A basic snapshot about KiwiSaver
What is KiwiSaver?
KiwiSaver is a savings plan that helps you save money for your retirement. You contribute a small percentage of your income, and your employer and the government also contribute to your savings.
What are the benefits of joining KiwiSaver?
- Boost your savings: Your contributions are matched by your employer (at least 3% of your salary). The government contributes 25 cents for every dollar you put into your KiwiSaver account, up to a maximum of $260.72 per year. If you contribute less than $1,042.86, the government contribution is pro-rated. For example, if you put in $900, you’d get $225 from the government. (If you earn over $180,000 p.a, you are no longer be eligible for the Government Contribution).
- Easy saving: Contributions are automatically deducted from your pay, making it easy to save without thinking about it.
- Flexible contributions: You can choose to contribute 3%, 4%, 6%, 8%, or 10% of your salary.
- Risk profile: Your risk profile helps determine the most suitable investment strategy for you. It considers how much risk you’re comfortable with and your financial goals.
- First home purchase: You can use your KiwiSaver savings to help buy your first home after at least three years of contributions. There are specific terms and conditions, so check with your adviser.
How to join KiwiSaver
- Check your eligibility: You must be a New Zealand citizen or entitled to live in New Zealand indefinitely and normally live in New Zealand.
- Choose a KiwiSaver scheme: There are different KiwiSaver providers with various investment options. You can compare them to find one that suits your needs.
- Sign up: You can join KiwiSaver through your employer when you start a new job, or you can sign up directly with a KiwiSaver provider.
- Set your contribution rate: Decide how much of your salary you want to contribute (3%, 4%, 6%, 8%, or 10%).
- Start saving: Once you’ve enrolled, contributions will be automatically deducted from your pay and added to your KiwiSaver account.
Why you might not get the full KiwiSaver government contribution
The annual government contribution to KiwiSaver (up to $521.43) is based on how long you’ve been eligible during the year. You won’t receive the full amount if:
- You turn 16 part-way through the year
- You join KiwiSaver part-way through the year
- You stop meeting the eligibility criteria, such as reaching 65
In these cases, the contribution is calculated based on how many days you’ve been both a member and eligible between 1 July and 30 June. Even a partial contribution is worth having, so it’s smart to check your status and make sure your contributions are on track
Get in touch with RIVAL Wealth to talk to a financial adviser who can recommend the right fund for you to join. They are here to help you navigate your options and will recommend which KiwiSaver fund to join.
This information is of a general nature and is not intended as personalised financial advice. RIVAL Wealth is a Financial Advice Provider (FAP) licenced by the Financial Markets Authority to provide financial advice. Our disclosure document is located at rivalwealth.co.nz or a written copy is available on request
