Q: I'm 82, my wife 83. I'm a multi-millionaire, and have been for many years. I worked hard and saved even harder. We want for nothing, been there, done it all.
I think nothing of buying cars, motorhomes, overseas trips, holiday homes. But small things, I'm a nutter. Drink beer I don't particularly like because it's cheap, specials at supermarkets all the time.
This conversation at home: Wife: "Can we go out for tea somewhere nice?"
Me: "Give me strength! Probably spring for RSA, but have a couple of wines before we go, I'm only buying one at their prices."
After main meal, Wife: "I would like a dessert." Me: "You want a dessert, open your purse and give me the $10."
Walking back to car, wife links my arm and says, "Thank you for a lovely evening, darling".
Mary, why the heck am I like this? Is it because my mother always said, "save your pennies and your pounds will look after themselves"? Or is it because I've never forgotten the first five years of marriage, when we were horribly broke?
A: Many of us grew up with mums uttering that saying. And many of us were short of cash early in our marriages. But most of us didn't turn into penny pinchers. So it's hard to know what's to blame. Some observations, though:
• Maybe this is how you got rich in the first place!
• I hope your attitude doesn't extend to charity. If it does, you could put that right in your will.
• In the meantime, you don't sound unhappy. So does it matter?
• I suspect, though, that your wife's "lovely evening" comment might be an attempt to encourage more outings. She deserves them, if she's been putting up with you for all these years! So how about every Saturday?
• One more assignment: Go and buy some beer that you know you will love. And some classy wine – or whatever your wife likes – for her. And please report back that you did it, and drank it, and might even do it again!
Sticking with KiwiSaver
Q: I stopped work this year at 63 years old. Been in KiwiSaver for 11 years and was in the Government Super Fund (God bless that system) for 27 years before that. I now draw the monthly annuity from that.
Even though I've stopped work, I'm still paying into KiwiSaver with small sums. If I am silly enough to buy a Lotto ticket, I also put double the ticket cost into KiwiSaver.
Do I still need to put more than $1200 into my KiwiSaver to get the government annual contribution?
A: Yes, but you've got the details wrong.
You don't need to contribute any particular amount to get input from the government. It puts in 50 cents for every dollar you put in during the July 1 to June 30 KiwiSaver year, up to a maximum. If you contribute $2, the government will contribute $1.
The maximum government contribution is $521. To get that, you need to contribute $1042 or more within the year.
An easy way to do that is to set up an automatic transfer into your KiwiSaver account of $20 a week or $87 a month.
The government contribution starts when someone turns 18, and stops when they turn 65. In the year you turn 65, their maximum contribution is proportionate to how much of the July-June KiwiSaver year you are under 65. For example, if you turn 65 on January 1, their maximum contribution will be half of $521. It's similar for people turning 18.
By the way, I like your Lotto idea.
And yes, you're very lucky to be in that generous government super scheme – which no longer takes new members.
Help for homebuyers
Q: A way in which you can help your kids, with no tax implications that I am aware of, is to use the money that you would have used as a deposit to buy a house for them, to instead make them an interest-free loan, with no repayments claimable until the property is subsequently sold and/or their mortgage is discharged.
Most banks (certainly Westpac and BNZ, from my experience) will accept that loan as equity for the purposes of lending the kids the rest of the purchase price.
While the loan is still your asset, you will not have any charge over the property if they ultimately don't repay you, nor will you be entitled to any share of the equity accrued in the house.
Even if you ultimately intend to gift the money to your son or daughter, the advantage of making it an interest-free non-repayable loan (until the property is sold and/or mortgage discharged) is that if they are in a relationship which ends and the property is sold, you can salvage the equity that you put in for them by recalling the loan.
If you had gifted them the money, then in the absence of a prenuptial-type agreement, their partner could be entitled to half of that money.
A: Good thinking! And your idea has Inland Revenue's blessing.
"Based on the information provided, there appears to be no tax implications as this is a private arrangement between two parties with no interest income to return (by the parents) or interest expense to claim (by the kids)," says a spokeswoman.
She adds, "This is on the assumption the money loaned is from the parent's private funds and not withdrawn from the capital of a taxable business or activity – such as a rental property." More next week on other ideas about parents helping children into their first home.
Q: Your correspondent last week quite rightly points out the great service being offered by CAP (Christians against Poverty) and you support her message.
However, the piece ends with "if our PM is serious about taking care of poverty, this is the type of programme she needs to support and not just give the beneficiaries more money! (Sorry, private rant there!)." This "private rant" was printed without any query.
