NZ Herald - Plus Feature August 2024

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A New Zealand Herald Commercial Publication | Thursday, 29 August, 2024

THE FINANCE ISSUE KiwiSaver | The costs of growing old | Retirement savings and inflation Scams – the new frontier | How not to spend an inheritance Making a will | How to complain

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inside Maximise your KiwiSaver

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The costs of growing old

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Investing in the Agri-sector

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Scams – the new frontier

13

Retirement savings and inflation

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Making a will

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How to complain if you get a raw deal

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How (not) to spend an inheritance

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Design Courtney Wenzlick | Writer Diana Clement Commercial Revenue Manager Kelly Spice Advertising enquiries E: advertise@nzme.co.nz

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Photo/Supplied

Maximise your M KiwiSaver investment with expert advice

any young and not-quite-so-young people signed up to KiwiSaver when it first launched, or they started working and then forgot about it, says Generate adviser Edward Bryant. That means too many are missing out on potential investment returns that could help them buy a first home or retire comfortably.

Rotorua-based Bryant is one of a team of Generate advisers nationwide who offer no-obligation, in-person KiwiSaver advice sessions. The sessions empower clients to understand how KiwiSaver works, set goals, and make tweaks if necessary that could help maximise their returns over a lifetime.

Take charge of your KiwiSaver account and ensure your investment is working hard for you.

Generate adviser, Edward Bryant, discusses the benefits of advice sessions to help you optimise contributions and fund selection.

NO OBLIGATION ADVICE Generate offers one-on-one KiwiSaver advice sessions with no obligation to join Generate.

It has a nationwide team of advisers such as Bryant nationwide who are happy to meet you at your home, work, a café, or online via Zoom at a time that suits you. They’ll talk you through all your options, so you can make an informed decision and have a better idea of what you’re on track to have at retirement.

Advice sessions tackle everything from the right level of contributions at every age and stage in life, to choosing a fund to match your personal appetite for risk. “You need to make

sure you set up your KiwiSaver account right for your goals,” Bryant adds..”

Whatever your goals and priorities, making good KiwiSaver account decisions can mean having a better financial future, he says.

THE BENEFITS OF CONTRIBUTING TO THE RIGHT FUND Many New Zealanders are paying into their KiwiSaver accounts, but are in the wrong fund type for them, says Bryant. It’s something Generate advisers see regularly with new clients who haven’t had advice before.

Growth and aggressive funds will typically have better outcomes at times over the decades than a default fund.

“Many people sign up to a KiwiSaver scheme through work, or go to their bank and end up in a default fund,” he says. “Then they’ve forgotten about it.”

“Your fund choice is arguably the most important part of your KiwiSaver investment and most overlooked,” says Bryant.

Choosing the right fund type is one of a number of tweaks clients typically make after seeking advice.

ADVICE AND EDUCATION NOW WILL PAY OFF Every age group has a mix of people with different priorities and goals. In the 30 to

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Photo/GettyImages

45-year-old age group, clients are often saving for a first home, or have recently overcome that hurdle, says Bryant.

“It’s tempting after buying a home to put KiwiSaver contributions on the back burner.

You start back at square one with a $1,000 balance. That’s actually the stage in life where contributing and making some changes to your KiwiSaver account can have the biggest impact.”

Increasing, not stopping, contributions after buying a first home is desirable. Time is an investor’s friend and the earlier every dollar is contributed the more time there is for it to snowball. That’s why contributing a little and often is the golden rule, especially for younger age groups. The longer the time horizon, the greater the investment growth.

Generate advisers talk to clients about how upping contributions to 4, 6, or 8% can benefit them. “Increasing your contributions by just 1-2% could potentially add tens of thousands of dollars to your KiwiSaver account at retirement. You’re never going to regret it. I’ve never talked to somebody who’s 65 and said, ‘I’m really gutted that I put that extra bit into my KiwiSaver account’..’”

ANY AGE IS A GOOD AGE TO ENGAGE For people aged 45 to 60 it’s never too late to take good advice, ramp up contributions, and earn the best returns over the next decade or two, says Bryant.Some people can afford to contribute more to their KiwiSaver account once children have left home and the mortgage is paid off.

“When people get to those later years they can start to panic a bit. It’s definitely harder, the later you start,” says Bryant.

A Generate KiwiSaver adviser will create projections for you to illustrate what a good retirement might look like and options to maximise savings. “Projections can really spark people into making those changes and getting in the right fund. It will start to cost

you in the long run if you don’t.”

THE OPTION OF UPPING CONTRIBUTIONS While upping contributions is great at any age that leads to significant impacts on your KiwiSaver investment over -time, switching to a growth or aggressive fund for a decade or two can also be helpful for some people.

“Whilst we can’t predict the future, these funds often return 1-2% more per year than balanced and conservative funds.

Compounded over time that extra few per cent really adds up.

“Over 300k Kiwis are still in default funds and many others stay in conservative or balanced funds because they’ve been scared off by the ‘risk’ element,” says Bryant.

