on $87 of government money, plus any employer contributions. Over the long term, mucking around for a couple of years before you join means you miss out on heaps in retirement — around $100,000 for some young people.
KiwiSaver is more flexible than many realise, allowing you to vary your contributions, and to invest in a wide range of assets, including property.
Non-employees can stop contributing at any time, and employees can stop after a year, with no questions asked — or earlier if they are in financial difficulties.
If you stop working, you can stop contributing to KiwiSaver straight away.
While on a contributions holiday, you can still put in any amount you choose, including $1,043 a year to maximise the tax credit.
KiwiSaver schemes are not like finance companies. Take the advice in this book, and there is very little chance you will lose the money you put in.
Drip-feeding into KiwiSaver makes it pretty painless — and also happens to be the best and least worrying way to save.
When you die — before or after retirement age — your KiwiSaver money is paid to your estate, available for your heirs to spend.
Distrust of the government is no reason not to join. There is nothing a government is at all likely to do that would make you wish you hadn't joined KiwiSaver.
Other reasons for not joining hardly ever hold up to scrutiny.

UPDATES: For updates on material in "The Complete KiwiSaver", see the 'KiwiSaver Basics' page.

WHAT'S IN THE BOOK? Have a look through the contents below or read before you buy. Enjoy excerpts from Mary Holm's "The Complete KiwiSaver" in pdf format by clicking here. You can also read excerpts on the 'KiwiSaver Basics' page.

>>Back to top<<

Contents of "The Complete KiwiSaver"

Part One: Why KiwiSaver: How it has changed and why it’s still so good
Introduction: How’s it all going?

1: The KiwiSaver concept and rules

Who’s in and who’s out
Opting out
Joining
Your contributions — and stopping them
Incentives
Investing
Ownership
Getting the money out
The good news about tax
Two employer approaches
Keeping track of the money – or trying to

2: What’s new?

Changes that affect everyone
Changes that affect employees
Changes that affect employers
Will the changes reduce total savings in New Zealand?

3. What makes KiwiSaver so powerful?

The multiplier
Should everyone — even those with debt — join KiwiSaver?
‘But I can do better in other investments’
How fast your KiwiSaver account will grow

4: ‘But I’m worried about risk’

Early KiwiSaver returns got bad press
Finance company failures worry KiwiSaver investors
Not all KiwiSaver providers will survive
Conclusion

5: What else is holding you back?

You don’t want to commit to future contributions
You can’t afford KiwiSaver
You don’t want to tie up your money until NZ Super age
You’ve saved enough for your retirement
You’re already in a good super scheme
The government — or another future government - might change it
You think managed funds rip people off
You’re planning to go overseas
But what about…?

Part Two: Creative ways with KiwiSaver: Getting the best from the scheme

6: The smartest ways to contribute

7: The young — and the not so young

Under-18s and turning 18
55 to 64-year-olds

8: Investing ethically

9: Home ownership, mortgages and other debt

Help with buying a first home
No longer own your own home
Borrowing to be in KiwiSaver — on a mortgage or otherwise
Diverting money to pay off your mortgage

10: A helping hand

Assisting family or friends
Sponsoring someone into KiwiSaver

11: Heading overseas

12: Issues for people with disabilities

13: Making the most of your work situation

Non-employees can get the first year over and done with
Self-employed — employ yourself?

Part Three: What type of investments?: Which assets and what risk level are right for you?

14: Types of assets

The big 4

15: The first thing to understand

Not a dirty word

16: Which assets for you?

The choice
The path to what?

17: Five ways to reduce investment risk

Stay for the long term
Invest regularly, rather than with lump sums
Use low or no gearing
Avoid riskier fixed interest investments
Last but perhaps most important – diversify

18: Go offshore

A pipsqueak
'But don’t the markets all move together?'
Why not offshore?
Will Australia do for my offshore shares?
In conclusion…

19: Still can’t decide?

Part Four: Which provider? A guide to finding the best one for you

20: Who's who?

The providers
Switching provider

21: The right investments for you?

Varying risk levels
International diversification - a great idea
Single sector funds - if you know what you're doing
Special funds for first home buyers - is this necessary?
Risk adjusted for age - the low maintenance way

22: Ruling some out - or definitely in

Contributions - amount and pattern
Provider flexibility
Mortgage diversion
Ethical investing
Something different
'Why we’re the best'

23: Fees: a big and vexing issue

Ongoing fees
Other fees
Active or passive?

24: How providers are managed

New Zealand owned?
Trustees
Who manages the investments?
Unitisation (sorry about this ugly word!)
Sales commissions

Independent and down to earth financial info you can trust from Mary Holm, New Zealand's most widely read investment writer

Archives