At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.
Here are five straightforward steps a New Zealand KiwiSaver member can take to make the most out of their KiwiSaver account, even without prior knowledge of KiwiSaver or investing.
Choose the right fund type
KiwiSaver funds vary from conservative to aggressive based on the types of investments they hold Conservative investments are lower risk and typically have lower returns, but these are suitable for those that are close to retirement.
Aggressive funds, while riskier, offer potential higher returns and are often suitable for younger members with a longer time until retirement. Assessing your risk tolerance and retirement timeline is crucial when selecting the most appropriate KiwiSaver fund.
Regularly review contribution rates
Ensure you are contributing enough to maximise employer contributions and government benefits. For most people, this means contributing at least 3 percent of your gross salary, which employers must match up to 3%. Increasing your contributions can significantly enhance your savings over time, taking advantage of compounding returns, compounding interest.
If you don’t know what that is, look that up. Compounding interest. It’s the eighth Wonder of the world according to Einstein.
Claim member tax credits
To receive the full member tax credit from the government, which is $521 of free cash. You need to contribute at least $1040 per year if you’re eligible.
This is free money boosting your savings significantly over the years.
Keep track of fees
All funds charge management and administration fees. These can vary widely and significantly impact your investment over time. Comparing these fees among different providers and choosing a fund with reasonable costs can help you keep more of your returns.
Stay informed and stay engaged
Regularly review your KiwiSaver account statements and updates from your provider. Understanding where your money is being invested and how your fund is performing can help you make informed decisions. Additionally, attending free workshops or consulting with a KiwiSaver adviser can provide valuable insights and guidance tailored to your specific circumstances.
That’s a wrap
By taking these steps, KiwiSaver members can better navigate their options and enhance their potential returns, contributing to a more secure and happier retirement
If you need any financial help or advice please get in touch with us at Super-Advice.
