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Kiwisaver for kids: what you should know

Kiwisaver for kids: what you should know

Written by R. A. Stewart

Some people may be asking if they should sign their kids up for kiwisaver. My answer to that question is a resounding “Yes” though some people might have a different opinion.

Kiwisaver is New Zealand’s retirement scheme. Anyone who is a New Zealand resident or citizen can join and take full advantage of the incentives the government provides for members of kiwisaver. There is no age restriction. Anyone can join from newborn to those already in retirement. However, the incentives do not kick in until a child reaches the age of 18 and stop at age 65, the retirement age in New Zealand.

An under eighteen year old or over sixty five year old in employment can make contributions toward their kiwisaver through their wages; this could be 2%, 3%, 4%, or 8% of their gross wages but their employer has no obligation to contribute to their kiwisaver, even though some choose to.

There is the option of making voluntary contributions toward kiwisaver and this is something which a lot of people do.

What are the benefits of someone under eighteen signing up for kiwisaver?

There are many and the number one reason is that it will improve a child’s financial literacy. It will help them understand how the markets operate and why their kiwisaver balances go up and down.

Another benefit of kids joining kiwisaver early is that it will give their relatives an opportunity to contribute to their kiwisaver; this means that by the time a child reaches eighteen, they may have  a more than useful kiwisaver balance. 

It is possible to use some of your kiwisaver to purchase your first home but you have to have contributed towards the kiwisaver for at least five years. It is not known if the years prior to a member’s eighteenth birthday count. Generally, most home deposit withdrawals are made by those aged over thirty so it may not be such a big deal.

Those aged under 30 are able to access their kiwisaver for a rental bond. The bond is returned to the kiwisaver account after it is returned by the landlord.

The other ways kiwisaver can be accessed prior to turning 65 is in the case of a terminal illness or going overseas permanently. Many folk have made kiwisaver withdrawals due to hardship and this number has increased during the Global Financial Crisis but it should only be as a last resort.

Investors have to go through a lot of hoops in order to access their retirement savings prior to retiring. The purpose of kiwisaver is to build a nest egg for your retirement and to access it early really defeats the purpose of it.

Some people argue, “You can’t take it all with you,” or “I am young.” This kind of thing will lead to certain outcomes. You will be dead and leave your family with financial issues to deal with or you will be broke. The habit of saving money is a habit which will enable you to get the most out of life and the sooner this habit is formed the better off your kids will be in the long run.

Their future self will thank them for it.

About this article: You may use this article as content for your blog/website or ebook. The information in this article is of the writer’s own opinion and may not be applicable to your own personal circumstances., therefore, discretion is advised.

Check out my other articles on www.robertastewart.com

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How Seniors Can Make Their Money Work in Retirement

Financial Freedom After 60: The Best Investment Options for Seniors

Written by R. A. Stewart

 

Your age is a crucial factor in establishing your savings and investing strategy. Your 20s, 30s, 40s, and 50s are your savings years. It is these years when you build up your assets. 

Your 60s and 70s can be considered your spending years. It is when you tick off items on your bucket list while you are able to.

That does not mean that you do not have to work, a lot of older people are taking this option, not because they cannot make ends meet on their pension, but because they enjoy what they are doing.

In New Zealand, retirees will have access to their kiwisaver account once they reach the age of 65. Money invested in kiwisaver will be in growth, balanced, or conservative funds. Most people during their working life opt for growth or balanced funds.

It is time to decide whether to stay with the status quo or invest in more conservative funds. 

Your age and your health are the two most important factors in deciding which fund to invest your money in. 

Older people do not have time on their side to overcome financial setbacks such share market falls and so forth, therefore if you are 60+ it is a good idea to lean toward more conservative investments but still retain some exposure to risk.

It is worth mentioning at this point that New Zealand financial advisor and writer Frances Cook has a formula for calculating how much exposure you should have based on your age, and it is this…

Subtract your age from 100.

If for example you are aged 60 then only 40% of your portfolio should be invested in the share market.

I do not necessarily agree with this formula and my exposure to the share market is more than her formula suggests I have.

However, that is a personal choice; one that I do not necessarily recommend to you because your circumstances will be different as they are for different people.

If you are connected to the internet and you have a lot of spare cash in your account then I suggest that you place most of your money into an account that is not connected to internet banking. This is to reduce your chances of becoming a victim of internet scammers. 

With internet banking being the norm, this could be difficult in the future though.

In any case I still believe that it will pay to arrange your finances so that if you fall victim to a scammer then not all of your money will be lost. 

Don’t leave all of your money in the one account for goodness sake as some victims of scammers have.

If you are traveling then make sure you don’t have access to your life savings because if you do then so will be a scammer if they manage to get hold of your login details. What I am trying to say is you should leave your entire life savings in an account which you use to do your daily spending. Keep it in a separate account from the account you do your day to day banking. The 

Scammers have all kinds of ways to trick people into handing over their login details.

Anyone can be a victim so don’t be proud by saying “I am not that stupid.”

