The Milestone team has constantly argued that KiwiSaver is a fantastic investment for all those under age 65 years. We have urged clients, their families and friends to join as the joining incentive of a $1,000 kick start appeared too good to be true. The Budget 2015 removed the $1,000 kickstart making KiwiSaver less attractive for those who join and are not working. However, for those entering the workforce, KiwiSaver is still a fantastic investment vehicle in that:
- An employer must contribute a minimum 3% of the employee’s salary.
- There is the member tax credit, with the government matching 50% of your contributions up to a maximum of $521 per annum.
- If purchasing a first home, then all contributions (excluding the $1,000 kickstart if applicable) can be withdrawn as a house deposit plus the KiwiSaver investor may be eligible for an interest free non-repayable HomeStart grant.
The Milestone team takes a pro-active approach to providing financial advice to clients. Our role is to help clients identify what they wish to achieve financially in their lifetime and then work with clients to develop and maintain plans to achieve those goals. This often involves encouraging clients to be counter-cyclical in their investment approach, getting them to apply logic to a particular situation when all their emotions, media commentary, and comments from friends is suggesting a different approach. Getting as many people into KiwiSaver as early as possible is just one of many examples of how pro-active investment advice pays off.