'Too many myths' about KiwiSaver
The Retirement Commissioner says there are too many myths around KiwiSaver.
Diane Maxwell has been travelling around New Zealand talking about KiwiSaver and found the same wrong ideas came up again and again and again.
She told Paul Henry about a few of those myths.
Some people think their KiwiSaver money belongs to the Government and fear it could take the money away from them whenever it feels like grabbing it.
This is completely wrong: "No one else can take it away," she says.
If you contribute $1,042 every 12 months the Government will give you an extra $521 (it's known as the Member Tax Credit). Once that money is paid into your account it is yours - forever. The Government cannot take it back.
One man told Ms Maxwell he had heard his friends comparing their KiwiSaver balances as if it was real money. Ms Maxwell had to explain to him that it is real money. Very real money.
"It is yours, it is in an account with your name on it and you get to keep it."
It is possible this misunderstanding has arisen from the fact that in most cases you can only access the money when you turn 65.
There are exceptions to the 65 rule. You can withdraw some funds earlier to buy your first home, or if you are in genuine financial hardship.
Ms Maxwell says KiwiSaver is part of relationship property and is counted like any other asset to be split when couples break up. That means that each partner gets a share of their partner's KiwiSaver.
There is a commonly-held belief that when you die your KiwiSaver money dies with you.
This is also completely wrong: it's like any other asset and is passed on to your next of kin, or whoever you say should receive it in your will.
However, if you don't have a will and have saved more than $15,000 in KiwiSaver, it is an expensive and lengthy process for your family to access the money.
That is why it is important that you make a will and remember to include KiwiSaver in it. You can leave your KiwiSaver to anyone you want to.
There is one more myth that Ms Maxwell hears a lot. It is not a KiwiSaver myth, but it is something that Ms Maxwell wants to end.
Your debts do not go away if you avoid them for five years. You will also find yourself facing interest and penalty payments that will continue to build up until the debt collector eventually catches up with you.
If you are worried about debt, or need some advice on budgeting there are places you can get free help.
The New Zealand Federation of Family Budgeting Services offers free and confidential advice.
The Commission's website, Sorted, has advice and tips on saving and many other aspects of money management.
The theme of this year's Money Week is "show me the money".
The Commission for Financial Capability wants to show people some of the costs of their retirement and get them motivated to start saving.
It surveyed people and found that only 11 percent knew that a retired couple can expect to spend between $250,000 and $300,000 on groceries, over a thirty year period.
People are living longer and it is not unrealistic for a young person to expect to have thirty years of retirement.
Ms Maxwell says it is crucial to start setting aside money into a retirement fund like KiwiSaver.
If you save even a small amount when you are a teenager or in your twenties it will grow into a large amount over time, thanks to compounding interest and compounding investment returns.
Ms Maxwell says you can save when you are young and still have a good time.
"I don't want people to save so much for tomorrow that they do not enjoy today."
Every cent helps.