Cheat sheet: How to get more out of KiwiSaver
19 April 17
Reading time: 4 minutes
Who doesn’t want more money? KiwiSaver is a great way to save and invest for the future you. As well as the money you put in, your employer (if you’re employed) contributes and the government pays in too. Cha-ching! Keep reading to find out how to get the most out of your KiwiSaver account
Keep track of your KiwiSaver account
Don’t know who your KiwiSaver provider is? Contact Inland Revenue to find out.
Your KiwiSaver provider should be sending you regular statements. It’s worth visiting your KiwiSaver provider’s website and registering online (if they offer this service) so you can log in to check your account balance and investment returns.
To keep track of the KiwiSaver contributions that you (and your employer, if applicable) have paid to Inland Revenue, you can register for My KiwiSaver on the KiwiSaver website.
Choose the right KiwiSaver fund
There are five main types of KiwiSaver fund:
The value of riskier funds tends to rise and fall more, but over long periods these funds usually grow more, too. Head over to fundfinder.sorted.org.nz to learn more about the different types, compare KiwiSaver funds and choose one that works for you.
If you were automatically enrolled into KiwiSaver at work and never actively selected a fund, your money would have been invested into a default scheme with one of the government-appointed default providers.
All the default KiwiSaver funds are balanced funds, so if you’re still some way off from retirement you may want to consider switching to a growth fund that’s likely to deliver higher returns on your money over the years.
Check your tax rate
There are four prescribed investor rates (PIRs): 0%, 10.5%, 17.5% and 28%.
You might be paying more tax than you need to. Work out your correct PIR on the Inland Revenue site, and check your current PIR with your KiwiSaver provider.
Find out what fees you’re paying
KiwiSaver providers charge different fees for managing your account. You can use the Fund finder to compare KiwiSaver fund fees, or the KiwiSaver fees calculator to see how much you’re likely to pay in fees up to age 65.
KiwiSaver fees come in two forms: a flat membership fee (ranging from $0 to $60 a year, averaging around $32) and a percentage of your account balance (typically higher for riskier funds).
When you first join KiwiSaver, the fixed fees have a big effect because your account balance is lower. This reduces over time as your KiwiSaver balance grows. The percentage fee, though, usually has a bigger overall effect, particularly over a long period of time.
Increase your KiwiSaver contributions
Contributing more to KiwiSaver is a great way to boost your numbers. Raising your KiwiSaver contribution rate to 8% from 3% or 4% could give you hundreds of thousands of dollars more in retirement. Most of that money will likely come from market gains over the years, so the more you put in and the more time it has to grow, the more you’ll have thanks to the power of compounding. Contact your employer to increase your KiwiSaver contribution rate.
At the very least, it’s worth putting in at least $20 a week, or $1,043 a year (between 1 July and 30 June). This way you’ll get the full government contribution (the member tax credit) – that’s a free $521 straight into your KiwiSaver account!
If you’re working, earning $34,762 or more and contributing at least 3% of your pay, you’re all set to get the full government match automatically. If you’re earning less than that, you’d need to top up to qualify for the full match.
The KiwiSaver member tax credit matches 50 cents for every dollar you put in, up to a maximum of $521 – so if you contribute less than $1,043 for the year you’ll still receive a proportional credit.
Transferring your other super funds into KiwiSaver
If you have money saved in a different workplace superannuation scheme, or in an overseas scheme, you may be able to transfer it into your KiwiSaver account. Contact the superannuation scheme provider and your KiwiSaver provider to find out more.
Wondering how much you could have in KiwiSaver by age 65? Find out using this tool: