CASE STUDY: Getting Started (Sophie & Dave)


As an engagement gift Dave’s grandmother Joyce paid for Sophie (aged 24) and Dave (25) to have a consultation with a Saturn Portfolio adviser. She wanted them to get on the right track from the beginning and was worried that they were “just drifting along”.


After some discussion we established some specific goals:


  • Buy their first home in 1-2 years ( in a price range to qualify for the KiwiSaver HomeStart Grant)
  • Go on their OE in 2 years
  • Start a family in 4-5 years


Sophie and Dave had their respective student loans under control and were both in KiwiSaver. Dave had been signed up by his parents early on and Sophie had been auto-enrolled two years ago when she graduated and started work.


Outside of KiwiSaver they had saved about $12,000 although they admitted they could be doing a lot better. Dave was spending some money on further training which we agreed was an investment in his future earning capability.


First we looked at their KiwiSaver schemes- specifically how KiwiSaver could help them into their first home.


Dave had been in KiwiSaver for over five years and could withdraw all but $1,000 of his KiwiSaver balance. He was in an Aggressive Fund and agreed to switch to a less risky scheme offered by his provider to reduce the impact of a market downturn immediately before his first home withdrawal. Once the home was theirs Dave would switch back to his Aggressive Growth fund.


Sophie had to stay in KiwiSaver for one more year before she could withdraw her funds which fitted in well with the goal of buying in 1 to 2 years. Sophie was in the same default scheme she was initially enrolled in. She would also switch to a Growth scheme once they had the house as KiwiSaver would then revert to being a long term retirement savings vehicle for them both.


Together we reviewed the house price and salary thresholds to see how they could get the maximum benefit from KiwiSaver.


Dave and Sophie could potentially get an $8,000 HomeStart grant if they buy an existing home or $16,000 towards a new build. They will have to live in their new home for six months before going on their OE. Dave and Sophie were now focused on setting a budget to allow them to increase their deposit and maintain a fund for emergency spending and travel!


When we added up their available funds in KiwiSaver, the HomeStart grant and their planned savings over the coming year Dave and Sophie could see their home purchase becoming a reality.


They also saw the benefits of taking out some low cost Trauma and Life cover while they are still young and without health issues.


They left the meeting energised by having a plan and a strategy to meet their goals. Grandmother Joyce reported it as ‘money well spent!’

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