“The wording has made people think that these high-risk funds are a real gamble with their money.” A better way to look at it is “volatility” [ups and downs] as opposed to the “risk” of losing everything. Investors get more volatility along the way, but usually higher growth as a result.

“At the age of 50, there’s still 15 years to go before you can touch the money,” he adds. “If you don’t have a big balance, there’s a lot to gain by dialling up and very little to lose. Time can really help to mitigate [that volatility].”

But before switching, talk to your adviser about your risk tolerance and options, says Bryant. Aggressive and growth funds aren’t right for everyone – particularly if you are looking to withdraw within two-three years.

And some people simply can’t sleep at night with money in a volatile fund. Others are happy with the ups and downs along the way in return for greater growth.

KIWISAVER FOR SELF-EMPLOYED CONTRACTORS AND PROPERTY INVESTORS Bryant says KiwiSaver isn’t just for employees. Contractors and self-employed people can benefit. They often tell him that investing in a KiwiSaver account isn’t for

them. Yet the first $1042 invested each year attracts a $521 in government contributions.

“It’s pretty difficult to match that 50% return,” he says. “That’s the best small investment you’ll likely ever make.

“Likewise, property investors should view a KiwiSaver account as another string to their bow,” he says. “I’d never discourage someone from doing property investment. Go for it. But KiwiSaver is a great way to hedge your bets.”

Because of its diversification, KiwiSaver helps to lower the overall level of risk of relying on business profits and/or property investment for retirement.

For a 30 year old, the minimum $1042 contribution combined with the government top up would grow to around $55K at retirement - plus investment returns would be on top, says Bryant.

EDUCATE YOURSELF One of the main reasons Generate was founded was the education piece: to address a gap in the market of Kiwis not understanding how KiwiSaver works and how to make the most of it.

“The great thing about having a KiwiSaver account is that it is quite a simple product, and we can sit down and take you through from start to finish exactly how it works,” says Bryant.

“We have some awesome calculators that we use to show projections of what you could finish up with when you do buy that first home or when you’re getting to 65.”

Advice sessions generally last about 45 minutes, and you’re welcome to bring along a friend, partner, house mate, or colleague, says Bryant.

A KIWI BUSINESS WORKING FOR YOU Generate is proudly New Zealand-owned and operated and has been around for 10+ years.

It has over $5B funds under management.

It is award-winning (Consumer NZ People’s Choice, Canstar Most Satisfied Customers,

Reader’s Digest Trusted Brand) and have a track record of strong long-term performance: • The Generate Focused Growth Fund ranked 1st out of 8 NZ Multi-Sector Aggressive Category Funds for 10-year results to 30 June 2024* • The Generate Growth Fund ranked 2nd out of 13 NZ Multi-Sector Growth Category Funds for 10-year results to 30 June 2024* • The Generate Moderate Fund ranked 1st out of 13 NZ Multi-Sector Moderate Category Funds for 10-year results to 30 June 2024* Generate’s goal is to educate and empower Kiwis to make smart financial decisions that will help them be better off in the future.

To find out more or request a meeting with a Generate adviser, head to generatekiwisaver.co.nz/letschat

No part of this article is intended as financial advice; it is intended as general information only.

Past performance does not guarantee future performance, and all investments involve risk and returns can be negative as well as positive. *Source: Morningstar KiwiSaver Survey June Quarter End 2024. The Generate Focused Growth Fund returns ranked 1st out of 8 NZ Multi Sector Aggressive Category Funds, the Generate Growth Fund ranked 2nd out of 13 NZ Multi Sector Growth Category Funds and the Generate Moderate Fund ranked 1st out of 13 NZ Multi Sector Moderate Category Funds, for a period of 10 years as of 30/06/2024. © 2024 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution in New Zealand.

To see a copy of the product disclosure statement or advertising disclosures, see generatekiwisaver.co.nz/ disclosures The issuer of the scheme is Generate Investment Management Limited.

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The costs of growing old Older people in New Zealand are often treated as if they were cash machines.

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hether it’s scams, financial exploitation such as family or caregivers helping themselves to money, expensive essentials such as hearing aids, or simply paying the cost of retirement villages and rest homes, older people are sometimes seen as an easy source of money by families, businesses and scammers.

The slide into taking advantage of older people begins with everyday language such as “the elderly,” “boomers,” “grey tsunami”, which dehumanises the person. Once they’re no longer human, it’s easier for less honourable people and organisations to help themselves to someone’s money.

Age Concern also sees cases where families don’t want to let mum or dad spend money and deplete “their inheritance.” Older people worked for their money and it’s theirs to use.

IT’S EXPENSIVE TO GET OLD It’s expensive to get old. Whether it’s the $500

or $1,000 wheelchair, the $4,000 hearing aid, or the long list of other stuff that makes someone’s life comfortable, it comes at a cost.

Think electric beds, stairlifts, mobility scooters, automated La-Z-Boy chairs, and so on. Even simple tools such as bed rails, raised toilets, walking sticks, magnifiers, braces, walkers, ramps, and a heap of other stuff can cost way more than someone on NZ Super can afford.

