YOVICH & CO. KIWISAVER MARKET UPDATE - APRIL 2021
May 26, 2021 | KiwiSaver
Just over a year on from COVID-19 and life is starting to feel like the new normal. KiwiSaver members that stayed their long term KiwiSaver goal have been rewarded, as markets have surpassed pre-covid values. The Financial Markets Authority (FMA) has warned fund providers not to over sell their funds short-term results and to focus on long-term returns (greater than 3 years). The KiwiSaver returns pulled back in March following a strong December quarter. KiwiSaver assets continue to grow and edge towards NZ$79 billion. Conservative funds’ performance ranged from -2.2% to 0.6%, (average -0.6%), while at the other end of the risk scale, the Aggressive funds’ performance ranged from -1.5% to 4.9%, (average 3%). Morningstar 28 April 2021.
Do you want an extra $521 this year?
Remember the KiwiSaver financial year is 1 July to 30 June, meaning there is only one month left for KiwiSaver members aged between 18 and 64 to receive the government contribution. The government contribution provides members with a 50% return (a maximum of $521.43 per year). For every $1 a member puts in up to $1,043, the government will deposit 50 cents.
How much is the Government Contribution worth?
The government contribution throughout a member’s eligible period is worth a whopping $23,985.78, (46 years by $521.43), excluding any market gains earned on the government contribution throughout the period. The extra $23,985 could provide members an extra $1,104 per year in retirement.
Are you approaching the eligible age to withdraw your KiwiSaver?
As members approach 65 years of age, it is important that their current fund is the most suitable for their future needs. Some members will require a full withdrawal, others partial and some will not require it at all. If you want advice regarding; the correct fund for your situation, know what your approximate KiwiSaver balance will be at 65 and the possible regular payment you could receive once 65, contact your specialised KiwiSaver adviser at Yovich & Co.
Do you have friends and family that are not receiving KiwiSaver Advice?
From June 2021 all default KiwiSaver accounts will be moving from a conservative fund to a balanced fund. This change will place investors in a fund that in the long term will have higher returns, due to increased exposure to the share market. This increased exposure provides greater volatility and may not be suitable for every member. A survey carried out by Financial Service Council (FSC) showed that only 18.1% of Kiwis receive financial advice. The perceived lack of wealth is the main driver for Kiwis not receiving financial advice. Those who are advised are delivered a 4% increase in investment returns, about 52% more in their KiwiSaver and save 3.7% more for their retirement than those who are unadvised. Importantly, advice is also clearly linked to overall wellbeing; with 46.6% of those who receive advice rate their wellbeing as high or very high, and their relationships, physical and mental health all significantly improving. If you know anyone not receiving advice, and you care for their wellbeing please send them along to see us.
Plan of buying your first home?
KiwiSaver is a great tool to help you purchase your first home. Withdrawals for First home purchases were up 25% at $1.19b.
SuperLife KiwiSaver Scheme - Diversified Funds*
UPDATED AS AT 31 March 2021. PERFORMANCE IS AFTER DEDUCTIONS FOR FEES AND AFTER TAX.
How we can help
If you need any advice regarding KiwiSaver and/or an Adviser to present at your workplace, the Advisers at Yovich & Co are happy to be of assistance. If you need help with first home KiwiSaver withdrawals or retirement withdrawals/planning we are also the place to visit.
Disclaimer:“Yovich & Co Limited believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation found within this publication on the date of this publication. However, no liability is accepted for any loss or damage incurred by any person as a result of any error in any information, opinion or recommendation in this publication.
Nothing in this publication is, or should be taken as, an offer, invitation or recommendation to buy, sell or retain any investment in or make any deposit with any person.
The information contained in this publication is general in nature. It may not be relevant to individual circumstances. Before making any investment, insurance or other financial decisions, you should consult a professional financial adviser.
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Copyright in this publication is owned by Yovich & Co Limited. You must not reproduce or distribute content from this publication or any part of it without prior permission.”
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