Speaker 1: Hilda.
Speaker 2: I'm Chelsea Daniels, host of the front Page, The Ends
Speaker 2: at Herald's daily news podcast. The podcast is taking the
Speaker 2: day off as the country marks and Zach Day. Instead,
Speaker 2: we're presenting an episode of The Prosperity Project, The Herald's
Speaker 2: Personal finance podcast. Listen as host Nadine Higgins talks with
Speaker 2: personal finance columnist Mary Holm about what you need to
Speaker 2: know about Kiwi Saver, including what the most important thing
Speaker 2: to consider is when picking a provider. If you enjoyed
Speaker 2: the episode, follow The Prosperity Project wherever you get your podcasts,
Speaker 2: and we'll catch you back on Monday for another look
Speaker 2: behind the headlines.
Speaker 3: Yilder, I'm Nadine Higgins, and welcome to your personal finance podcast,
Speaker 3: The Prosperity Project. On this podcast, I'm on a mission
Speaker 3: to empower you financially. I am a columnist and a journalist,
Speaker 3: an investor, a financial advisor, and the mum of a toddler.
Speaker 1: But I do not claim to be the font of
Speaker 1: all knowledge.
Speaker 3: I'm still figuring it out too, and that's why I'll
Speaker 3: be bringing you the experts and mining their big brains
Speaker 3: for all the things you and I need to know.
Speaker 1: Every week.
Speaker 3: More than three point three million New Zealanders are in
Speaker 3: Kiwi Saver and we now have more than one hundred
Speaker 3: and ten billion dollars invested. But too many of us
Speaker 3: are not making the most of the scheme. So today
Speaker 3: we're going to get some guidance to ensure that you
Speaker 3: are and joining us as finance expert columnist and author
Speaker 3: Mary Holm, who has just revised and updated her eighth book,
Speaker 3: Rich Enough. Hi, Mary Hei Nadine, It's so lovely to
Speaker 3: be talking to you. I've been a longtime reader, first
Speaker 3: time interviewer.
Speaker 1: Same.
Speaker 3: What are some of the ways that we Kiwis who
Speaker 3: have signed up to Kiwi Saber are getting it wrong?
Speaker 1: Yeah? Well, firstly, just not contributing. I mean, obviously people
Speaker 1: sometimes have to take a break if they lose their job,
Speaker 1: although even then perhaps they could still put twenty dollars
Speaker 1: a week, and it depends on the situation. Twenty dollars
Speaker 1: a week will get you the maximum government contribution, and
Speaker 1: so it's really good if people can keep doing that
Speaker 1: or even five dollars a week, just to keep the
Speaker 1: habit rolling apart from anything else. But beyond those sort
Speaker 1: of situations, people I think take what used to be
Speaker 1: called contributions holiday and is now called a saving suspension
Speaker 1: to make it sound a bit less appealing, like a holiday. Yes, yes, yeah,
Speaker 1: and then not getting back into the contributing later.
Speaker 3: And it's one of those things that maybe goes into
Speaker 3: the too hard basket they have life edmund basket, and
Speaker 3: once they're out, they just don't get.
Speaker 1: And think it, you know, possibly think it's quite a
Speaker 1: hateful to get back in, but it shouldn't be. It
Speaker 1: should be really easy to get back in. And peaking
Speaker 1: speaking from the perspective of someone who's been around a
Speaker 1: while and did some retirement savings back in the seventies
Speaker 1: in America when I worked in journalism over there, that
Speaker 1: money that I then left in America has grown hugely.
Speaker 1: It's really wonderful for young people to get in and
Speaker 1: keep contributing, and by the time they get to retirement
Speaker 1: sort of age, it's huge. You know, the growth is huge.
Speaker 3: And that's what they mean by time is your greatest
Speaker 3: ass that you start young and you've just got decades
Speaker 3: for that money to compound and grow exactly.
Speaker 1: I mean, these the young ones, a lot of them
Speaker 1: are going to retire with a million and kiwi saving,
Speaker 1: especially if they go into the higher risk funds that
Speaker 1: tend to have higher returns. And we should know that
Speaker 1: a million dollars then probably won't buy as much as
Speaker 1: it does now, but it's still going to buy a
Speaker 1: pretty nice retirement. So we want people to just be
Speaker 1: if you have to take a little break, take it,
Speaker 1: but be really religious about getting right back into contributing.