Once someone becomes too frail to clean the house, do basic DIY, or even cut their own toenails, they’re paying $30 to $50 an hour for services. Or if they can’t drive there’s Driving Miss Daisy, or a mobility taxi to pay for.

Hanny Naus of Age Concern said the perception that older people all have mortgage-free homes and therefore no costs, is not correct. Rates, insurance and maintenance add up and homes need repainting and reroofing.

Photo/GettyImages

THE EYE WATERING COSTS OF LIVING AND INSURANCE Housing for older people such as retirement village units and aged care costs a pretty penny. At the time of writing retirement village units cost from $200,000 to $4m. The village typically takes a 20-30% cut of that when the resident dies or moves on. Basic rooms in rest homes for people with savings cost $1464.26 per week ($76,141.52 annually) in Auckland.

A private bathroom can add thousands more per year.

According to Lifedirect’s online comparison, private medical insurance including surgical and specialist visits costs $7252.96 at age 75, which most older people can’t afford on NZ Super. If paying privately, a knee replacement ranges from $24,700 to $30,100, a simple colonoscopy $1900 to $3300, a hip replacement $23,800 to $28,600, and cataracts $3000 to $5500 per eye.

FINANCIAL EXPLOITATION OF OLDER PEOPLE Older people can be the victim of financial exploitation especially if they start to have memory problems. They’re an easy target for carers’ sob stories, commission salespeople who think they’re onto a winner, and oversized bills for trades and services.

It’s just as likely to be a member of the family who wants “their inheritance” early helping themselves to money. Or a son,

daughter, or grandchild has access to the EFTPOS card while doing caregiving work.

If a relative does need help, then some of the things a caring relative can try are: • Get educated. Alzheimer’s NZ and other groups such as Dementia Auckland offer education and support groups.

• Have a family conference or set up a family discussion group.

• Discuss enduring powers of attorney for property and personal care and welfare (EPAs) with the relative.

• Create a living will/advanced care plan.

• Talk to the bank. With the account owner’s approval, the bank might be able to structure accounts so that only small sums of money are available daily. Or joint signatories are required for large withdrawals.

• Share concerns with general practitioners, even if they can’t discuss the relative specifically. Make contact with the hairdresser, café staff, librarian or anyone else who may have concerns.

• Use care agencies. Care agencies have strict policies around clients and money that private carers aren’t subject to, said Naus.

• Check the relative’s credit files with their permission. Credit files from Illion, Equifax and Centrix can give an indication if there are financial irregularities or credit being taken out in someone’s name.

Connections: The Heartbeat of Our Lives

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s we move through life, the value of our connections with others becomes increasingly clear. These relationships are our true social currency, and it’s through communication that we maintain and deepen them. Whether it’s a heartfelt conversation with a loved one, a chat with a friend while out shopping, or enjoying a lively dinner in a bustling restaurant, these moments are what enrich our lives.

However, hearing loss can make these connections more challenging, particularly in noisy environments. What were once effortless conversations can become frustrating and isolating experiences.

THE FUTURE OF HEARING: AUDÉO SPHERE INFINIO This September, a groundbreaking innovation in hearing technology is arriving in New Zealand.

Phonak is introducing the Infinio platform, featuring the Audéo Sphere Infinio—the world’s first hearing aid equipped with a dedicated real-time AI chip called DEEPSONIC, designed specifically for separating speech from noise.

This technology is a game-changer for those who have struggled to hear clearly in noisy settings.

The Audéo Sphere Infinio is not just another hearing aid; it represents a revolution in how we experience sound. With 53 times more processing power than previously seen in the industry1, this device makes dynamic, real-time adjustments, allowing users to hear conversations with unprecedented clarity, no matter the direction of the sound. Imagine being in a crowded restaurant and hearing

the conversation clearly with ease —that’s the experience the Audéo Sphere Infinio delivers.

In fact, users of the Audéo Sphere Infinio are two to three times more likely to understand speech from any direction compared to other leading hearing aids2. This makes it a true breakthrough for anyone struggling to keep up in noisy environments.

Reflecting on his 25-years career in audiology, David Crowhen, Audiologist and Commercial and Operations Director for Sonova New Zealand (Wholesale) Ltd said: “I’ve listened to countless hearing aids as technology has developed overtime, but the Audéo Sphere Infinio is truly one-of-a-kind. It’s as if this device creates a shield around you, filtering out distracting noise and allowing you to focus entirely on the conversation. The excitement around this technology is unprecedented, and, through partnering with hearing care professionals across New Zealand, we are excited to bring this revolutionary solution to those who need it most.”

Phonak’s Infinio platform, alongside the Audéo Sphere Infinio, is ushering in a new era of hearing technology. This isn’t just about improving sound quality—it’s about enhancing the quality of life by making it easier to maintain those all-important connections.

As we age, staying connected with our loved ones and community becomes even more crucial. With innovations like the Audéo Sphere Infinio, Phonak is ensuring that these connections remain strong, clear, and vibrant, no matter where life takes us. Ready to experience the future of hearing? Learn more at www.phonak.co.nz.

