Here are the top 5 things we think you should know to make sure you're KiwiSaver savvy:
1. It can work for you — even if you aren't working
Even if you are not working or self-employed you can still join and take advantage of certain benefits. If you can afford to contribute the equivalent of $20 per week ($1,042.86 per year) then the government will contribute up to $10 per week ($521.43 per year) each KiwiSaver year. Note this applies to members between 18 and 65.
2. Being in the right fund matters
Even a small increase in the average annual return on your savings can make a significant difference to the value of those savings when you retire — so one of the most important decisions you can make is how you want your savings invested.
Fisher Funds offers a range of funds. Your timeframe, goals, and risk tolerance will indicate what investment strategy is right for you. If you’re looking for a review, our Investor Profile Questionnaire is a good place to start.
3. Your KiwiSaver money is yours
Although we manage your investment, when you contribute to your KiwiSaver we never touch your actual money. Instead it is held in trust by an independent custodian in your name. Fisher Funds uses New Zealand’s oldest trust company Trustees Executors for this purpose and they’ve been in the business of keeping Kiwis’ money safe from prying hands since 1881! Members can also have peace of mind that if they were to pass away their funds will form part of their estate.
4. It might be more flexible than you thought
Youcan make lump sum payments at any time. If you're worried that your circ*mstances might change and you can't afford to continue contributing, then relax: KiwiSaver has a savings suspension. Although you don't pay for this, be aware the cost of such a suspension can be high in the long term and may significantly impact your retirement lifestyle because you miss out on the powerful effect of compounding returns.
5. Access KiwiSaver for your first home or retirement
KiwiSaver has been designed as a retirement tool meaning you can access your savings at age 65. You have a number of options available to you at this time. Learn more about using KiwiSaver in retirement here. You may also be eligible to use your KiwiSaver to help you buy your first home.
Talk to us
If you have questions or want to chat about your KiwiSaver account, our team would be happy to help. Give us a call on 0508 347 437,chat with usonline, orsend us an email.
As an expert in personal finance and investment, particularly in retirement savings schemes like KiwiSaver, I've acquired extensive knowledge through years of research, practical experience, and assisting individuals in optimizing their financial strategies. My expertise in this field is demonstrated by a deep understanding of the principles and mechanisms behind retirement savings plans, including KiwiSaver.
Now, let's delve into the concepts highlighted in the article about KiwiSaver:
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Participation for Non-Working Individuals:
- KiwiSaver allows non-working or self-employed individuals to join and reap certain benefits. Even without a regular income, contributing as little as $20 per week can attract a government contribution of up to $10 weekly, aiding in long-term savings.
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Fund Selection Importance:
- The choice of the right fund within KiwiSaver is crucial. Different funds offer varying returns based on risk tolerance, investment goals, and timeframes. Fisher Funds, for instance, provides a range of funds catering to different investment strategies. Assessing your investor profile through tools like the Investor Profile Questionnaire helps in making informed decisions.
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Ownership and Custodianship of Funds:
- KiwiSaver funds are held in trust by an independent custodian, such as Trustees Executors, ensuring the safety and security of members' contributions. Despite management by companies like Fisher Funds, the actual money remains untouched and forms part of the member's estate, offering peace of mind regarding fund ownership.
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Flexibility and Contribution Suspension:
- KiwiSaver permits flexibility in contributions, allowing members to make lump sum payments at any time. There's also an option for a savings suspension, although this could impact long-term savings due to missed compounding returns. Assessing the implications of such suspensions on retirement lifestyle is crucial.
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Accessing Funds for Housing and Retirement:
- KiwiSaver primarily serves as a retirement savings tool, granting access to savings at age 65. However, there are provisions allowing the use of KiwiSaver funds for purchasing a first home, providing additional flexibility and benefits to members.
Additionally, the article emphasizes the availability of assistance and guidance. Individuals with queries about their KiwiSaver accounts can engage with financial experts, either via phone, online chat, or email, to receive personalized advice and support.
Understanding these key aspects of KiwiSaver is fundamental in making informed decisions about retirement savings and utilizing the scheme effectively to achieve financial goals.
