Here’s the 4-1-1 on Super and KiwiSaver

Okay, so “the 4-1-1” is definitely a North Americanism, but I’m just going to wear it – it’s the info, the skinny, the scoop… the facts. As in “so what’s the four-one-one?”

The fact is, the skinny on NZ Super is that this year it’s $411.

It can be helpful to keep that $411 in mind. That’s this year’s weekly figure that individuals will receive as the government pension when they reach 65. For couples it’s $633. Here’s where to find all the new rates.

It’s not hard to notice that $411 would not be enough for many of us to live on. I don’t mean it’s not generous, as it keeps many retirees (close to 60%, actually) out of serious financial hardship. Which is a great thing.

But for most of us going forward, it also means there will be a gap between what NZ Super provides and our lifestyle goals. So the key is to run your retirement numbers and make sure you’re on track to fill your gap with solutions like KiwiSaver.

New KiwiSaver rates roll in

Speaking of, if you’re an employee you now have some new options when it comes to contributing to KiwiSaver. Once you had to choose between 3%, 4% or 8%, but you can now also choose 6% (if that jump to 8% was a bit far), or even 10% (if you’d like to do some catching up with your saving and investing).

How much of a difference would that make? Well, if you’re just starting out at 21 and earning $45k, here’s what ramping up your contributions could mean:

• From 4% to 6% = $88,000 more (from $277,000 to $365,000)
• From 8% to 10% = $78,000 more (from $435,000 to $513,000)
• From 3% to 10% = $275,000 more (from $238,000 to $513,000)

Now that’s some serious dosh!

Contribution "holidays"? No such thing.

Here’s more of the 4-1-1 on KiwiSaver – “contribution holidays” are out, “savings suspensions” are in. If you’re going to take a break from contributing to KiwiSaver, you’re effectively suspending your savings, and can do so for a year at a time. That’s down from five years.

You probably want to get back in gear as quickly as you can, since not contributing means you miss out on the benefits: your employer’s contribution, the government’s annual top-up of $521, and any returns from all that money being invested. That’s not something you want to miss out on for long – it’s far too much money to leave on the table.

So that’s the 4-1-1 for the year: NZ Super is $411, and KiwiSaver will keep helping us bridge the retirement income gap we may have in the future.