References 1. Press Release: Sonova announces two new hearing aid platforms, including the first hearing aid with real-time AI to address most pressing need in hearing loss https://www. sonova.com/en/sonova-announces-two-new-hearing-aidplatforms-including-first-hearing-aid-real-time-ai-address

2. Wright, A., Kuehnel, V., Keller, M., Seitz-Paquette, K., Latzel, M. (2024). “Spheric Speech Clarity applies DNN signal processing to significantly improve speech understanding from any direction and reduce the listening effort.” Phonak Field Study News retrieved from https://www.phonak.com/ evidence

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Harnessing Kiwi savings to support the country’s agricultural backbone impact, than by saving with Rabobank

Rabobank stands out in New Zealand’s financial and helping fund New Zealand’s primary producers and the work they do producing landscape as the sole food and agribusiness delicious food for us all.

“Rabobank offers a range of savings banking specialist. By saving with Rabobank, products, complete with competitive rates to help your savings grow. Whether you’re in the Kiwis not only receive competitive interest, they market for an on-call savings account with interest rates, a 60-day notice actively support a sector that is vital to the nation’s competitive account to maximize your savings potential, or a stable term deposit with good rates, economy.

Rabobank can help.”

E

stablished by farmers in the Netherlands more than 125 years ago, Rabobank now operates in 38 countries, servicing the needs of about nine million clients worldwide.

Food and agri is in the bank’s DNA, said Rabobank NZ CEO Todd Charteris.

“Here in Aotearoa New Zealand, we have a single focus on food and agribusiness. Under our business growth strategy, we’re committed to continuing to support Kiwi farmers, growers and food producers,” he said.

In New Zealand, Rabobank’s 500 employees work from 27 offices located across the country and they’re proud of the communities in which they live and work. Guided by a global mission of Growing a Better World Together, Rabobank takes a long-term view of the rural sector, said Charteris.

“We work alongside our clients, supporting them to achieve their business goals and to help them realise opportunities in areas such as climate change and freshwater regulations,” he said.

“Rabobank’s strategy is to become New Zealand’s leading food and agri bank –

building on its deep global connections and strong New Zealand networks.”

Backed by our global team of research analysts, Rabobank has access to the latest in-depth insights into food and agri market trends and opportunities, said Charteris.

“We’re also committed to working with policymakers to provide input to important policy issues through the eyes of our clients,” he said.

“We do all of this as part of our long-term commitment to support New Zealand’s worldleading farmers, growers and food producers.

In fact, that’s at the heart of everything we do.”

RABOBANK’S DEPOSIT OFFERING FOR SAVERS Savers with Rabobank are part of something truly productive, as every dollar saved with Rabobank helps fund New Zealand’s farmers and growers, Charteris said.

“We know that New Zealand’s savers are increasingly interested in investing for positive impact. ” he said.

“And what better way to make a positive

THE RABO COMMUNITY FUND & HOW IT’S SUPPORTING RURAL COMMUNITIES As a food and agri specialist, Rabobank understands that rural communities are at the heart of new Zealand’s agribusiness and farming sectors. The Rabo Community Fund assists a range of initiatives and was set up to contribute to the vibrancy and resilience of rural New Zealand, said Charteris.

“Prosperous rural communities lead to more successful farming and production businesses, which in turn means better outcomes and achievements for everyone involved,” he said.

“The Rabo Community Fund is based on the international Rabo Foundation’s social fund, which has operated for more than 45 years investing in farmers’ self-sufficiency in a range of countries around the world.

“The Community Fund was set up here in New Zealand in late 2021 and is funded by an annual contribution from Rabobank New Zealand. Since then, the fund has contributed more than $2 million into over 100 community initiatives across New Zealand.

“Decisions on where to allocate funding are made in conjunction with the bank’s four regional Client Councils, groups of Rabobank’s

farming client representatives who work with the bank to address key industry and community challenges in farming and agribusiness. The councils have identified six key themes: long-term industry capacity and agricultural education, environmental sustainability, the rural/urban connection, rural wellbeing, adaptation/disruption and natural disaster resilience.”

SOME OF THE FUND’S CURRENT INITIATIVES INCLUDE: • Surfing for Farmers: This initiative invites farmers to catch some waves, offering a refreshing break to manage stress and boost mental health. It’s more than just surfing; it’s a social gathering where farmers can enjoy a barbecue and camaraderie post-surf.

• Growing Future Farmers: This comprehensive two-year programme equips graduates with specialised training and development opportunities, tailored for the agricultural industry.

• Garden to Table: As a national food education charity, Garden to Table empowers children across New Zealand to cultivate, harvest, prepare, and share wholesome food.

• Meat the Need: A farmer founded and farmer led charity which helps connect the dots between farmers who want to donate some of their produce and those affected by food insecurity.

Rabobank New Zealand Limited is New Zealand’s only specialist food and agri bank.