I also "work" (unpaid) for an organisation that assists those who are suffering from the impact of exploitative interest rates on loans. I am always in awe of how they manage to get by with so little money. No amount of financial advice, management etc is of value when you simply do not have enough money to live on.
Your correspondent shows a lack of insight into the lived reality of those on low incomes.
It only takes the smallest incident (car needing new tyres, for example) for their budget to be thrown into the red. With the punitive attitude of MSD, they often have no option but to revert to fringe lenders.
Most of our clients are beneficiaries, and some are working in low-paid jobs. In every case, they need more money.
A: I agree. I've also heard too many tough tales about people trying to get by on too little money.
But I think you and I read last week's comment differently. You seem to think the reader was putting down the idea of paying beneficiaries more. I thought she was pushing for both higher benefits and support for programmes like CAP.
Good on you for the work you do.
Women at work
Q: It was disappointing indeed to see your dismissal last week of the acknowledgement of the unpaid work of women as something that just complicates things.
The role women play in procreation, nurturing and caregiving is not the same as being a volunteer.
Recent work by the Retirement Policy and Research Centre draws on New Zealand, Australia and Ireland's experience to show the implications of gender for retirement income. There are profound structural imbalances, made worse in the pandemic, that operate to disguise how the undervaluing and invisibility of the work of caregiving disadvantages women.
We hear a lot about the gender wage gap, but the true gender gap that affects retirement preparation is primarily the combination of lower pay rates, for fewer hours, for fewer years of the working age lifespan.
When we take a gender lens to our policies, while NZ Superannuation is a stand-out world leader of gender equality, KiwiSaver is designed for a male model of paid work.
Women's paid working lives are typically very different from those of men: often part-time, low paid and with career breaks for child rearing and other caregiving duties such as for older husbands or aging parents. Pension contributions from the women themselves, their employers and state-funded tax concessions are correspondingly limited.
The result is a very significant gender difference in preparedness for retirement that will play out in more female poverty and homelessness. That is the price of ignoring the issue.
Making this issue more visible is surely the role of enlightened journalism.
A: Happy to oblige, by publishing your letter. You make many excellent points, as does another correspondent who wrote along similar lines, including, "Failure to acknowledge the essential role of unpaid work has ensured the oppression of women for centuries. I could send you link after link that demonstrates the way society is held together by such work."
But I'm afraid you both read more into my response last week than I intended. I was not dismissing the idea of acknowledging the unpaid work of women. I applaud such work – and such acknowledgement.
I just didn't want to commit to adding "paid" or "unpaid" every time I wrote the word "work". That's all. I doubt if any writer would want to be limited like that. Sorry if I upset you.
PS: See the last sentence of my previous reply. I saw no reason to label that "unpaid work".
Stirring the pot
Q: As a long-time lurking reader (should that be reading lurker?) I write this first time to take issue with the lady who said – as if it was a matter of fact like gravity or the toast landing butter side down – that most unpaid work is done by women.
No, that simply isn't so. That may be the case in her circles, or in Ms Waring's circles. That ain't the case out here in the real world.
I will point out two fundamental flaws: firstly – and Vive la difference – men have an entirely different approach to talking about the work and unpaid work they do. Which is: we. don't. talk. about. it.
We certainly don't meet as groups of men and tell every man who wants to listen (no one will) that we do all this unpaid work that our women don't see or appreciate. No.
Second, in terms of return on investment for all work both paid and unpaid, men lose out to women, because we die seven years younger than you on average, and so our work and saving pays the vast majority of your pensions and support in your older years, not the other way around.
Honestly, we don't mind, we keep working, we're quite happy with that.
Those (relatively few) women out there who don't like them facts to be said out loud, hey you know what, we don't mind being banished to the couch overnight while you settle down, it's kind of like camping.
A: Oh no. Your letter is bound to bring more angry responses. You're not so much a reading lurker as a reading stirrer!
A lot of what you say could easily be challenged, but let's not go there. We're veering off the track of what this column is supposed to be about. And I have such a backlog of good letters about financial issues.
I'll just say this: it's quite possible that unpaid work done by men is also under-appreciated – just as for women.
And your argument that men lose out by dying younger is novel.
The fact is, though, that more elderly women are in poverty than elderly men – as explained in the last Q&A.
PS: Using the word "lady" in this context is inflammatory. But you already knew that.
- Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions do not reflect the position of any organisation in which she holds office. Mary's advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it. Send questions to firstname.lastname@example.org. Letters should not exceed 200 words. We won't publish your name. Please provide a (preferably daytime) phone number. Unfortunately, Mary cannot answer all questions, correspond directly with readers, or give financial advice.