Five Ways to Optimize and Maximize Your KiwiSaver Account This Year

Date Published: 4 January 2024

Key Facts

• Ensuring that your KiwiSaver account is in an appropriate fund type for your financial situation and goals is essential
• Different funds (conservative, balanced, growth, aggressive) offer varying returns
• It’s important to check how much you’re contributing and to understand how your employer’s contributions work
• Consider contributing a minimum of $1042 each year to qualify for the maximum government contribution of $521
• Using a KiwiSaver calculator can help you determine if your current contributions will meet your retirement savings goals
• Responsible investing is becoming more commonplace and it is possible to align your KiwiSaver investments with your personal values
• Scheduling an annual review of your KiwiSaver account is highly recommended

Article Summary

For New Zealanders, the KiwiSaver account can be an instrumental part of financial planning, particularly for retirement. Ensuring that your account is working efficiently involves multiple considerations, starting with checking the type of fund you’re in. Different funds such as conservative, balanced, growth, and aggressive offer varying returns, which typically correlate with the level of risk involved. Aggressive funds, for example, tend to deliver better returns over time but can fluctuate more frequently.

Keeping track of your contributions is another crucial factor. If you have not made an active selection, you’re likely contributing 3% of your income. It’s also essential to understand whether your employer’s contributions are part of your normal salary or additional to it. Also consider contributing at least $1042 annually to your KiwiSaver to receive the maximum government contribution of $521.

Analysing whether your current contributions will reach your retirement savings goal is another step in optimising your account. Tools such as a KiwiSaver calculator can give you an estimate of your prospective retirement sum. Furthermore, given the trend towards responsible investment, considering the ethical implications of where your funds are invested is more relevant than ever. Providers can typically provide a list of the companies that your fund is invested in for this purpose.

Lastly, setting an annual reminder to review your KiwiSaver account can help ensure its continual alignment with your financial needs and goals. An active interest in your investments is highly recommended since it is likely to be a significant part of your retirement finances.

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