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KiwiSaver churn traps; 30 PF pointers for 30-somethings; Mortgage brokers what are they good for?; 5 methods for setting retirement goals; When to invest?

Posted in Personal Finance

By Amanda Morrall

1) KiwiSaver churn traps

David Maida, writing for Financial Alert, reports on the poaching of KiwiSaver accounts from banks employing aggressive sales and switching strategies.

Maida, quoting Fidelity Life CEO Milton Jennings, reports that customers are being switched into bank owned KiwiSaver funds without even understanding when, why and how it occurred. Jennings wants to see the Financial Markets Authority take a closer look at transferred KiwiSaver funds.

This is the second such article written by Maida expressing concern on advisers churning KiwiSaver. Readers may also like to read a previous story by my colleague Craig Simpson here.

A KiwiSaver Distribution and Guidance Note issued by the FMA (previously Securities Commission) can be viewed here.

2) 30 by 30 

If 60 is the new 40, then 30 year olds (not sure how many come to our website) really should be celebrating their youth instead of moaning and groaning about getting old.

Age really is a state of mind, I have come to believe, however getting older (chronically) does present some obvious life challenges.

It strikes me, given the focus on careers, kids (who usually start to come on scene around this time) that life gets ridiculously busy and at times feels arduous. What happens for many during this period of coming of age, is the burden of financial responsibility grows heavy caused by mortgages, insurances, wills, trusts and an ever growing mountain of bills and expenses.

Without the proper guidance or or perspective, things can really spiral out of control.

Here's 30 tips for 30 somethings to ponder with respect to their personal finances via Tiffany Aliche from the Huffington Post.

3) Brokers, what are they good for?

If you are planning on using a mortgage broker, be sure you understand how they can get paid and if they have any cozy relationships with certain banks.

Unlike some jurisdictions where brokers cast a wide net among a spectrum of lenders to compete for the best interest rate possible, mortgage brokers have their favourites which narrows the net. 

For more on whether you should rely on a mortgage broker to orchestrate the biggest loan you are likely to take on in your life, check out this piece from the Globe and Mail about DIY mortgage shopping. 

4) 5 methods for setting retirement targets

One of the toughest parts about retirement planning is knowing how much to target in savings to last you in old age. Given that big unknown (how long you will live) it can be a guessing game.

 The advice most financial advisors will give is to plan to live as long the projections forecast (in New Zealand the average age for women now is 83 and for men 80) and set your targets accordingly.

You can only be pleasantly surprised if you have more money to upgrade to a nicer retirement home. Forbes Money offers five tips for setting retirement targets in the following article. 

5) Best time to invest

Given market unpredictability, first time investors may be at a loss to know when or when not to invest. The best time to invest?

"When you have Money,'' argues Mark Mobius in this blog for the Business Insider.

For your A-Z personal finance guide here's how to order a copy of Amanda's book Money Matters: Get your Life and $ Sorted. The book is also available in ebook format as well via AmazonTake Five is published on Mondays, Wednesdays and Fridays. You can also follow Amanda on Twitter @amandamorrall; check out her previous Take Fives here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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2 Comments

Hi Amanda, cant access link

Hi Amanda, cant access link under 3 above

Don, link has been fixed

Don, link has been fixed now.
Craig