RNZ's money correspondent Susan Edmunds. Photo: RNZ
Send your questions to susan.edmunds@rnz.co.nz
I receive super every two weeks. I've been informed by the IRD that I don't have to fill out tax returns anymore. Now I'm about to receive some inheritance money from overseas, where the overseas government has already taken tax out, and the solicitors over there will send me the remaining amount. I'm not sure how much that will be, but it won't be a huge amount.
My question is this: Will the IRD here in NZ be taxing my inheritance again?
No. New Zealand would not apply any additional amounts of tax to an inheritance.
How good is ChatGPT at calculating how much money I need to retire early? I feel I'm always catching it out.
I put your question to Nick Zwi, a wealth adviser at Generate.
He says it's probably better to rely on ChatGPT for things that are less vital for your future than retirement planning.
"For one thing, it's an LLM (large language model) trained on words not numbers. Even if you use a prompt such as 'act as my financial adviser' and tell it your assumptions, it can rely on outdated numbers and give inaccurate results.
"What's worse, AI hallucination is a possibility. This is when an LLM perceives patterns or objects that are non-existent, creating results that are completely nonsensical.
"While it can be fun to play around with, we'd err on the side of caution. Even ChatGPT itself often tells you to see a financial adviser at the end of its answer."
Zwi says a human financial adviser would be a better first step - they could talk to you about your options, including KiwiSaver and managed funds.
I don't understand why people are paid NZ Super based on their relationship status? We work hard all our lives and earn separate wages, yet as soon as we turn 65 it revolves around being single or in a couple. Surely everyone over the age of 65 should get the exact same entitlement regardless of relationship. It seems old-fashioned and unfair, especially if you are part of a couple. What happens in other countries?
Much of this is due to how it's expected your costs will fall.
The amount you get varies according to whether you're a single person, a single sharing with other people or in a relationship. Whether your partner qualifies for super also has an impact.
It does cost less to live as a couple when you pool your resources than it does to live as two single people. And it costs less to run a house sharing with another single person than it does to live alone. (Although it's interesting to note that you can have up to two boarders before it affects your pension.)
Paying everyone the single rate would have an additional cost, in a system that is already forecast to increase in cost quite significantly.
But you're right, this probably is partly leftover from a time when it wasn't as common for people in relationships to have separate financial lives. And it does create distortions - and questions about what counts as living together as friends and when you're straying into a relationship.
New Zealand's pension system is a bit unusual in that it's not means-tested and is available to virtually all permanent residents and citizens over 65. Australia's pension is less generous but there, too, they have a couple rate.
I know we have a living wage that's meant to indicate what people need to earn to be able to live a full life. But isn't it based on a couple? How does that work for me as a single person?
Craig Renney, the policy director at the Council of Trade Unions, is the person I usually take living wage questions to.
He says internationally, the living wage is generally calculated based on two adults and two children.
"In New Zealand, we do it basically on one-and-a-half earning adults and two children."
From there, the calculation would be designed to work out how much they would need to earn to "live a life of decency".
It's not a clear-cut thing because the cost of living varies around the country, and people's individual circumstances can vary a lot depending on things like their childcare costs, or the cost of their housing.
Renney says if the living wage were calculated according to different circumstances - for example a single person with no children versus a single parent or a married parent - there could be situations where living wage-accredited employers pay people differently according to their relationship status.
"It gets difficult quickly."
He says it's likely that overall the amount you'd need to earn to be able to fully participate in society, as the Living Wage is designed to reflect, would probably be about the same for a single person as for a person with a spouse and kids.
"It would probably come out remarkably similar. If you, say, need a smaller house or something else different ... someone on a living wage right now is much better off than someone on the minimum wage. So you're always better off on a living wage. We encourage everyone to use living wage employers as much as possible."
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