Source: Radio New Zealand
RNZ’s money correspondent Susan Edmunds answers your questions. RNZ
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I’m 66 years old and working part time. Should I get my KiwiSaver out if there’s going to be a big recession? I can’t afford to lose it, it’s my life savings and I still have a small mortgage as well which is why I’m still working.
I don’t think you should change your KiwiSaver settings just because there’s the possibility of economic problems ahead.
But it might be a good idea to think now about what you’re invested in and why.
If you really cannot afford to see the balance drop, it may be a good idea to move to a conservative or even cash fund, if that’s not where you are already.
But if you were not expecting to need the money for another decade or so, it may be appropriate to take more risk.
If your investment is already in the right sort of fund, you should be able to just wait out any downturn. (In a story I wrote this week, Pie Funds chief executive Ana-Marie Lockyer noted that even though there is a lot of uncertainty at the moment, sharemarkets have been holding up pretty well – although that could change!)
If you’re not sure, you can check in with your KiwiSaver provider or an adviser to talk about it.
You didn’t ask about your mortgage but you could also consider whether it might work to withdraw some of your fund to pay off that debt. Many KiwiSaver funds have been providing higher returns than the interest rate charged on home loans in recent years but depending on what sort of fund you’re in, that might not continue to be the case if interest rates rise again, as expected. It might be worth weighing up what you’d save by paying off your home loan against what you can expect from your KiwiSaver.
I am 63 and last year decided to put my KiwiSaver into the highly aggressive Booster fund for 10 years. I am on a benefit and so can’t afford to contribute. I’m okay with risk. I only have about $1500 in it so not much as I had to buy a car four years ago with the $4000 I had. Do you think it was a good idea? I am happy to let it sit and not look at it going up and down all the time. In fact I haven’t looked at it since I put it in Booster. I liked that it was environmentally friendly.
I think this is fine. Normally you probably wouldn’t be advised to have your full KiwiSaver balance invested highly aggressively at 63, but if it’s only $1500 and you’re pretty relaxed about the balance moving around, it might work.
What are the rules for New Zealanders who are of retirement age, moving to Australia and their pension entitlement?
You may be able to get the Australian pension, depending on your income and assets.
Julia Bergman, general manager international, disability and generational policy at the Ministry of Social Development, says you’ll need to meet all the relevant eligibility criteria.
That includes being 67.
“To qualify for either New Zealand Super or the Australian Age Pension, people need to have been a resident of the relevant country for a certain number of years.
“Under the reciprocal agreement with Australia, time spent living in either country may count toward this requirement.
“Australian Age Pension is only available to people whose income and assets do not exceed a maximum threshold. This applies to New Zealand citizens living in Australia.
“If a New Zealand citizen in Australia is eligible for both NZ Super and an Australian Age Pension, Australia will reduce their Age Pension entitlement by the amount of NZ Super they receive.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