Speaker 3: Yeah.
Speaker 1: Absolutely, you mentioned the higher risk funds. Yes, is that
Speaker 1: one of the other mistakes that we're making that we're
Speaker 1: all a bit too nervy about taking on risk. We're
Speaker 1: not all that way. I mean, some people take on
Speaker 1: going to a high risk fund and then panic when
Speaker 1: the markets go down, and so if they really really
Speaker 1: can't cope with that volatility, they shouldn't have been in
Speaker 1: that fund in the first place. But there are a
Speaker 1: lot of people who are the opposite, in particular women.
Speaker 1: There's quite a lot of research to suggest that women
Speaker 1: tend to go into the lower risk investments and end
Speaker 1: up retiring with a lot less money, because it makes
Speaker 1: a big, big difference over the years.
Speaker 3: The reason I laughed then is I think maybe you
Speaker 3: only know what your risk profile is when things are volatile,
Speaker 3: because when it's all going up, you can say, great,
Speaker 3: take on lots of risk, because it doesn't feel risky
Speaker 3: the fair assumption.
Speaker 1: Yes, I think so. I mean in early twenty twenty,
Speaker 1: when the market's really plunged, when COVID broke out, that
Speaker 1: was the first time for a lot of people that
Speaker 1: their Kii Saber had gone down much. People who got
Speaker 1: in at the very beginning in two thousand and seven
Speaker 1: or eight, they saw a big downtem because the global
Speaker 1: financial crisis happened around then. But first of all, quite
Speaker 1: a lot of people went in yet, and secondly, it
Speaker 1: was on a pretty small balance. People went all lad interested.
Speaker 1: At that stage. They might have a couple of thousand
Speaker 1: dollars in key saber and it went down five hundred
Speaker 1: dollars and they, oh, you know, it's only five hundred bucks.
Speaker 1: But by the time we got to twenty twenty, for
Speaker 1: a lot of people they saw the value dropping by
Speaker 1: thousands of dollars and panicking. And of course, as we
Speaker 1: all know now, the market's recovered remarkably quickly that time.
Speaker 1: They don't always so fast. But I mean, I was
Speaker 1: in my HAIRLD column. I was continually saying to people, no,
Speaker 1: just stay poor, just stay put, and even even if
Speaker 1: there is a downturn, and you learn from that that
Speaker 1: you can't cope with volatility as much as you thought
Speaker 1: you could, if you can just hang in there for
Speaker 1: a while, because markets that go down suddenly quite often
Speaker 1: recover quite fast. And then once things have sort of
Speaker 1: turned around again, if you really want at that point
Speaker 1: to move to lower risk because you can't cope with volatility,
Speaker 1: that's fine, but you're not allowed to. Then when the
Speaker 1: markets start going back up again, Oh, I'm going to
Speaker 1: flick back into the high risk again. People that do that,
Speaker 1: really do. There's a lot of data that shows that
Speaker 1: people that shift around like that end up with sometimes
Speaker 1: only about half as much money as Wow, people who
Speaker 1: just we just misstime it.
Speaker 3: We jump in after the markets have risen, and we
Speaker 3: jump out when they're falling after they've fallen.
Speaker 1: It's it's absolutely awful what happens where people they're buying
Speaker 1: at a high price and selling at a low price. And
Speaker 1: if you you know, think about cars, If you buy
Speaker 1: a car at a high price and then sell it
Speaker 1: when the prices are low for that model, that's not good.
Speaker 1: It's just the same and key we saving.
Speaker 3: Do you think that the term high risk needs some
Speaker 3: workshopping by the marketing department to be something that doesn't
Speaker 3: sound so scary.
Speaker 1: Yeah, yeah, that's you know a lot of people say, well,
Speaker 1: it's really volatility, it's not risk, and that's absolutely true
Speaker 1: in a key we sab fund because they're all quite
Speaker 1: widely diversified. They own a lot of different shares or
Speaker 1: bonds or whatever, and so they're not the value is
Speaker 1: not going to fall to zero just and when it
Speaker 1: goes down it's almost certainly going to go back up
Speaker 1: again in time. It might it might take a few years,
Speaker 1: or it might take just a few months, but it
Speaker 1: will come back up. So it's not really risky. It's volatile.
