20 December 2021

    New Year, new you?

    Join the gym, see your family more and get KiwiSaver fit


    With 2022 upon us and most of us enjoying a well-earned break, it’s only natural to start thinking about the future. Setting New Year’s resolutions may be cliched, but it is important to think about the year ahead, or further, and set goals that you can hold yourself accountable for. Whether it is clocking up the kilometres or committing to a weekly Sunday lunch with the extended family, set a goal, and stick with it.

    When it comes to financial resolutions it can be a little overwhelming and it is often hard to work out where to start. So, this summer when you’re putting your feet up and thinking about how you can improve your financial wellbeing, here’s a tip – start small and focus on actions that will make an impact over the long-term.

    One easy place to start is to check in on your KiwiSaver account for a quick annual review to make sure that it’s running smoothly and is best placed to help you achieve your savings goals. To help, here are five questions to ask yourself:

    1. Have you checked your prescribed investor rate (PIR)?

    No one wants to pay more tax than they have to, but you might be doing so unknowingly. Or you could be paying too little and you may get stuck with a tax bill at the end of the year. To work out how much tax you’ll pay on your KiwiSaver account your provider uses what is called a PIR (prescribed investor rate). If you’re on the wrong PIR, you could be paying more than needed. It could literally pay to check in with your provider to make sure you're on the right rate.

    Here is a quick way to calculate your PIR.

    2. Are you in the right KiwiSaver fund?

    Choosing what fund to be in can be confusing to begin with. The key things to think about are how long your investment journey is going to be - how long will it be before you’ll be dipping into your account? And how comfortable are you with risk?

    There are a number of tools, like our Investor Profile Questionnaire, to help you make the decision and you should be able to get guidance from your KiwiSaver provider.

     3. Are you on the right contribution rate?

    Getting your contribution rate right is a key factor in determining how much you’ll have when it comes to retiring and it’s hard to know exactly how much you need. As an employee, your default rate is 3% if you haven’t selected a higher rate. You can choose to contribute 3%, 4%, 6%, 8% or 10%. If you’re in a position to contribute more it’s well worth it. Over the long term, shifting 3% to 10% could lift your retirement savings by hundreds of thousands of dollars.

    4. Are you contributing regularly?

    Putting aside a small amount frequently is one of the best bits of advice we pass on to children about saving and is one of the most important principles of investing. If you’re self-employed or not currently working you can still grow your savings with KiwiSaver by making voluntary contributions. Anyone can make extra payments into their KiwiSaver account at any time, either as lump sums or as regular automatic payments. Your KiwiSaver provider can tell you your options for making voluntary contributions.

    5. Are you set to get the full government contribution?

    Fancy $521 a year from the Government to go towards your KiwiSaver investment? If you meet the eligibility criteria and make a contribution of at least $1042, which works out to just $20 a week, to your KiwiSaver account between 1 July and 30 June each year you can get the full Government contribution. If you can’t contribute the full amount, you can still get some of it. For every dollar you put in up to $1042, the government will match it with 50 cents. It’s a good incentive to keep making regular payments.

    Sticking to New Year’s resolutions can be tricky but making just one positive change can have a big impact and a yearly KiwiSaver review can set you on the right path for a successful financial future. Best of all, these checks are quick and easy to make, meaning you will have plenty of your summer left for your daily runs and seeing family and friends.

    Fisher Funds KiwiSaver Scheme

    Build a better future with Fisher Funds. Over the last 20 years, we have helped over 250,000 Kiwis on their investment journey. We share our knowledge with our clients to help them make better financial decisions.

    If you are ready to join, you can join online within minutes, or request a call from a KiwiSaver specialist to find out more.

    Join Now  » or   Request a call »