As humans, we have a wonderful habit of overcomplicating things - and KiwiSaver is no different. KiwiSaver has now been around for over 16 years, and its great success has been its ability to empower us as investors to take control of our future. This empowerment has however come at a cost, with what sometimes feels like some overwhelming and complex decisions for us to navigate on our own.
With this in mind, let’s keep things simple and run through 5 easy hacks for getting the most out of your KiwiSaver.
Government contributions – never miss out on free money
You can’t really talk about KiwiSaver without talking about . As long as you’re eligible, every year the government matches your KiwiSaver contributions with 50c for each dollar you pay in, up to a maximum of $521.43. So, to get the full government contribution, you simply need to make sure that $1,042.86 (or just over $20 a week) goes into your KiwiSaver account each year. If you were only going to check one thing each year on your KiwiSaver this should be it.
If you’re an employee and are working full time, you’ll probably hit your minimum contribution without noticing. However, it’s always good to check your contributions for the year to make sure. You can to Fisher Funds Online and check our government contribution tracker to see how much you’ve put in.
Check your fund, but don’t be a compulsive switcher
Frequently switching between funds to try and get the “right” investment fund is one of the most common mistakes we see our clients make. Changing funds to try and time the market, like moving to a more conservative fund when you see your balance fall, can mean you miss out on investment returns when the markets improve. The most important factors when it comes to selecting a fund are your investment goals and how long you have until you’ll need your money. Completing our investor profile questionnaire for or can help you choose which fund could be best for you.
If you’d prefer an option that reduces the effort involved in reviewing and changing your fund, you could choose our GlidePath service, available in both and . GlidePath automatically invests your savings in a mix of funds according to your age and is designed to reduce your investment risk as you get older.
It’s important to remember that GlidePath might not suit everyone. It doesn’t take your personal circumstances into account, like your tolerance for risk, or if you’re planning to use your KiwiSaver for your first home. If you’re not sure if GlidePath is right for you, with our team, we’re happy to help.
Online Access– keep up to date with your KiwiSaver
Information is a powerful tool – but getting the balance right of checking in on your account every now and then, but not too often, is crucial to the long-term success of your KiwiSaver account. It’s good to check on your KiwiSaver balance from time to time to see if you’re on track to reach your goals, but checking too often can lead to concern if you see your balance going up and down. KiwiSaver is intended to be a long-term investment, and short-term market ups and downs are normal. If you haven’t registered to view your account online using Fisher Funds Online it’s worth .
Supplement your KiwiSaver with a managed fund for your shorter-term goals
Locking money away until retirement or for a first home can prove to be one of the biggest advantages of KiwiSaver, as we can’t dip into it for other shorter-term expenses and goals. This does however limit our options, with many shorter-term goals off the table as a result.
Investing in a can be a simple way to fill this gap and the great news is it will look and feel very similar to your existing KiwiSaver account. Unlike KiwiSaver, a managed fund can also be set up in more than one name allowing accounts to be aligned and managed across the family for a range of different goals.
Get some advice
Perhaps the most important hack of all, if you’ve still got questions on how you can get the most from your KiwiSaver – get some help. A from Financial Advice New Zealand shows that Kiwis who seek out professional financial advice exhibit good financial behaviours more often than those who don’t. They’re more prepared for retirement, feel better about their financial position and are more comfortable making big financial decisions. We have a team of advisers who can discuss both your current situation and your investing goals and help you make the right decisions.