Speaker 1: The trouble is high volatility is the kind of it
Speaker 1: doesn't flow off the tongue is easy. Yeah, and I
Speaker 1: think quite a lot of people might not even fully understand. Well,
Speaker 1: you know, it's a little bit of a hard word.
Speaker 1: Maybe do you think, yeah, we preaps need to find
Speaker 1: some other one. I'm not sure what you Yeah.
Speaker 3: No, I wonder whether it is one of the other
Speaker 3: mistakes that some of us are making, is we're looking
Speaker 3: at our balance too often. I know people who have
Speaker 3: it on their mobile banking app and so on any
Speaker 3: given day they can tell you whether it's up, down,
Speaker 3: or otherwise. But if we're looking at a twenty or
Speaker 3: thirty year investment on the daily, we're more likely to
Speaker 3: be worried.
Speaker 1: Yeah, absolutely, And I mean I think that's one one
Speaker 1: reason why I'm not a huge fan of the bank
Speaker 1: kV saver schemes. I mean, they're not bad, but they're
Speaker 1: not not amongst the bettest schemes for the most part.
Speaker 1: But that problem too, of people seeing their balance. It
Speaker 1: was fine while the markets kept growing, and you know,
Speaker 1: in the ten or so years from about twenty ten
Speaker 1: to twenty twenty before that COVID crash, there weren't many
Speaker 1: downturns at all, and I think people thought that's just
Speaker 1: the way it was always going to work, and so
Speaker 1: they look at their bank balance and it was often
Speaker 1: it was a bit higher, and it made them feel good.
Speaker 1: But then when it went down, that was especially if
Speaker 1: it's on your bank app or something and you're seeing
Speaker 1: it every time you buy something or whatever, not a
Speaker 1: good idea. I think you can ask the banks, do
Speaker 1: you know. I think you can ask them not to
Speaker 1: have your balance come up like that. I think they'd
Speaker 1: be a good idea for people to if they want
Speaker 1: to stick with their bank too.
Speaker 3: If that helps them manage their personal feelings about risk
Speaker 3: or volatility, then perhaps that's a really good idea. If
Speaker 3: you feel like you don't have the stomach for volatility,
Speaker 3: is there a way of just at least dipping your
Speaker 3: toe in and partially exposing your fund to more risk.
Speaker 1: Absolutely, And that's one of the reasons why I think,
Speaker 1: well nearly all the key we saber providers let you
Speaker 1: be in more than one of their funds. And there
Speaker 1: are sort of two situations where people might want to
Speaker 1: do that. One is, as you're approaching the time of
Speaker 1: spending the money, maybe on a home or maybe in retirement,
Speaker 1: then quite often you want to put some of the money,
Speaker 1: the money you're planning to spend soon in low risk
Speaker 1: and then the longer term money in a higher risk.
Speaker 1: But the other time is when you're thinking, i'd quite
Speaker 1: like to be brave and go into something that's a
Speaker 1: little bit more high risk, high volatile, that you can
Speaker 1: if you're I'm not sure I can cope because I
Speaker 1: reckon you should actually picture your balance to be radical harving.
Speaker 1: I mean, there have been market crashes where where the
Speaker 1: value of something like a Key Sab fund would have halved,
Speaker 1: and that's very rare, but I think in the eighty
Speaker 1: seven crash it probably happened. I mean it's possible. And
Speaker 1: so if you had a Key Saber balance of one
Speaker 1: hundred thousand and you're moving into a higher risk fund,
Speaker 1: picture it going to fifty and you know, it's great
Speaker 1: if you can cope with that, because to hang about
Speaker 1: it and it'll come back up again. But if you
Speaker 1: really can't, you know that just sounds too grim. Then
Speaker 1: perhaps put a quarter of your money into high risk
Speaker 1: and then see how that goes for a couple of
Speaker 1: years and get more transferred over. Now, last I took
Speaker 1: to Simplicity. They were the one major provider that wasn't
Speaker 1: letting you be in more than one fund. But Sam
Speaker 1: Stubbs will say, no, no, no, we're going to change that.