To find out more about Rabobank and its online savings options, visit www.rabobank.co.nz

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Scams The new frontier

Photo/GettyImages

money in a bank account. However, the item

Scams are growing increasingly sophisticated never arrives and the seller blocks the buyer.

It’s not uncommon for scammers to claim and New Zealanders are more at risk than ever that multiple people are interested and the person to pay by bank transfer wins, before. No-one is too smart to be scammed as the first creating time pressure. doing the rounds involves buyers scammers use AI and other technology to become whoOnetellscam sellers that they’ll send a courier with the cash to collect the item. The scammer asks increasingly believable. the seller to pay for insurance or other fees up

S

cammers are no longer just phishing for information. They are creating complex identities, manipulating voices, and even producing fake videos to deceive their victims.

Videos and voices are used increasingly in a variety of ways including romance scams, kidnapping scams and even business email scams where a scammer inserts themselves between a tradesperson or lawyer and their client and requests the payment account to be changed to their own.

ROMANCE SCAMS Too many Kiwis get caught up in romance scams and it can happen at any age. Typically, the victimmeets someone online, not realising that the date is a fake identity adopted by a criminal. The scammer convinces the victim they’re real and plays on emotions to scam money out of them. The scammer often starts asking for small sums of money that can solve

personal problems such as health problems or business troubles. The amounts get larger and larger as the victim is caught believing a web of lies.

Thanks to AI scammers can now fake what they look and sound like. They can create deep fake avatars that look human when chatting online, and their voices can be manipulated to sound like any accent they want.

Kiwi victims may be less likely to be suspicious of an accent from an Englishspeaking or other western country than a more exotic one. Scammers can look like anyone they want.

The victims are often completely hooked and go to some lengths to convince banks, friends and relatives that their partner is real.

FACEBOOK MARKETPLACE SCAMS Facebook Marketplace is awash with scams.

Scammers very often list expensive items such as iPhones, cars or designer clothing at bargain prices and ask buyers to deposit the

front, usually via a fake insurance or courier website.

Or they are encouraged to click on a site that looks like the buyer’s bank, but their login details are harvested. Scammers then use this login information to empty the victim’s bank account.

Even pickup is a risk. It’s not uncommon for the scammer to ask for a “deposit” and the rest to be paid on pickup. Only the address for pickup isn’t theirs.

Another scam is where buyers send through fake bank transfer confirmations, or meet the seller in person, pretend to do a bank transfer, and the seller hands over the goods.

The money never appears in their account.

Screenshots of transactions are easily faked.

Scams can happen through Trade Me, but they aren’t as common. The feedback system on Trade Me, provides some additional protection, although there have been cases of scammers taking control of an innocent person’s Trade Me account and offering nonexistent goods for sale.

CRYPTO SCAMS GROWING New Zealanders are losing hundreds of thousands of dollars to crypto scammers.

Once a novelty, crypto has become popular and sadly, scammers have latched onto it.

In the not too distant past, scammers sometimes demanded ransoms in Bitcoin or other crypto to unlock computers they’d hijacked.

Now one of their many ruses is encouraging people to invest in crypto by transferring real money from their bank accounts to a fake crypto investment scheme.

Janine Grainger, chief executive of genuine New Zealand-based broker Easy Crypto, said scammers will convince their victims not to tell the bank what they are doing with the money. “[Victims] are coached by scammers to lie.

[One] excuse I heard was ‘if you tell your bank about this transaction, then your bank will try to discourage you from doing it because they want the commission and they want you to do the deal with us’.”

TAKE CARE Avoiding scams gets harder and harder.

However, Kiwis should be vigilant. Avoid clicking on emails from strangers and be wary of links and websites. They can be faked to look real, but go to a cloned site. Be wary of giving out personal information, use strong passwords, not ‘12345’ or a pet’s name, and install antivirus, and firewall software.

Visit Netsafe.org.nz for more information.

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How are your retirement savings faring against inflation?

Inflation in New Zealand is slowly falling.

However, it has been above the Reserve Bank of New Zealand’s 1% to 3% target band for more than three years now, making a big dent in many people’s retirement savings.

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rom June 2021 when inflation first exceeded 3% it has been a headache for some. In June 2022 inflation hit an eye-watering 7.3% and has been a problem ever since, although it fell to 3.3% in the first quarter of this year.

High inflation has meant that some people have had to curtail their savings to pay for living expenses and skyrocketing mortgage payments.

That’s not the only hit retirement savings have taken. In volatile times people often choose “safe” investments such as term deposits over more volatile [subject to ups and downs] investments such as KiwiSaver and funds.

Even if the new normal for inflation settles back at 3% or 2%, rather than the 1% that Kiwis became used to prior to the pandemic, retirement savings could take a hit over time, eroding in value.

Photo o/GettyImages

TERM DEPOSITS A RISK Moving to term deposits is a risk in its own right because inflation also eats away at term deposits by stealth. The savings lose value in real terms and buy less even after interest.

The world also went through a decade of inflation from 1970 to 1980. People who relied on term deposits and fixed-rate bonds saw their savings eaten away over that decade.

