Hey guys, Kieran here.
Winter has well and truly arrived. We've got freezing temperatures and snow-capped mountains all around us down here in the South.
May was a bit rough in our house – we all caught viruses one after another. Any parents watching will know exactly how hard it is to keep normal routines going when you're feeling terrible, especially with little ones at home.
I wanted to share some important financial updates from the recent Budget:
• KiwiSaver changes start 1 July – the government contribution is being cut in half. You'll still need to put in your $1,043 annually, but instead of getting $521 back, you'll only receive about $260.
• If you earn over $180,000 a year, you'll lose the government contribution entirely. So if you're in that bucket and self-employed, there's almost zero extra incentive to contribute to KiwiSaver.
• Next year, contribution rates will increase from the current 3% employee / 3% employer minimum to 4% for both. This means your total KiwiSaver contributions will jump from 6% to 8%, aiming to boost retirement savings faster.
We've seen a small drop in the OCR this month, with banks adjusting their rates accordingly. What's interesting is that the 1-, 2-, and 3-year rates are practically identical now – all sitting below 5%. This creates a good opportunity to split your loan across different terms, giving you both security and potential benefits if rates continue to fall.
If you're coming up to a refix date or thinking about buying property, please get in touch. We now have three advisers available for mortgage advice, working with all major banks – from the Australian institutions through to Kiwibank and smaller New Zealand lenders.
We've recently added a new KiwiSaver provider called GoalsGetter. They offer something different – you can mix and match between six fund managers, including Milford, Pathfinder, Harbour, and Salt. This lets you diversify your KiwiSaver investments while keeping costs in line with other providers.
In the last couple of months, I’ve done a couple of episodes for a friend’s podcast. One was about our When No-One’s Watching initiative we’ve started in Christchurch, and the other around the work we do at CIC Financial.
Here are the links if you’re interested in having a listen:
• Kieran and Seán discuss finances, money and wellbeing
• Kieran and Seán present WNOW: When No One's Watching
We had a shorter month with Matariki. I recently enjoyed a child-free weekend in Blenheim thanks to my sister and brother-in-law – it was brilliant to catch up with friends and enjoy some grown-up time!
Stay warm everyone, and I'll see you next month.
Kieran Sutherland
Financial and Business Adviser
p. 03 377 3693