Speaker 1: I'm not sure whether they have yet, but those of
Speaker 1: you who are in simplicity and want to be in
Speaker 1: more than one fund, hassle them because.
Speaker 3: It so once you've figured out, you know you need
Speaker 3: to be in growth, aggressive, balanced, whatever it is.
Speaker 1: I guess.
Speaker 3: The next step is to figure out, well, whose growth
Speaker 3: aggressive balanced fund should you be in? How will we
Speaker 3: best to determine because there's many providers and it can
Speaker 3: be a bit overwhelming.
Speaker 1: Some it can. I think the major basis on which
Speaker 1: I would suggest you choose a provider is fees, which
Speaker 1: is controversial because people say, well, if you pay more
Speaker 1: for something, you tend to get something better. Not always,
Speaker 1: but you tend to when you're buying clothes or or
Speaker 1: houses or whatever, pay more and get something better. But really,
Speaker 1: in managed funds and including key we that doesn't necessarily
Speaker 1: happen that there's a lot of research to show that
Speaker 1: the low fee ones can perform as well, if not better,
Speaker 1: after fees than the high fee ones, and so I
Speaker 1: reckon it's good to just go with low fees. And
Speaker 1: the easy way to work out which funds charged low
Speaker 1: fees is to just go on the sorted website on
Speaker 1: the smart and Vesta tool and it's pretty neat tool
Speaker 1: for those who haven't explored it. You just click on
Speaker 1: kipsaber and then you can choose what risk level you
Speaker 1: want to look at, or you can look at all
Speaker 1: KP saber funds. But It's easier really if you say, look,
Speaker 1: I'm in a balanced fund. Click on balance funds and
Speaker 1: rank them by fees. You can rank them by returns.
Speaker 1: You can rank them by quite a few different different things,
Speaker 1: but rank them by fees lowest first. You can get
Speaker 1: fees the highest first, fees lowest first, and then have
Speaker 1: a look at say half a dozen of the one
Speaker 1: that charge the lowest fees, and read about them that
Speaker 1: website has got. If you click on the name of
Speaker 1: the particular fund, you get a good summary of information.
Speaker 1: It's not you know, screeds and screeds of it. It's
Speaker 1: what major investments they're in and how their returns are
Speaker 1: compared with other returns are warning on that people look
Speaker 1: and see that it hasn't had such good returns. Now,
Speaker 1: if it's had really bad returns relative to other funds
Speaker 1: in that risk level, I would perhaps give it a miss,
Speaker 1: but don't necessarily dismiss it because it's had only mediocre returns,
Speaker 1: because there's once again heaps of research to show the
Speaker 1: ones that did well in one period won't necessarily do
Speaker 1: well in the next period. So I think it's better
Speaker 1: to go with low fees and then one that's had
Speaker 1: reasonable sort of returns. The other thing you can look
Speaker 1: at is the services that the that the different keyv
Speaker 1: Saber providers offer, and the Retirement Commission does surveys annual
Speaker 1: surveys on and asks all the providers do you offer this,
Speaker 1: do you offer that? And they come up with a
Speaker 1: score for each provider on on how good their services are,
Speaker 1: and you can find that on the keypsaber fund finder
Speaker 1: tool on Sorted you can find it which one's got
Speaker 1: good services.
Speaker 3: Yeah, and I would agree that that tool is phenomenal.
Speaker 3: And we should point out to people that Sorted is
Speaker 3: created by the Retirement Commission, so it's government funded. They're
Speaker 3: not trying to sell you anything. It's just good independent information.
Speaker 3: So head there. We'll put the link in the show notes.
Speaker 3: I want to talk to you some more about the
Speaker 3: mistakes we're making and the importance of fees, but we
Speaker 3: do have to take a quick break back after this
Speaker 3: Welcome back to the Prospers charity project. We're talking to
Speaker 3: money expert Mary Holme about ensuring you're getting the best
Speaker 3: out of your kiwisaver, and we started talking about fees, Mary,
Speaker 3: and I know that on the Sorted website that you
Speaker 3: can rank them from lowest to highest. But is it
Speaker 3: most important to look at the fees or is it
Speaker 3: most important to look at the return after fees?