Many were earning 2.5% to 4% in the bank, while inflation averaged 11.5% for the decade.

That meant a lot less in the retirement pot when they finally clocked out of work for the last time.

Or if they’d already retired, a big chunk of their capital was eaten up by inflation.

AMP’s managing director Jeff Ruscoe cites statistics that after 15 years, even at 2.5% inflation, the spending power of money will have fallen by 31%.

“So if you are 50 today, and you want to

continue to live a lifestyle like you do now, you’re going to need 31% more money by the time you get to retirement to live that lifestyle [on 2.5% inflation].”

KIWISAVER A BETTER BET? Over the long term it is generally expected that growth KiwiSaver funds will outrun inflation.As prices increase, so too usually does the value of the businesses invested in by funds. That is not guaranteed.

Anyone who is concerned about their retirement savings should seek advice from a financial adviser. Some KiwiSaver providers can offer free advice to members.

Whether they’re 25 or 55, people saving for the future need to ensure their KiwiSaver and other investments are sufficiently weighted for growth to outpace inflation. “By investing in term deposits, [retirees] fix their income, and it doesn’t go up with inflation. So you’re always going backwards in that space,” said Ruscoe.

The trick is that most people aren’t going to spend their savings in the first five years of their retirement, and don’t need to withdraw everything to put in term deposits as some do.

A diversified portfolio with a portion in growth funds allows the capital to keep growing, instead of being eaten up by inflation.

THINK OF IT AS A ROAD TRIP Good planning makes retirement easier. Ruscoe cites the example of a road trip. “If you were heading off on a road trip into a country, you didn’t know, you would sit down and map out a plan.

“That’s the same with retirement planning. If you don’t make that plan, you will just arrive, and you might not arrive at the right time and place.”

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Making a will can help avoid a messy end Dying without a will is a messy and costly business for those left behind. A will is a legal document that sets out how an estate is dealt with when someone dies. Yet only 50% of Kiwi adults have one, according to the Public Trust.

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t is a very New Zealand attitude to say “no worries, I will be fine without a will”. In reality that isn’t the case. If there is more than $15,000 in assets including KiwiSaver and cars, the money is distributed according to law, which isn’t always what someone might want.

Death isn’t just about money. There are things that may be important to the deceased, but which the law disposes of clinically if they don’t have a will. That includes: • Jewellery, artworks or family heirlooms.

• Funeral wishes.

• Appointment of guardians for children aged under 18 and • The fate of pets.

Wills need updating periodically as well. A person’s choice of how their estate should be

dealt with changes over time. A beneficiary may have died, or a new person of importance may have come into the family. Or someone has had assistance from a particular charity and wants to give back.

WHAT HAPPENS IF YOU HAVE NO WILL? If there is no will, there is a statutory formula in the Administration Act 1969 for distributing the estate of anyone who dies “intestate”.

The spouse or partner, if there is one, gets the first $155,000 of the estate, the chattels, personal possessions and furniture, and a third of everything else. This often comes as a shock to surviving spouses and partners. Especially when the rest of the money passes down to stepchildren.

There are adult children who are happy for their parent or step-parent to remain in the house until they die. Others may not be so willing and may push for the sale of the house.

LEAVING MONEY TO CHARITY People often choose to give money to charity when they die. That’s called a bequest. Even modest sums such as $1,000 really count for charities.If everyone left a small percentage of their legacy to good causes, charities could do a whole lot more good work.

Leaving money to charity in a will works for people who may not be able to give during their lives for a variety of reasons, but would like some of their legacy to go to good causes.

Public Trust chief executive Glenys Talivai said it’s not just the wealthy who leave to charity. Anyone can. “They can use their will not only to help their whānau and friends, but also to look after a charity or a cause that they care about.”

Many charities are suffering from increased costs during the cost of living crisis. “It’s a challenging time for charities because their own costs are increasing,” Talivai said . “So even if their donations are staying about the same, actually, the costs of them being able to do what they do have increased quite significantly.”

In addition to well-known charities such as the Red Cross, Salvation Army, or SPCA, some people choose to leave money in their wills to charitable trusts or community foundations that pool the money and support multiple charities from investment income.

HOW MUCH TO GIVE When it comes to choosing how much to leave in a will, a percentage is often better than a fixed sum, which might get eroded by inflation.

Gifts get paid first, which makes a percentage a better idea, than a fixed sum, which could be problematic if the estate has been eaten away over the years by living costs. .

The gift might just be 1% or 5%, Talivai said.

“On average from our research, the average charitable gift in a will is around $10,000. So it doesn’t have to be a multi-million [dollar sum].”

Another approach is to treat charities as an additional child. If someone has two children, for example, the will can be split three ways, with a third going to charity.

Giving to charity while alive is more tax efficient than leaving a bequest in a will. That’s because taxpayers can claim 33.33 cents in the dollar for donations to charities approved by the Inland Revenue Department, which includes most well-known charities.

