Q: I have over $16,000 in an Australian super fund and would like to move it into my KiwiSaver account when the laws are changed. Do you have any information when this will be going ahead and how one goes about moving the money across the Tasman?
It is proposed that transtasman retirement savings portability be allowable from July 1, 2013.
To qualify for this your Australian super fund will need to be an Australian-standards complying superannuation fund regulated by the Australian Prudential Regulation Authority.
If it is, and your KiwiSaver scheme has elected to accept transfers from Australian complying superannuation funds once that is possible, you will be able to transfer your full retirement savings to your KiwiSaver scheme.
The transferred amount will be subject to Australian complying superannuation fund rules and can only be withdrawn once you have reached age 60 and have retired.
The first step closer to the time will be to find out from your KiwiSaver provider if they intend their scheme to accept transfers from Australian-sourced retirement savings.
Blair Turnbull, ASB executive general manager of wealth and insurance.
Q: I'm a 65-year-old who has been a KiwiSaver for five years but still working fulltime. Could you advise my best option - to continue saving or access monies to pay off a credit card debt of $8000? Also, is my KiwiSaver part of my inheritance to my daughter?
Our answer to your first question should not be taken as personalised financial advice as there are aspects of your personal financial situation that need to be taken into account which aren't known to us.
As you have reached your KiwiSaver retirement age (the day you turn 65 and have been a member for a minimum of five years), you will no longer be entitled to member tax credits from the Govern-ment of $521 per year. However, if you're working, your employer will continue to send your employee contributions to Inland Revenue who will in turn process and pass them to your provider.
Your employer is not legally required to keep making employer contributions once you've reached your KiwiSaver retirement age but they can continue to contribute on a voluntary basis. You're best to check this with your employer.
If your employer is still contributing, you'll effectively be doubling the amount of money you're putting in yourself, assuming you're contributing 2 per cent of your pay (before fees, taxes and performance generated by your KiwiSaver provider). This is going to be higher than any interest rate you may be incurring on your credit card debt.
As you have reached your KiwiSaver retirement age, you can at any stage withdraw a lump sum from your KiwiSaver account to pay off your credit card debt.
If your employer is not contributing, then you're likely to be better off repaying the debt.
To answer the second part of your question, your KiwiSaver money is your personal money so it will be paid out to your estate, on request. In other words, it is dealt with in the same manner as any other assets you own to distribute to the beneficiaries of your estate.
If you have a will, you can nominate any specific persons to be beneficiaries of your KiwiSaver money.
Carmel Fisher, Fisher Funds managing director.
Q: I'm self-employed and have just been making a lump sum contribution of $1042.86 to benefit from the $521.43 tax credit. Even the best investment in the world isn't going to turn this into a meaningful retirement fund, so is there a clever way to work out how much I should contribute to be on a par with a salary earner contributing a portion of their income, taking into account the fact that I do have some quiet months over the course of the year? An obvious downside to being self-employed is I don't get the benefit of an employer chipping in. Are there KiwiSaver benefits specifically available to the self-employed that I'm not aware of? And is it better to dribble in smaller amounts over the year rather than the once a year top up or does this incur higher fees?
The average wage for a private sector employee is $48,000 a year before overtime.
Assuming a 2 per cent employer contribution and a 4 per cent employee contribution total annual savings will be about $3233 including government top up.
So assuming a 20-year time frame and a net return of 3 per cent this will turn into a capital sum of about $48,580 which, if invested with a 3 per cent net return in retirement, will generate $1457 a year.
The assumption used ignores inflation and looks at the situation in today's dollars - inflation would be on top. For example, you would need to increase your annual contribution by the rate of inflation annually.
Definitely not party material though - if you want $27,500 net in today's dollar terms and to spend all the capital over retirement (25 years) then you would need to have saved $480,000 over the next 20 years and will need to increase your savings by about $1192 a month.
There are no benefits specifically for the self-employed.
It is better to regularly drip feed payments in - this is called "dollar cost averaging".
Dollar cost averaging refers to the process of regularly investing a sum of money, which means that more shares are bought when markets are low and less when they are high - this process over the long term reduces the average cost of shares in a portfolio.
This is unlikely to incur higher fees.
Peter Christensen, Camelot Group chairman.
Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.
To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose, firstname.lastname@example.org