Speaker 1: Yeah, I think look at the fees. Yeah, you know,
Speaker 1: that does seem counterintuitive because you want to look at
Speaker 1: which everyone's doing well. The trouble is it's all past information,
Speaker 1: And as I was saying a minute ago, there's lots
Speaker 1: of research to show that funds that have done well
Speaker 1: in the past in fact are sort of less than
Speaker 1: average likely to do well in the future. There's a
Speaker 1: real tendency. You know, the active fund managers which charge
Speaker 1: the higher fees, tend to have a certain way of
Speaker 1: selecting investments which quite often does well in one environment
Speaker 1: and not well in an environment. So really, honestly, and
Speaker 1: people find it quite hard to believe it's a very
Speaker 1: good idea to ignore returns unless they're particularly bad.
Speaker 3: Yeah, I think people would struggle to get their heads
Speaker 3: around the idea of ignoring returns when they're all ranked
Speaker 3: on this fund or that fund has achieved the best return,
Speaker 3: and we've got the morning Star report that'll tell you
Speaker 3: who's done what over the past five years, ten years,
Speaker 3: So what is the research that tells us that it
Speaker 3: really doesn't matter if they've done well in the past,
Speaker 3: it doesn't mean they're going to do well in the future.
Speaker 1: By the way, on morning start have a look and
Speaker 1: it says that you know, it says there don't take
Speaker 1: much notice of the returns. It does say on their reports.
Speaker 1: But the research is mostly American, I have to admit,
Speaker 1: done by S and P, which runs the S and
Speaker 1: P five hundred and huge big American research firm, but
Speaker 1: there has been some done in New Zealand that shows
Speaker 1: the same. So things happening here where they look at,
Speaker 1: for example, the funds that have done best let's say
Speaker 1: a five year period, how did they do in the
Speaker 1: following five year period or over ten years, and how
Speaker 1: do they do in the following ten or whatever the
Speaker 1: period is. And very often the ones that did well
Speaker 1: in one period then they tend to be less likely
Speaker 1: than by chance, to do badly next time around. And
Speaker 1: the ones that did badly are quite likely to do
Speaker 1: well the next time around. It's really it is hard
Speaker 1: to get head around it. If you're doing you know,
Speaker 1: if you study finance, which I've done, I could explain it.
Speaker 1: But it's not a quick crab. Really yeah, fair enough?
Speaker 3: And when I know that there's plenty of debate over
Speaker 3: active funds versus passive funds, and I guess the lower
Speaker 3: fee ones tend to be the more passive funds.
Speaker 1: Is that to say that there's.
Speaker 3: Just really no benefit to some highly powered financial analyst
Speaker 3: who's paid lots and so therefore charges you lots going
Speaker 3: through and picking the investments.
Speaker 1: Yeah, I think there is no benefit. I mean that's
Speaker 1: perhaps a bit sweeping. And people always bring up Warren
Speaker 1: Buffett to me, you know, when I'm saying you can't
Speaker 1: really pick shares. He and Charlie Munger have been exceptional.
Speaker 1: They are the exception that proves the rule. In fact,
Speaker 1: he himself Warren Buffett has said you should go into
Speaker 1: index sons. But generally speaking, when you look at the research,
Speaker 1: I've been following this for more decodes than are clear
Speaker 1: to men. But when you look at people who are
Speaker 1: praised for being very good at selecting shares, and then
Speaker 1: suddenly next time around they don't do very well, it's
Speaker 1: just a common thing.
Speaker 3: I actually underlined in your book a quote from Warren
Speaker 3: Buffett in his twenty seventeen Annual Report, where he says
Speaker 3: performance comes, performance goes, fees never fault, yes, which I
Speaker 3: thought was quite poignant because maybe what people don't understand
Speaker 3: is you're not just charged fees if your fund grows, right.
Speaker 1: No, that's right. Then people can get upset by that.
Speaker 1: Sometimes if their balance goes down quite a lot in
Speaker 1: the fees just keep on coming along. But if you're
Speaker 1: realistic about it, you can't really expect the people who
Speaker 1: are running KYP Saber funds to just get no or
Speaker 1: low income when the markets are down. That's not going
Speaker 1: to work for people. They're still doing the work, they're
Speaker 1: still running the funds, and many times it's not their
Speaker 1: fault that the markets have gone down, you know, it's
Speaker 1: market condition. Yeah, COVID or something like that comes along,
Speaker 1: and you can't blame them for that. There's nowhere to.