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How to complain if you get a raw deal their telecoms and utilities providers. When

From insurers to government departments, Kiwis those complaints aren’t resolved fairly, complaints services are free have options when disputes arise. Independent independent to use.

In 2023 year alone, over 3000 Kiwis complaints bodies are free for the public to use voiced their dissatisfaction with telephone and internet providers through Fair Way’s and can solve a wide range of problems fairly. telecommunications dispute resolution

EQC COMPLAINTS Independent complaints about the Natural Hazards Commission/Toka Tū Ake [formerly EQC] have been taken over by Fair Way in 2024. Thanks to earthquakes, floods, cyclones, and other natural disasters in the past decade, many Kiwis have found themselves left out of pocket by EQC decisions.

W

OTHER WAYS TO COMPLAIN This is not an exhaustive list of complaints bodies. The Ombudsman [which is a separate organisation to the financial ombudsman schemes] can handle a wide range of other complaints including aged care, fair treatment of disabled people, and complaints about other government agencies. Complaints about work can be taken to the Labour Inspectorate.

Homeowners with complaints about their builder can take them to the Master Builders Association if their contractor is a member.

Tenants and owners in body corporates have the Tenancy Tribunal.

Not every complaint has a free complaints service. For dispute resolution where there is no mandated free service, there are quite a few private providers of paid mediation, or otherwise the courts.

For lower-value complaints, the Disputes Tribunal is an option. It costs only $45 to lodge a complaint, and might result in a good outcome.

Finally, sometimes simply going to social media, and often repeatedly, can get the desired outcome.

hether it’s a complaint about a business or a government department, the first place to start is by complaining to the organisation in question. Most will have a process and quite often a team that deals with complaints.

Sometimes completing an online complaint form is all that’s needed to get the problem solved.

When an acceptable resolution can’t be reached there are a wide range of organisations that can help. For example, if a complaint to Work & Income about NZ Super fails, there’s the option of contacting the local Member of Parliament (MP), the parliamentary Ombudsman, which handles complaints about government agencies, the Office of the Privacy Commissioner, or in some circumstances Te Kāhui Tika Tangata Human Rights Commission.

Or in the case of a KiwiSaver complaint that isn’t resolved by the company in question, members can complain to the scheme’s statutory supervisor. And if that doesn’t work, all KiwiSaver schemes must

belong to an independent ombudsman’s scheme.

FINANCIAL OMBUDSMEN Complaints around money are common.

Most banks, lenders, insurers, foreign exchange dealers, and estates providers, in most cases, are required by law to belong to an independent dispute resolution service.

Customers need to complain formally to their provider first. If that fails, the customer should ask for a letter of deadlock. They can then take the complaint to one of New Zealand’s financial ombudsman services: the Banking Ombudsman, Insurance & Financial Services Ombudsman, and Financial Services Complaints Limited.

These ombudsmen act as impartial referees.

As well as the financial ombudsmen services, Fair Way, a private company, is the dispute resolution service for many financial advisers. The Law Society handles complaints about lawyers.

TELECOMS AND UTILITIES COMPANIES New Zealanders love to complain about

service: Telecommunications Dispute Resolution (TDR).

Private company Utilities Disputes Limited handles independent dispute resolution for electricity, gas, and water complaints that can’t be solved by the provider. Online complaint summaries reveal intriguing cases, from unauthorised customer switches to undelivered iPhones.

Some are more obscure, such as the homeowner who was plagued with bad smells from a water provider’s biofilter.

The resolution for that involved the provider installing an air conditioner in the customer’s house.

MOTOR VEHICLE DEALERS Dodgy motor vehicle dealers feature regularly in cases heard by the Motor Vehicle Disputes Tribunal.

The tribunal handles disputes of up to $100,000. Case studies on the NZ Legal Information Institute databases suggest it’s not uncommon for complainants to seek to reject the car. Some are successful. It’s definitely worth searching the names of car yards before buying from them. Some appear rather too often in complaints.

A legacy of care The selfless act of leaving a gift in your Will to Médecins Sans Frontières/Doctors without Borders (MSF) can help to ensure MSF is always ready to respond, delivering humanitarian medical aid – today, tomorrow and always.

T

he late Gillian Brame, who passed responded to crises, including conflicts, away in October 2023, was a disasters, disease outbreaks and remarkable individual exclusion from healthcare, in who chose to support over 70 countries. In the MSF’s mission, same year, generous through her support from exceptional $2 Australian and million bequest.

New Zealand Born in donors went China in 1942 towards to missionary projects in parents, Jill’s 34 of those life journey countries. was shaped MSF’s by resilience activities and a in Palestine, commitment to Yemen and helping others.

Niger were the After navigating top-supported by turbulent times Australians and New Gillian Brame and travelling though Zealanders, including India, England and surgical and wound care, eventually settling in New maternal and child health, Zealand, with a lot of time spent in nutrition, and mental healthcare. The Samoa, she became a dedicated teacher. visionary support from generous donors is In 2023, more than 69,000 MSF staff what makes this work possible.

