Dusting off my crystal ball, I see KiwiSaver changing over the next few years. Firstly, a reasonable percentage of people will flock to join KiwiSaver, and some companies will be quick to include it as part of a total wage package.
National Super entitlements will be reduced for all the people drawing from KiwiSaver. Once people realise that the more you save for your retirement, the less National Super you will get, the government will move to make KiwiSaver compulsory.
Then the issue with super will be "Is 4% enough?" It wont be, of course, so the 8% will eventually become the starting point for new entrants and a new target of 12% of income (or higher) will be the compulsory amount we need to pay to manage our old age.
The remaining question will be what to do with the growing underclass that will avoid work because high taxes, compulsory superannuation and the high cost of transport getting to and from work will be a big disincentive to low paid workers, so why work? My prediction is that KiwiSaver contributions will one day attract a 2% per annum "management fee" which will be funneled to pay for the long term unemployed and sickness beneficiaries that were unable to contribute to their pension account.
For those in jobs, The shortfall for everyday living will be met by living off the credit card. With the current interest rate hikes, we are seeing people trapped paying 21% credit card rates. Maybe they can apply for hardship and draw on KiwiSaver funds? (See link below)
And KiwiBlog mentions [here] the gains students could make maxing out interest free loans to sink into KiwiSaver. Government sponsored double dipping. It's the kiwi way.
A Super Scheme is a good thing, but I think further thought needs to be put into the long term plan and translate this into a high level of certainty for current investors.
Meanwhile, time to roll all existing lines of credit into the mortgage and tighten the belt.
Bollard, did you ever stop to wonder why the people are not following your advice?
Related Links: Aussies think 6% interest rate too high and KiwiSaver too good to miss
[Minor update 5:40pm]
National Super entitlements will be reduced for all the people drawing from KiwiSaver. Once people realise that the more you save for your retirement, the less National Super you will get, the government will move to make KiwiSaver compulsory.
Then the issue with super will be "Is 4% enough?" It wont be, of course, so the 8% will eventually become the starting point for new entrants and a new target of 12% of income (or higher) will be the compulsory amount we need to pay to manage our old age.
The remaining question will be what to do with the growing underclass that will avoid work because high taxes, compulsory superannuation and the high cost of transport getting to and from work will be a big disincentive to low paid workers, so why work? My prediction is that KiwiSaver contributions will one day attract a 2% per annum "management fee" which will be funneled to pay for the long term unemployed and sickness beneficiaries that were unable to contribute to their pension account.
For those in jobs, The shortfall for everyday living will be met by living off the credit card. With the current interest rate hikes, we are seeing people trapped paying 21% credit card rates. Maybe they can apply for hardship and draw on KiwiSaver funds? (See link below)
And KiwiBlog mentions [here] the gains students could make maxing out interest free loans to sink into KiwiSaver. Government sponsored double dipping. It's the kiwi way.
A Super Scheme is a good thing, but I think further thought needs to be put into the long term plan and translate this into a high level of certainty for current investors.
Meanwhile, time to roll all existing lines of credit into the mortgage and tighten the belt.
Bollard, did you ever stop to wonder why the people are not following your advice?
Related Links: Aussies think 6% interest rate too high and KiwiSaver too good to miss
[Minor update 5:40pm]
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