Loosening the KiwiSaver lock
I read the other day that I should be sticking 10 per cent of my salary into KiwiSaver.
No way. At least, no way until the Government redesigns it.
I totally agree that saving just 3 per cent of your salary into KiwiSaver isn’t going to be enough for a glamorous retirement.
But KiwiSaver isn’t the place to put more than the minimum amount needed to get your employer’s contribution, and the taxpayer-funded member tax credit.
The really odd thing about KiwiSaver is it teaches people to invest in diversified portfolios of cash, shares and bonds, and then discourages them from saving more than the absolute minimum into it.
It’s a design fault. It could be fixed.
Let me explain using the example of a person aged 65 who is still working. This elder citizen can save into KiwiSaver, without the money being locked away.