News | Features
7 May 2024 5:37
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Sport
  • Weather
  • Finance
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • Crime.co.nz
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business > Features

    Retirement Payments Likely To Make A Comeback

    Annuities – which are typically monthly payments to retired people, over and above NZ Super – may be on their way back onto the New Zealand scene.


    Ten or 15 years ago, more than half a dozen companies offered annuities, but currently only Fidelity Life does. Other providers dropped out, probably because our tax system and related issues don’t favour annuities, so there were too few takers.

    But with KiwiSaver leading to more New Zealanders retiring with considerable savings, the government seems to be taking new interest in annuities.

    Retirement spending "is the next stage of policy thinking and policy work," Finance Minister Michael Cullen told members of the Association of Superannuation Funds of New Zealand at their recent conference. "The annuities market in New Zealand is pretty underdeveloped by international standards. But we’ve got time to think the thing through. Nobody is retiring on KiwiSaver for the next four years."

    Said National’s finance spokesman, Bill English, "There should be more of a demand for annuities. That seems to be the next logical step in the kinds of savings policies developed in the last few years."

    If you buy an annuity, you give a lump sum to an insurance company in exchange for regular payments for the rest of your life – and perhaps also your spouse’s life.

    Some annuities pay steadily increasing amounts, to take inflation into account. And some include a guarantee that if you die within, say, ten years of purchase, payments will continue to your estate until the ten years is up. Nevertheless, those who live for many years get the best deal.

    Provided whatever government we have over the next few years makes annuities more attractive, they are likely to prove popular. Having a guarantee that you won’t outlive your savings is an excellent use of part of your nest egg.

    Cullen also told the conference his government is not planning to increase the NZ Super age beyond 65. "People need stability". Nor is it looking to make KiwiSaver compulsory. "We’re going to achieve our ambitions with a voluntary scheme."

    He acknowledged there have been problems with the payment of KiwiSaver funds to people’s estates, after they die. Officials and industry experts are discussing a solution, he said. "It’s not something we should rush."

    English said National plans to announce its KiwiSaver policy as part of its tax package, "after Treasury opens the books," in the next few weeks. He added that "it’s well worth running up an overdraft to join KiwiSaver," but said it is "an expensive scheme for the government".

    He also said National wants to create "vehicles to allow New Zealanders to invest in infrastructure, through bonds or equity." Such products would provide much-needed long-term investments for managed funds, English added.


    WIN A BOOK ON KIWISAVER
    Random House, publishers of my new little black book "KiwiSaver Max: How to get the best out of it", have made 20 copies available to readers of this column.
    For information on the book, which includes tips on getting more from KiwiSaver and the results of an extensive survey of 31 providers, see www.maryholm.com.

    The book answers many readers’ questions about KiwiSaver.

    To enter the competition for a copy, write in 50 or fewer words what you think of KiwiSaver – good, bad or both. Be practical, pathetic, poetic, political – anything but boring. Entries of more than 50 words will be disqualified. Some of the winning entries will be published in this column.

    Email your entry, with "Investor column giveaway" in the subject line, to mary@maryholm.com by Monday September 22. Please include your name and street address (not box number).

    © 2024 Mary Holm, NZCity

     Other Features News
     10 Sep: Spring clean your finances
     13 Aug: Plan ahead to give yourself a debt-free Christmas!
     10 Jul: Wise up to clear credit card debt
     07 May: Ways to prepare for the unexpected
     30 Mar: Time for a financial progress check
     10 Feb: Studying up on NZ Super
     10 Jan: Managing the back-to-school bills
     Top Stories

    RUGBY RUGBY
    22-year-old Liana Mikaele-Tu'u would trade playing for the Black Ferns for the chance to represent the Warriors women - after next year's Rugby World Cup More...


    BUSINESS BUSINESS
    Peanuts that may contain high levels of a food toxin have mistakenly been released into supermarkets More...



     Today's News

    Business:
    Peanuts that may contain high levels of a food toxin have mistakenly been released into supermarkets 4:47

    Tennis:
    Injured Australian Open tennis champion Jannik Sinner is casting doubt on his participation at the looming French Open 21:57

    Entertainment:
    Kevin Costner is only bringing female actors from his epic new Western 'Horizon: An American Saga' to its world premiere 21:45

    Entertainment:
    Tori Spelling still has chipped teeth from kissing Jason Priestley 21:15

    Entertainment:
    Selena Gomez is said to be feeling "secure and happy" with Benny Blanco 20:45

    Entertainment:
    Oliver Hudson experienced "debilitating" withdrawal symptoms when coming off anti-anxiety medication 20:15

    Entertainment:
    Alfred Molina "disappointed" his late father by turning down a job in a restaurant to pursue his career as an actor 19:45

    Entertainment:
    Valerie Bertinelli has admitted her late ex-husband Eddie Van Halen "wasn't a soulmate" 19:15

    Netball:
    Greer Sinclair's putting her hand up for more court time at centre for the Tactix ahead of tonight's ANZ Premiership clash with the Magic in Hamilton 18:57

    Entertainment:
    John Leguizamo has branded Patrick Swayze "insecure" and "neurotic" and admitted the late actor was "difficult" to work with 18:45


     News Search






    Power Search


    © 2024 New Zealand City Ltd