As you get older you will have to invest more conservatively; that does not necessarily mean transferring from growth to conservative funds but investing some of your current savings into low risk accounts. The deciding factor is your timeline. How soon you need the money and funds which are going to be used within 12 months are best invested conservatively.

 

www.robertastewart.com

 

ABOUT THIS ARTICLE

This article is of the opinion of the writer and may not be applicable to your personal circumstances. Feel free to share this article. You may also use this article for your website/blog or as content for your ebook.

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Elder Abuse: what it is

Elder Abuse: what it is

Written by R. A. Stewart

Elder Abuse may be a term you may not have heard of. It is a term that is being used more frequently than in the past so what does it mean?

It is when someone who is of the older generation is being taken advantage of. The abuse may not need to be of a financial nature. As with all kinds of abuse it could come in a number of forms; financial abuse

Not repaying loans

Unauthorised taking of money or other assets

Scams that rely on developing a relationship with the older person with the intention of taking their money and assets. Dating scams is an example of this.

Use of home without contributing to the costs.

Psychological abuse

This comes in many forms and could be threats, intimidation, and hostility.

Control

This can be making decisions on the behalf of the elder person or taking authority over their everyday life.

Isolation

Lack of affection

Ridicule, humiliation, and general put downs.

Physical

Intimidation

Threats of violence

Neglect

This could be neglecting the physical and emotional needs of the person.

Abandonment

This could be someone who is responsible for the care of an older person not fulfilling their obligations.

Many victims of Elder Abuse do not speak about what is happening because they are dependent on others for support. Low self-esteem is another reason why incidents are not reported by victims of elder abuse.

Elder Abuse victims are not necessarily in their eighties or nineties; they could just as easily be in their fifties or sixties and being young does not necessarily mean that you are immune to Elder Abuse. It is not recognised as such in the younger generation.

Those who like to control others will employ the same strategies irrespective of the age of their victims. They will:

  1. Use pets to control others.

Many people in bad relationships stay in the relationships for fear of something happening to their pets. They feel as though they are held hostage and are unable to escape from their situation.

  1. Intimidate their victims

Control Freaks use intimidation as a tool to gain power over others and as a result it leaves victims very down trodden and with a low self-esteem.

  1. Isolate others

Controlling people will isolate others from the outside world leaving them with no means of communication with others. 

  1. Financially controls

Controlling people will keep those that they control financially dependent on them and this makes it hard for victims to leave the situation. 

There are organisations available to help those who are victims of elder abuse. It is just a matter of finding the courage to pick up the phone or to tell someone.

About this article

You may use this article as content for your blog or website. Feel free to share it with others.

Read my other articles on www.robertastewart.com

 

“Retire with Little Money” is your practical guide to achieving a comfortable and stress-free retirement on a limited budget. This ebook covers strategies to maximize your savings, reduce living costs, and make the most of available resources. From affordable housing options and healthcare savings tips to part-time income ideas and smart budgeting practices, every chapter is packed with actionable advice. Whether you’re approaching retirement age or just planning ahead, this guide will help you create a lifestyle that balances financial security with the freedom to enjoy your golden years. Embrace retirement confidently, even without a large nest egg!

 

If you enjoyed this article, maybe you will like this ebook, “Retire with little money.” Click on the link below to obtain your copy.

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Pros and Cons of Mature Dating

The Pros and Cons of forming a new relationship late in life

Written by R. A. Stewart

A guy in a backpacking hostel asked me if I was married, and I said, “I don’t see the point at my age”. He said, “Some people get married in their nineties.”. 

I told him, “I just don’t see the point in that”.

Honestly, why would one ever consider it at that stage of life?

I have heard it said, “Everyone deserves happiness in their life”.

That seems to suggest that the couple were unhappy being single and if that is the case then they have a problem.

There is a saying, “love is blind,” and that is an apt summary of these late in life marriages because there are financial implications for these relationships. The main one being property ownership because each partner in the relationship is now entitled to half of all assets owned by them both. That may be fair enough but that inheritance which was intended for children or grandchildren may not be legally binding. As I understand it, when a couple enters into a new relationship, (marriage) then it means their previous will is now null and void and that they have to write a new one.

It is likely that when one of the partner’s passes on then the relatives of the remaining partner will get everything.

That means nothing for the family of the deceased.

Now, this may sound morbid or selfish when one speaks about money and relationships, but all of this has to be thought through. 

It is rather naive to think that there are no gold diggers out there who are willing to take vulnerable men to the cleaners, and these women will hang out on the same dating websites as their prey.

As for who gets what when someone passes; here is the order of priority.

  1. The spouse or partner 
  2. Children of the deceased
  3. Parents of the deceased
  4. Siblings of the deceased

Note: In New Zealand, if a couple have been living together in a de facto relationship for at least three years then everything they own is considered matrimonial property. 

This includes Kiwisaver, New Zealand’s retirement scheme, but only those contributions made during the term of the relationship.

It is no secret that there are men of an older generation who have been the victims of dating scams. The number one red flag in these scams is that a woman half your age contacts you out of the blue.

The number two red flag is that she wants to hasten the relationship, and the number three red flag is that she sends you some revealing photographs of herself. 

