My wife and I are about to enter a KiwiSaver fund at age 61 and 63. Our circumstances are that we have a sizeable mortgage still ahead of us, but with an estimated $250,000 equity in our house if sold for the current CV.

My wife has a workplace superannuation scheme of just over $100,000 on retirement.

Given our circumstances, my gut feeling is that we need to be in at least a growth, or possibly even an aggressive KiwiSaver fund, rather than a moderate or conservative.

That is, we need to take the risk to try and achieve the maximum return possible to compensate for our late entry into KiwiSaver and the fact that we still have a sizeable mortgage at our age.

Given the above, I would be interested to see what your experts make of my rationale.

I suspect this may be an issue for many of your older readers who are not in, or are considering, joining KiwiSaver at 60-plus age.

You and your wife are at one of the most critical watershed junctures in the life-cycle of working people saving for retirement.

As such the only meaningful answer to your question can be provided by a qualified and authorised financial adviser who would require considerably more information than is possible to fit in a Q & A column such as this.


Although New Zealanders have had plenty of quite rational reasons to eschew consulting financial advisers in the recent past, we're all now in a brave new world where paying for some financial advice is becoming a necessity.

Having said that, and taking your lead, we can provide some markers that would provide a general guide as to which issues are most relevant for situations similar to yours.

The first thing you need to do is both get enrolled in KiwiSaver.

You have two kickstarts worth $1000 each from the government to collect, five years of potential member tax credits (MTCs) and also contributions from your respective employers which may continue beyond your end payment date (that's at least $7200 between you, not including employer contributions).

Also, you may find that after this five-year period your KiwiSaver scheme may provide you with a cost-effective vehicle with which to continue saving and investing.

As to which fund you should be in, that's more difficult to determine but it is more likely you both will be leaning towards the lower end of the risk spectrum depending on the mix of your other assets (ie, somewhere in between a balanced and a conservative fund).

For example, if you've already got a larger proportion of your retirement nest egg in growth assets such as the equity in your property then an asset allocation closer to a conservative fund would be the most likely candidate.

However, that determination is best made by a qualified financial adviser.


* Johnny Lane, Brook Asset Management

Q: We (my husband and I) have an employee who is enrolled in KiwiSaver.

As well as his PAYE salary he also gets a commission for any sales that he makes as a salesman.

These commissions have withholding tax deducted.

Are we correct in thinking that the PAYE salary is subject to KiwiSaver deductions, but not the commission?

I have checked up on the KiwiSaver website, and it appears that we are correct.

Employer KiwiSaver contributions are based on an employee's gross salary or wages.

For contributions to KiwiSaver schemes, gross salary or wages generally means total salary, wages or allowances, including bonuses, commission, extra salary, gratuity, overtime and other remuneration of any kind before tax.

That means the commission paid to an employee should be subject to employer KiwiSaver deductions.

We suggest that you check with your taxation adviser to make sure this is the case in light of your particular situation.

* Donna Nicolof, BNZ head of wealth and private bank

* PwC Tax Partner Geof Nightingale adds:

If the sales commission is paid by the same employer as the salary, then it is likely to be seen as employment-related income and the commission should be subject to PAYE (rather than withholding tax) and Kiwisaver contributions as well.

The only exception is if the employee is a member of a complying superannuation fund (a fund that has similar rules to KiwiSaver funds) and that fund's trust deed excludes commissions from being gross salary and wages for the purposes of that fund. See

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, helentwose@gmail com.