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Kiwisaver: To withdraw or NOT to withdraw?
I got my yearly Kiwisaver tax certificate yesterday.
It’s amazing how much it grows, despite the fact that I was on the automatic ASB conservative fund.
And, once again proving that all you need to do to get customers thinking about you, is to contact them every now and then, I’ve launched into ‘adjustment of Kiwisaver’ mode.
Firstly, I’m switching to Gareth Morgans scheme. I have only heard good things about it and him, and I think his scheme is the only one that made any actual money last year (am I wrong?)
Secondly, I switched from Conservative to a mixture of growth and balanced (slightly favoring growth)… I enjoy immensely the different perspectives on ‘risky’ – when you own a business nothing quite cuts it in terms of ‘risk’
Thirdly, I am wondering if I am better of to withdraw it all and throw it on my mortgage? I keep hearing that you should get rid of debt asap, but I’m not sure if a couple of thousand dollars will do an awful lot?
I have a major fear that if I do anything the Government will find out and change the law so as we no longer get tax credits etc unless we left al our money in there.
Hello, my name is Natalie, I have a business called 
July 27th, 2010 at 3:22 pm
Are you able to pull your Kiwisaver for mortgages? Its a retirement scheme, and I thought the only other avenue was to pull it for your deposit on a first home?
Remember that due to compound interest, $2k less debt today is worth plenty, but you are also spending your retirement nest egg! You are loosing the different in interests – if your mortgage is @ 8%, and kiwisaver returns 5%, the 3% difference is what you are “loosing”.
Lots of useful calculators here: http://www.sorted.org.nz/calculators
July 27th, 2010 at 5:01 pm
Just a comment on Gareth Morgan.
I have my Kiwisaver with him but the fact that he made money last year doesn’t indicate that he’s a good manager of funds.
In fact, there’s a documented phenomenon of investors ‘chasing returns’ where ‘lucky’ fund managers receive inflows of funds based on good profits in previous years which doesn’t mean the manager has any inherent skills.
In fact, Gareth Morgan is great due to a history over an extended period of beating the Fund Management market for returns adjusted for fees, being transparent with income and being a ceaseless advocate for suckers that end up invested in these horrible managed funds and being preyed on by an opaque market of inefficient or greedy practitioners. Sorry, that’s a rant and I sound like one of his lackeys but the returns of managed funds versus index funds is poor.
And he rides a motorcycle to boot.
July 28th, 2010 at 9:58 am
Take a look at today’s NZ Herald business section where you’ll see Gareth Morgan is one of the worst performing KiwiSaver fund manager’s to date. He talks the talk but obviously does not walk the walk. Perhaps he’s out on his motorcycle too much!
July 28th, 2010 at 11:16 am
Hmm just read that. Is investment for retirement treated in much the same way as politics? i.e we expect all the results in like 2 years, when we should really be thinking about the long term?
Or should they consistently be winning (I.e didn’t Gareth say in the article that they had performed well over FIVE years, even if the last TWO years werent so crash hot? I dont actually know!
Tim, yeah now I wonder if you are only allowed to take money out for a home deposit. Which is a bit stink buzz, especially because Kiwisaver hadn’t even been around long enough for me to qualify for the home loan deduction when I brought my place…
July 28th, 2010 at 11:31 am
haha, Ray just as well I don’t read the newspaper!
I’m happy in my ignorance :)