If someone can tap into your ego, and make you feel good about yourself they are on their way to taking advantage of you. 

Another method scammers will use is to manipulate your emotions. She will come up with a hard luck story and tell you that she needs money or this or that will happen. This strategy is called “manipulation by guilt.”

It is when someone tries to get you to do something by making you feel guilty.

You would think that men in their later years have acquired enough experience of human character, but then, you know what they say, “Love is blind!”

A lot of romance scam victims are too embarrassed to come forward and go to their bank or the police, but if you know someone in this situation, let them know that it has happened to a lot of others too.It is also important to know what your grandparents are doing behind a computer screen because it could mean that your inheritance is being sent to some stranger in a far flung part of the globe. 

About this article:

This article is of the opinion and experience of the writer and may not be applicable to your personal circumstances, therefore discretion is advised. You are welcome to use this article as content for your blog or website.

Read my other articles on www.robertastewart.com

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Giving your money a job to do

Written by R. A. Stewart

It is one thing to earn money, it is another thing altogether to ask your money to do likewise. Most people know how to earn money from whatever job or career they have but fewer people know how to invest their money in order for their money to work for them. 

It is not just a matter of investing in this or that and expecting your wealth to increase, there are factors which must be considered and this will determine where you should invest your money.

It all boils down to your timeline. If you are investing for the long term, that is 10 years or more then growth funds may be your best option. The reason for this is that if there is a major market downturn then there is more time to recover from such a setback. If it is the short term you are investing for then you need to be more conservative otherwise, you may find that a major market plunge may reduce your savings just when you need the money.

Your investing strategy is dependent on your priorities and everyone’s priorities are different, therefore, don’t be talked into investing in something by well meaning friends who may not be on the same page as you are as far as investing for the future goes.

Saving and investing are good habits to develop and the earlier you start the better off you will be, not just in terms of increasing your wealth but also increasing your financial literacy. There is no substitute for experience and this can only be acquired by getting involved in the markets.

Fortunately, in this day and age, investing in the share market has been made easier for the man and woman in the street with all of these online investing platforms such as sharesies in New Zealand and Australia and Hatch in the US. There are a lot of others such as robin hood in the US.

A person who has their head screwed on the right way will have established clear financial goals and a job for their money. Here are some of the money goals which are quite common:

An emergency (rainy day fund)

Saving for a car fund

Saving for a house deposit fund

Saving for your retirement fund

Saving for an overseas holiday fund

Saving for an investment portfolio fund

On that last one. If you are building an investment portfolio .you are able to drip feed money into an investment rather than saving until you have say, a grand, before investing a lump sum into an account.

The advantage of investing a little bit into the markets regularly, whether that is every week or two weeks is that you will purchase shares or units at a lower price when the markets are down.

This is all some food for thought for those just starting out on their investment journey.

About this article: This is of the opinion and experience of the writer and may not be applicable to your own personal circumstances therefore discretion is advised.

You may use this article as content for your blog/website, or ebook.

Check out my other articles on www.robertastewart.com

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Book Review-Your Money, Your Future

Written by R. A. Stewart

There are a number of books on personal finance on the market and one of these is “Your Money, Your Future by New Zealand financial advisor Frances Cook. In this book Frances provides practical advice and tips on managing your finances and how to formulate a strategy for achieving financial independence. There is no size fits all when it comes to designing a life and Frances makes allowances for that. Here are some interesting points from the book which I want to share in this article.

  1. To calculate what percentage of your money should be invested in shares, deduct your age from 100. For example; if your age is 65 then 35% of your money should be in shares. I think that the majority of investors probably have a higher percentage of their money in shares than this formula suggests. It is really a case of your timeline as far as when you are going to use the money.
  2. Putting your money into a savings account may feel safe to some people but over a period of time that money is losing it’s value because of inflation. Your money has to outpace inflation and it won’t do that in a savings account. Only your emergency cash fund should be kept in a savings account and money used for utilities and everyday living costs.
  3. The rule of 72 explains how quickly you can double your money. It goes like this; simply divide 72 by the average rate of return on any investment. If the average return is 7% then it will take you 10 years to double your money (72 divide by 7).

This is the magic of compounding interest. This is all assuming that you do not take your profits but rather allow them to be added to the principal so that you are earning interest on interest.

  1. You cannot beat the market so buy the whole thing! Frances talks about diversification here and explains how this approach beats trying to time the market every time. There is a saying, “Its time and not timing which is the key to making money on the share market.”
  2. Retire to something not from something. Frances points out that life needs to have a purpose otherwise it will be meaningless. You have to have an end goal in sight for when you finish work. Your retirement plan does not have to involve spending, it could be spending more time with the family or gardening.

You may be able to find the book, “Your Money, Your Future” by Frances Cook on Ebay or Amazon if you live outside of New Zealand. In New Zealand, the Trademe auction site may have copies.

I have read a lot of books on investing and this one is one of the best. It contains several gems of advice relating to personal finance. Whatever your personal circumstances are, you will find this book helpful in pointing you in the right direction.

www.robertastewart.com