[Potato]

I am earning $32k before tax (a fairly frugal existence at the moment). I am earning so little that I don't have UK student loan reductions. :) What I lose to tax is not an awful lot (but more than I would like ;) ).
I have no assets or liabilities. Except for the 4 wheeled rustbucket.

At the moment I am not enrolled on Kiwisaver or any other pension scheme. My simple question is: should I or shouldn't I?

I do try to budget, but with plenty of unforseen expenses cropping up all the time it never quite works out aswell as I would like. I certainly am careful with my money, and am not in dire straits. My real issue is, can I afford to lose 4% per month? This is for me to decide. I believe that yes I could, I would just need to adjust. But I also wonder, what is the point?

On such a low salary, if I chose not to contribute- would I miss the money in 40 years (I'm 23)? I honestly doubt it. Even if I launch it into the highest risk plan (which is what I would do until I am on higher wages) I'm not sure the pay-off is worth the short term sacrifices.

But counter-acting this is the government kick-start of $1000. Which I believe you lose if you opt out. And also the government credits. Again though, how much will I miss this when I'm 65?

Other problems for me are that I don't know that I will retire in NZ (I laugh just thinking of retirement, let alone where I will be). And that I don't know that I will live to 65 anyway (an irrelevant point...).
From what I've read, if you want to leave NZ and take all your kiwisaver cash with you, you have to be gone for a year (?) and you also lose the government contributions. This is a real negative.


After writing this up, I feel like I may have answered my question anyway. I am probably not going to join (or I will opt out if I am forced to join at some point).
My general conclusion is that I'm far too young to stress about this, and earning far too little for it to make a jot of difference anyway. Added into this the fact that I don't know how long I will be in NZ, and the implied awkwardness and penalties for getting my money out of the country....it all seems like a pretty bad idea.

[CJ22]

I agree with your last paragraph. It's not for you in your current circumstances.

[Super_BQ]

IMO, KiwiSaver is for those that don't know how to save $. Those who are more switched on and more informed about finance have better ways of maximising their savings.

Employers contributing 1% is a joke. For any retirement fund to be effective enough, one must really save a considerable amount in order to gain from compound interest. Look overseas and see what form of savings those developed nations use. They're not talking #s like 4%. Canada offers up to 18% and by next year, they're offering a tax free savings account (called TFSA). Individuals can put in a max $5000 a year in an investment account and all the returns and capital gains are 100% tax free - WITHDRAWABLE at ANYTIME. The $5000 is never lost as any unused portion will be carry forward to the next year. So a person could end up with $100,000 in that account after 10 years if the interest or gains are compounded roughly 7% a year. Best part of it is, no paper work or tracking when or where the funds go. You don't even have to disclose the source of the $ put into this account.

Even worse about Kiwi Saver is the lack of a proven track record by the appointed managed funds. It's not that each managed fund can't perform. It's the fact that for most, once they deduct their 'management fee', it really doesn't leave much return for the investors.

BQ