Time to run the numbers on your KiwiSaver investment?

October 6, 2023

Let's face it: planning for retirement can be a daunting task, but it's essential to ensure a comfortable and secure future.

With KiwiSaver being one of the most popular retirement savings schemes in New Zealand, are you confident you're making the most of your investment? Read on to learn more about what to look at when running the numbers on your KiwiSaver investment.

Know your contribution rate

One of the first things to consider is your contribution rate. As an employee, you have the option to contribute 3%, 4%, 6%, 8%, or 10% of your gross salary. The question is: are you contributing enough to achieve your retirement savings goals? 

Use a calculator to find out. Generally speaking, depending on your circumstances, you may want to replace between 70-100% of your current income to meet your spending needs in retirement. And you might find that, on its own, a 3% or 4% KiwiSaver contribution rate is unlikely to give you enough, even when including your NZ Super in your calculations. 

Of course, while a higher savings rate means more money invested for your retirement, it's essential to find the right balance between your current financial commitments and long-term savings goals. Take some time to assess your budget and determine the right contribution rate for your personal circumstances.

Choose the right KiwiSaver fund for you

Do you know where your money is invested? If you don’t, it probably means you’ve never made an active choice of fund. So, your money is likely to be in a default (balanced) KiwiSaver fund – which might or might not be appropriate for your goals and risk profile. 

KiwiSaver offers a range of funds with varying levels of risk and potential returns. Conservative funds invest mostly in fixed interest assets, providing a potentially lower risk but potentially lower returns. Growth funds, on the other hand, have a higher proportion of shares and property, offering higher potentially returns but usually with more risk involved. 

It's crucial to select a fund that matches your risk tolerance and investment timeframe. As a general rule, the younger you are, the more risk you can probably afford to take on, as you have more time to ride out market fluctuations.

Fees matter (though they’re not the main factor)

When it comes to KiwiSaver, fees can have a significant impact on your overall returns. All funds charge management fees, and some may also charge performance fees or other additional costs. 

While higher fees don't necessarily equate to better performance, it's essential to compare the fees charged by different providers to ensure you're happy with what you’re getting. Consider the impact of fees on your long-term returns and weigh that against the potential benefits of a specific fund.

Monitor your KiwiSaver fund performance

Regularly reviewing how your KiwiSaver fund is performing is crucial. Compare your fund's returns against other funds with similar risk profiles and the market average. If your fund consistently underperforms, it might be time to consider switching to another provider or fund. 

Remember: past performance is never indicative of future returns, but it can provide valuable insights to inform your decision-making.

Maximise annual Government contributions

If you are aged 18 to 65, one of the benefits of KiwiSaver is the annual Government contribution, previously known as the member tax credit. 

Every year, provided you meet the qualifying criteria, for each dollar you contribute to your KiwiSaver account between 1 July and the following 30 June, the Government adds an extra 50 cents, up to a maximum of $521.43. You start receiving this bonus from the first dollar you put in, but to maximise your Government contribution you need to contribute at least $1,042.86 each year.  To be eligible for the Government contribution, you need to be a KiwiSaver member aged 18 to 64 and be living in New Zealand (with some limited exceptions). 

Not quite sure how much you’re contributing? It’s a good idea to check by mid-June, and top up your account if needed. 

We’re here to help

Wondering if you're on track for a comfortable retirement? Get in touch. We can help you review your circumstances and ensure you’re making the most of your KiwiSaver plan.


The information contained in this publication is intended for general guidance and information only. It has not been personally prepared for you. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult with us before making any investment decision. Historical market performance may not be indicative of future market performance.