Speaker 3: Run and hide in a situation like that. What about
Speaker 3: performance fees? Not all funds charge them, but some do
Speaker 3: where if you achieve a certain amount above the benchmark.
Speaker 1: That they'll charge you extra. Is that a waste of money?
Speaker 1: It's yes, there's not that many do charge those anymore,
Speaker 1: I think, and they're not really They can give the
Speaker 1: wrong incentives for the managers to go for short term
Speaker 1: performance as against longer term because they can take the
Speaker 1: money and run to South America. Yeah, you're stuck in
Speaker 1: Kip Saber over the decades. I mean, I know the
Speaker 1: FMAS looked into performance fees and I don't think they're
Speaker 1: particularly impressed by by the way it works. It's not
Speaker 1: I wouldn't wouldn't applaud a fund that charges performance fees.
Speaker 3: At the last FMA report and it said that the
Speaker 3: I think this is for the twenty twenty four year
Speaker 3: that we paid seven hundred and eighty nine point six
Speaker 3: million in fees. Gosh, do you think that we're just
Speaker 3: paying too much? Should there be a cap on what
Speaker 3: you canch?
Speaker 1: Sure? I prefer in these sort of situations to let
Speaker 1: the market do it, and we should vote that with
Speaker 1: our feet, then yes, and move to the low fee ones,
Speaker 1: which is not only helping the market work better, but
Speaker 1: also helping you. And it's absolutely true that fees have
Speaker 1: gone down, and you know, the f he may has
Speaker 1: been monitoring that, and especially at the low end. It
Speaker 1: used to be that a zero point five percent fee
Speaker 1: was low and now there are quite a few providers
Speaker 1: offering you know, a fair bit and sometimes quite a
Speaker 1: lot less than that. Yeah, So I think we just
Speaker 1: let the market work that one out. Yeah.
Speaker 3: I think you've been quite definitive though. We're looking for
Speaker 3: the lowest fee and not performance, and so I think
Speaker 3: if everyone thinks that way, I think we'll all drift
Speaker 3: in a certain direction and surely the other fund managers
Speaker 3: will catch ale.
Speaker 1: Yeah, and there has been was it being one of
Speaker 1: the big providers not long ago lower their fees, tended
Speaker 1: to lower them across all all their funds. Yeah, it's.
Speaker 3: Yes, we've talked about the fees. We've talked about not
Speaker 3: necessarily getting hung up on the returns. Is there anything
Speaker 3: else you should consider when you're picking a provider, Well.
Speaker 1: There's you know, the whole issue of ethical investing, which
Speaker 1: has become more and more popular and a lot more
Speaker 1: new Zealanders are taking an interest when Mindful Money, which
Speaker 1: is the website I recommend on it. They got some
Speaker 1: great information on which kei we saber providers and which
Speaker 1: funds invest nicely as far as the environment goes or
Speaker 1: social issues or that in fact that you can look at,
Speaker 1: whether they're animal testing, all sorts of factors you can
Speaker 1: look at, and so have a look at the Mind
Speaker 1: for Money website, but they when they do surveys, they
Speaker 1: find that, you know, the majority of New Zealanders really
Speaker 1: care about the ethics of their investments, but a lot
Speaker 1: fewer people are actually translating that into choosing a key
Speaker 1: we Saver fund that is an ethically strong fund. But
Speaker 1: I think that's probably gradually changing, and it's certainly something
Speaker 1: so on the Mind for Money website, have a look
Speaker 1: at a fund you're thinking of moving into, and you
Speaker 1: can specify which issues matter to you and then see
Speaker 1: how that fund scores, and that that might make you
Speaker 1: change your mind.