As violence raged in West Darfur in June 2023, wounded people came in waves to Adré hospital in Chad, where they were treated by MSF and Ministry of Health teams.

PHOTO/©Mohammad Ghannam/MSF Matthew Reid, Chair of MSF New Zealand, emphasised his gratitude for the generosity of gifts like Jill’s. “As an impartial and independent organisation, MSF does not receive funding from the governments of New Zealand and Australia, so relies heavily on donations from the community. Gillian’s gift will ensure MSF is always independent and always ready to respond, delivering humanitarian medical aid – today, tomorrow and always.”

According to a recent study by online

Will writing provider, Safewill, almost half of New Zealand’s adults don’t have a Will. When you write a Will, you ensure your wishes are carried into the future, protecting those you love and all that you care about. To learn more about how to leave a legacy of expert medical care, then please get in touch with MSF’s friendly Gifts in Wills team on 0508 633 324 or gifts.wills@nz.msf.org.

To learn more about MSF please visit msf.org.nz

© Oliver Barth/MSF

THERE THANKS TO YOU By leaving a gift in your Will to MSF, you can help ensure MSF is always independent and always ready to respond, delivering humanitarian medical aid – today, tomorrow and always.

Find out how to leave a legacy of expert medical care msf.org.nz/leave-a-legacy 0508 633 324 I msf.org.nz I NZBN: 2637615

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Photo/GettyImages

How (not) to spend an inheritance

New Zealand’s ‘great wealth transfer’ is seeing more and more people in their 50s and 60s inheriting money.

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ike any ‘windfall’ ranging from selling businesses, or even winning the lottery, some people will squander their gains.

Research by the Grattan Institute in Australia found that most inherited money is received by people aged over 55. It makes sense that would be the case in New Zealand as well. Their parents are most likely in the 75-85 year age bracket.

The sudden influx of wealth tempts people who haven’t worked for their wealth to make impulsive decisions.

Stories of people who have quickly squandered their fortunes are plentiful.

Tips on how to handle new-found wealth include: DON’T MAKE IMPULSIVE PURCHASES One of the most common mistakes people make after receiving a windfall is spending money on high-ticket items such as luxury cars, expensive holidays, or even a large home. While it might feel good in the short term, such impulsive purchases can deplete

the windfall rapidly.

Barfoot & Thompson’s Paul Neshausen once helped a lottery winner buy a total of 10 houses over a year. Neshausen told OneRoof that going from no money to a lot of money could send some off the rails, however. “I liken it to rugby league players who turn professional. They go from being destitute to earning $300,000 [to] $500,000 a year, and they go off the rails because they’ve not been given the right guidance or guardianship. They waste all their money, [and] they get themselves in trouble.”

RIVAL Wealth financial adviser Tim Fairbrother isn’t against someone who has received a windfall spending a little on themselves. But he recommends getting advice before making any big decisions. He told OneRoof: “Your goals will substantially change in terms of the lifestyle you’re going to live, the house you’re going to buy, and things like that,” he said. “You’ve essentially had a one-off change, for you, your family and future generations.” That requires

careful planning.?

AVOID RISKY INVESTMENTS It can be tempting to plunge money into crypto or other high risk-ventures such as unproven business ideas. While these investments can sometimes yield high returns, they can also result in significant losses. A financial adviser can help a beneficiary or winner create a diversified portfolio that balances risk and return.

“You’d want to set up a large piece of [the win] in a portfolio of assets, which would produce enough income for you to live off and continue to grow in terms of capital growth,” said Fairbrother.

AVOID SUPPORTING UNSUSTAINABLE LIFESTYLES Sudden wealth can lead to an unsustainable lifestyle. Plenty of lottery winners or sports stars who come into unimaginable wealth end up broke. Opes Partners economist Ed McKnight told OneRoof that he would create a budget before buying a luxury home.

He added: “I wouldn’t buy a $20m house, because of the expenses. Your rates will be absolutely outrageous. Same with insurance and maintenance. You may not have the income to cover that. I’d buy something more humble, like a $4m or $5m house. A really nice house. But I wouldn’t go spending it on a massive house.” People also need to

budget for taxes, which sometimes come as a shock. Whilst inheritances and lottery wins aren’t subject to income tax in New Zealand, the subsequent earnings and capital gains might be in certain circumstances.

SET YOURSELF UP FIRST Financial advisors recommend paying off existing debt, setting up an emergency fund, and still contributing to KiwiSaver. This would put financial security in place and give peace of mind. McKnight said he would be looking to create a portfolio to last the person’s life, then pass down to children and grandchildren. “I would talk to a financial adviser and split it between shares and property,” he told OneRoof. “Once I had sorted myself out [with a financial plan and investments], I can then pay off my family’s mortgages and afford to be generous. But I would be setting up my life first.”

AVOID THE ‘TOO GOOD TO BE TRUE’ OFFERS Anyone who comes into money ought to be wary of new friends and also people or organisations offering “investment opportunities” or “business deals” that seem too good to be true. Scams targeting people who have come into money are common. People should do their due diligence, seek independent advice, and never rush into decisions.

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