In the next few weeks we’ll be sending out your annual KiwiSaver statement, and that’s a great opportunity to check your KiwiSaver account is set up in the best way to help you achieve your goals.
There are three things that you should review as part of your annual KiwiSaver Health Check:
1. Are you in the right fund?
With Fisher Funds you can choose from three different investment strategies:
Conservative
Balanced
Growth
Or you can build your own by choosing a mix of the Conservative and Growth Fund.
Another option is GlidePath. Over the course of your life, Glidepath automatically moves you to the appropriate fund based on your age and investment timeframe.
Your choice of investment strategy should be based on your goals, your life stage and your comfort level with risk. And these factors can change over time. For example, the fund you initially invested in might not be right for you anymore, particularly if your financial situation has changed, or you've gone through a major life event, such as buying your first home. Switching to a different fund could help you to achieve your goals faster.
Not sure what fund is right for you?
If you're unsure which type of fund is right for you, take our short questionnaire to help you choose.
2. Are you paying too much tax?
As a KiwiSaver provider, Fisher Funds calculates and pays the tax you are liable for on your behalf. The amount you pay is based on your Prescribed Investor Rate (PIR) which is based on your income. It’s important to ensure this is up to date so that you’re not paying too much tax, or not paying enough!
Checking your tax rate
You can check your PIR in Fisher Funds Online and it will also be on your KiwiSaver statement which you should receive in the next few weeks.
Your PIR is calculated based on your taxable income and your tax residency status. In general, if you earn less, you'll pay less, but there are other factors to consider.
If Inland Revenue believes you have paid PIE tax at the incorrect rate they will contact us and ask us to change your PIR to the rate they believe is correct.
For help working out your tax rate, just check out this helpful guide.
3. Are you saving enough to get the Government Contribution
If you are aged between 18 and 65 and live in New Zealand, each year you could get a boost to your KiwiSaver savings thanks to an annual contribution from the Government.
For every $1 you save into your KiwiSaver account, the Government will contribute $0.50, up to a maximum of $521.43 each KiwiSaver year (1 July to 30 June). No strings attached!
If you contributed less than $1,042.86, you'll see a smaller Government Contribution payment based on the amount that you contributed. Or, if you turn 18 or 65 part way through the KiwiSaver year you will be entitled to a pro-rated Government Contribution.
If you missed out last year this is a great reminder to get your contributions set up so you get the full $521.43 every year.
If you're earning a salary or wages
If you meet the eligibility criteria, are earning more than $35,000 per annum and contributing at least 3% of each pay cheque to KiwiSaver, you'll have no problem reaching the maximum contribution and getting the full tax credit.
If you're self-employed or not working
Remember you can qualify for the Government Contribution too! It's a good idea to either make a few one-off payments or set up a direct debit of $20 per week so that over the course of the year, you contribute the full $1,042.86.
Log in to Fisher Funds Online where you can make a one-off payment or set up regular payments to help ensure that you get the full tax credit next year.
Sort everything out in Fisher Funds Online
If you’ve done your health check and want to make some changes, the good news is that you can make most updates quickly and easily in Fisher Funds Online.
Of course, if you have questions or want to chat about any of the health check points, the team here are happy to help. Give us a call on 0508 347 437, send us an email or chat with us online by clicking on the chat icon at fisherfunds.co.nz