Speaker 3: I'm keen to know whether there are other changes more
Speaker 3: broadly that you would like to see to how key
Speaker 3: we Saver it works, because obviously there's only so much
Speaker 3: that we as investors can do within the scheme to
Speaker 3: maximize its value for us. For example, some people are
Speaker 3: on contracts that are total remuneration contracts, so your key
Speaker 3: we Save a contribution and the employer contribution comes out
Speaker 3: of your salary, and that's always struck me as not
Speaker 3: really being within the spirit of the legislation. Cricket, It's
Speaker 3: not cricket.
Speaker 1: No, I really don't like people doing it tends to
Speaker 1: be big and play lawyers who do it, and they
Speaker 1: they say it's because they want to treat the people
Speaker 1: that are in key We Saver equally with the employees
Speaker 1: who are not in ki We Savior. And I say,
Speaker 1: that's that's pretty weak. We want there to be an
Speaker 1: incentive for people to be in Kee We Save, but
Speaker 1: we want the employees to want to be in it.
Speaker 1: And I know that, you know, the Retirement Commission has
Speaker 1: for a long time said we should get rid of
Speaker 1: total remuneration it's called and I'd really like to see
Speaker 1: that gone.
Speaker 3: And this is maybe a tricky one for those who
Speaker 3: find it difficult to find the three percent, But should
Speaker 3: we have higher minimum contributions.
Speaker 1: I'm not particularly a fan of that. The people who
Speaker 1: are are often in the industry, and you sort of
Speaker 1: think they've got a bit of an incentive.
Speaker 3: Because because they can charge a fee based on how
Speaker 3: much has invested more.
Speaker 1: Yeah, And they say, no, no, no, Mary, that's not
Speaker 1: what I mean at all. I just think people aren't
Speaker 1: retiring with enough money. But actually, funnily enough, I mean
Speaker 1: in my Weekend Herald column, every now and then there's
Speaker 1: a letter from someone who lives on New Zealand super
Speaker 1: alone and is quite happy on it. I'm not saying
Speaker 1: everybody is, and I'm not saying that's good. But I
Speaker 1: don't think we don't need to retire with half a
Speaker 1: million dollars in key we saber. Most people don't. It's
Speaker 1: you know, if you can, well that's nice, but it's
Speaker 1: not essential. I would rather see contributions made, but by
Speaker 1: the government to unemployed people. That's the change I would
Speaker 1: really like to see. Get them into the system. Don't
Speaker 1: take it out of their benefit because they are on
Speaker 1: pretty low money already. Just puts three percent of their
Speaker 1: benefit in addition into a Kiwi Saber fund for them,
Speaker 1: because then they are part of the system, and when
Speaker 1: they get off off the benefit, they're already enrolled and
Speaker 1: things are rolling. They've got a stake in their future.
Speaker 1: And I just think cycle logically, it could make a
Speaker 1: big difference. And it doesn't cost that much. I know
Speaker 1: the Retirement Commissioned did the number crunching on it a
Speaker 1: while back, and it wasn't very expensive because the benefits
Speaker 1: so low that three percent of the benefit is not
Speaker 1: that much money. It's a really interesting concept. There's a
Speaker 1: million more things I would love to ask you, and
Speaker 1: perhaps we have to get you on another time, but
Speaker 1: we really appreciate your time, Mary Halks, Nadine, I've enjoyed it.
Speaker 1: Thank you.
Speaker 3: Thanks for listening to The Prosperity Project. You can follow
Speaker 3: this podcast on iHeartRadio or wherever you get your podcasts,
Speaker 3: and please do chuck us a rating or a review
Speaker 3: while you're there. For more personal finance and business content,
Speaker 3: head to inzid Herald dot co dot zed and please
Speaker 3: do feel free to get in touch with your questions
Speaker 3: and your stories Nadine dot Higgins at zme dot co
Speaker 3: dot zed. A reminder though, that this podcast is informational
Speaker 3: only and nothing we say here should be considered personal
Speaker 3: financial advice. But also remember that while listening to this
Speaker 3: podcast is hopefully going to be additive to your financial
Speaker 3: knowledge and that is fantastic. Knowing stuff doesn't create change.
Speaker 3: Doing stuff does. So what action are you going to
Speaker 3: take today to make your life more prosperous. My producer
Speaker 3: for this episode is Ethansels, sound engineer is Richard Martin.
Speaker 3: I'm Nadine Higgins. Thanks for listening to the Prosperity Project.