Whether you’re saving to purchase your first home or want to make sure you have the money to continue to do the things you enjoy in your retirement, KiwiSaver can be a really valuable tool to help you save. We’ve put together these five quick tips so you can make sure you’re getting the most from KiwiSaver and all its benefits!
1. Check you’re in the right fund for you
Do you know which fund your KiwiSaver money is invested in? It’s incredibly important to make sure you choose the fund most suitable for you. If you’re not sure which fund you’re in, it’s easy to check by logging in to your online account. There are a few considerations when choosing a fund, but the two most important are how long it will it be before you want to withdraw your money, and how well you can tolerate risk. Our handy tools can step you through the process of deciding which fund is best for you. You can learn more here.
2. Review your contribution rate
While we know that not everyone can afford to increase KiwiSaver contributions, it may be worth contributing more to your KiwiSaver account if you’re in the position to do so. If you’re employed, the default employee contribution rate is 3% of your before tax pay, but you can choose to change this and contribute 4%, 6%, 8%, or 10%. While you are contributing via your salary, your employer also has to contribute a mimimum of 3% as well. If you’re self-employed or not currently working, you can make voluntary contributions to your account at any time.
You can find out more about contributing to KiwiSaver here. If you’d like to see how much of a difference changing your contribution rate or making extra contributions can make, you can check out our retirement projector tool by logging in to your online account.
Making extra contributions can really add up over time, leading to thousands more in your KiwiSaver account when you retire.
3. Make sure you’re getting the government contribution
One of the best benefits of KiwiSaver is the government contribution of up to $521.43 each year. No matter what your employment status, as long as you’re eligible, for every $1 you contribute into your KiwiSaver account (up to $1,042.86), the government could contribute 50c. You can learn more about the government contribution and check your eligibility here.
4. Don’t panic when the markets are falling
The past twelve months have certainly tested the risk tolerance of many KiwiSaver members, but it’s important to remain calm through investment market ups and downs. If you panic when you see your KiwiSaver balance drop, and switch from a balanced or growth fund to a more conservative fund, you will lock in your losses, and could also lose out when markets recover in the future.
While balanced and growth funds can experience more volatility in the short-term, in the long-term they should deliver higher returns.
5. Check your account once in a while (but not too often!)
To make sure your KiwiSaver investment is on the right track, it pays to check in on your account every now and then. The easiest way to do this is by logging in to your online account, where you can see your balance and any investment earnings, check and change your account information and make one-off or regular contributions. While it’s great to check in on your account, it’s important to remember that for most people KiwiSaver is a long-term investment. While your balance should grow over time, in the short term you may see it go up or down, so you might not want to check it every day!
