Unpredictability is an unavoidable truth of life, and Covid 19 has undoubtedly proved that point. 2020 has changed billions of life and made us realize how vulnerable we are when it comes to unforeseen situations. This is the high time to understand the basics of KiwiSaver scheme.

Be it your monthly bills, debts, or lifestyle, NZ’s KiwiSaver providers  can help you survive during hard times by giving the advice you need right now.

While the world is under a tremendous economic crunch, getting a financial consultation is the best thing you can do. Going through an economic crisis during a pandemic like this is natural. This can be due to the following reasons,

  • Illness
  • Loss of Job
  • Injury
  • Medical expenses
  • Paying the mortgage etc.

But, how having a KiwiSaver scheme can help you feel a bit secure?

To get the idea, we need to understand what KiwiSaver is?

KiwiSaver Scheme for Individuals

KiwiSaver is nothing but a voluntary savings scheme to help you have financial security after your retirement. You can make the contributions from your pay or to your scheme provider.

KiwiSaver for employers

Employers need to make sure if new recruits are qualified to be automatically enrolled, enroll them if they are (by abiding by all the necessary rules and regulations), and make KiwiSaver schemes for them.

Balance Fluctuations During Covid

Your KiwiSaver account is not something like a general savings account where you deposit the money you have. It is a different sort of investment account, where you are buying “units” with your money. The value of these units depends on the share market. So the up and down of the financial graph decides the status of the KiwiSaver balance.

KiwiSaver balance does not reflect what you “have.” It reflects what your units are “worth” at a given time.

Why is the share market falling during Covid 19?

Owning a share is like owning a part of a business. When that business faces an unprecedented situation like Covid, the value of those shares goes down.

The coronavirus outbreak is impacting many economies by reducing the demand-supply-production ratio, imports, and exports, among other things. So the businesses you partially own are facing downtimes and the shares in those businesses fall in worth as a result.

Should I change my KiwiSaver fund to something of lower risk?

The second you switch into a fund with less risky investments like property, you will be stepping away from possible windfalls in the near future. And during covid, there is not a single industry that is not going through a volatile situation. It’s vital to make a choice that helps you reach your financial goals.

Your entire financial decision depends on the timing. When exactly do you need that money? If it’s a long-term goal, then waiting for golden days is not a bad idea.

What if I want to retire this year?

The essential thing to understand with KiwiSaver is that you do not need to take all your investment out or completely close your account. It entirely depends on how soon you need that money. If the goal is a short-term one, then the best KiwiSaver advice is, mix the investment. Pull into something defensive.

Can I temporarily stop investing in KiwiSaver from my wages?

You can defer your savings for up to a year and then renew them each year afterward. But by doing so, you are actually not getting the contribution of your government and employer. You are going to miss the amount that is rightfully yours. According to the KiwiSaver providers, it is better to continue your contribution.

What if I am self-employed? Why do I need a KiwiSaver Scheme?

Setting aside a set cut of your income frequently gets you two things:

  • The government’s annual contribution of $521, and
  • The chance to buy investments that have fallen in worth recently.

Suppose you are buying into KiwiSaver to invest for the long term. In that case, you should not be worried about losing money, and you should be paying attention to the buying opportunity going forward.

What if I am going through a financial crisis?

A financial crisis is a legitimate reason to take out your KiwiSaver money. This facility is for those who cannot earn enough to meet the basic needs or pay for treatment, etc.

The only thing you are not allowed to withdraw is any government money that has been invested. You can contact your KiwiSaver providers if you are investing for more than three months. If you have joined recently, then contacting Inland Revenue is advisable.

Setupforlife: How can we assist you?

We understand how helpless you are feeling when the unit worth is falling. Covid has challenged us in every possible way, and most of us have no idea how to deal with the sudden financial downfall. Setupforlife can help you with the necessary KiwiSaver advice that can give you a way out. We can help you make the right call during this uncertain phase.

Conclusion

With Setupforlife’s advice and Haven’s impeccable execution, you can expect a secured financial future. Always remember, these dark hours will pass, and a new dawn will be knocking on your door. So be patient and financially independent.