KiwiSaver can also come in handy before you retire. You can access your savings to purchase a first home, or if you need the funds because of financial hardship. KiwiSaver savings build up over time. Contributions are paid to your KiwiSaver fund by you, your employer, and the government.
These contributions are invested by your provider in your chosen scheme. Your provider charges fees, and you pay tax on your investments, but, over the years, you should make long-term gains.
Most New Zealanders under the age of 65 are eligible to join KiwiSaver — even children! You can also join KiwiSaver if you are self-employed or unemployed. KiwiSaver membership is voluntary. Children are not eligible for government contributions until they turn You make contributions to your KiwiSaver fund from your gross pay before tax.
You can also make additional contributions. The Government makes an annual contribution to your fund, as long as you have made a contribution during that financial year.
This is called a member tax credit. The Government only contributes member tax credits to adult KiwiSaver members aged 18 or older. Providers let you manage and access information on your KiwiSaver savings online or through phone apps. Most people are eligible to access the retirement savings in their KiwiSaver fund when they turn 65, which is the age that you qualify for NZ Super.
If you join KiwiSaver after you turn 60, you have to wait a minimum of 5 years before you can access your savings.
Alternatively, you may be able to make an early withdrawal of part or all of your savings when you:. What are the common types of KiwiSaver investments? There are several main types of KiwiSaver investments, from low risk low volatility to the high risk.
Determining which type of KiwiSaver investment is right for you will, in part, be determined by your appetite for risk, and the number of years until retirement. For example, someone who is about to retire will not want their retirement fund suddenly dropping in value just before they need to make a withdrawal. On the other hand, short-term volatility may not worry someone who still has 20 years in the workforce.
If choosing specific KiwiSaver investments sounds too complicated, you might consider a life stages fund. This is a KiwiSaver fund that automatically adjusts your investment risk according to your age as you grow older.
Not all scheme providers offer all types of investment mix, so you should always check the options with your chosen provider. How do you join KiwiSaver? KiwiSaver schemes are run by providers including banks and investment or superannuation companies. The government does not guarantee the success of any savings investment scheme, so you are responsible for the provider and investment options you choose. Each provider has several investment options or funds.
Each fund has a different mix of assets, such as fixed-interest bank deposits, bonds, shares and property. Which KiwiSaver fund is the right one for you? You should choose an investment option that suits your preferred risk profile and the time frame within which you want to get a return and access your money. Here are some other things to think about:. Returns: The whole point of KiwiSaver is to build your savings by giving you some return on your investment.
Look for a consistent, long-term return, with a few riskier options added to the mix. When Canstar looks at the return from scheme providers, we review their performance over the past five years, and consistently under-performing schemes never receive higher than a 3 Star rating.
Fees: Minimising fees will maximise the balance of your fund. You should note that providers can charge fees as a dollar amount, or a percentage of your balance, and usually both. Investment options: Your investment expectations will change as you get older. Look for flexibility to switch between funds or build your own personalised fund that suits your goals. Financial advice: Professional financial advice takes away the stress of planning for your future and helps you make wiser investment decisions to reach your goals.
Educational tools: It can be hard to understand exactly how your scheme provider manages your fund. Look for a provider that offers educational information and tools. Online access and mobile apps: Many providers offer online access and mobile apps that let you access up-to-date information about your investments and make changes to your investment profile. You should choose a Kiwisaver fund carefully, because small differences in net return the return you receive after fees are deducted can make a big difference to your retirement nest egg over the course of your working life.
Importantly, the calculations above are showing the calculated return after fees have been removed. Nevertheless, they are a good example of the cumulative difference that changes in net returns can have over time.
Currently default schemes are conservative. However from June , new default KiwiSaver accounts will be place into balanced funds. What is the periodic disclosure statement? By law, the managers of KiwiSaver schemes must complete annual and quarterly disclosure statements for each KiwiSaver fund. It is unlikely savings in this fund will go down, but they will only go up slowly Long-term returns are likely to be the lowest of all the funds in the Westpac KiwiSaver Scheme.
Recommended minimum investment timeframe None. Fees and charges Annual fund charge 0. Risk indicator 1. Defensive Conservative fund. Recommended minimum investment timeframe 3 Years. Conservative fund. Moderate fund. Target investment mix View fund update Investment objective and overview Aims to provide moderate level returns over the medium term Has a higher benchmark allocation to income assets than to growth assets Volatility is expected to be higher than the Conservative Fund but lower than the Balanced Fund Returns will vary and may be low or negative at times.
Recommended minimum investment timeframe 5 Years. Balanced fund. Target investment mix View fund update Investment objective and overview Aims to provide medium level returns over the medium to long term Has a higher benchmark allocation to growth assets than to income assets Volatility is expected to be higher than the Moderate Fund but lower than the Growth Fund Returns will vary and may be low or negative at times.
Recommended minimum investment timeframe 7 Years. Growth fund. Target investment mix View fund update Investment objective and overview Aims to provide higher returns over the long term Invests primarily in growth assets but also has an allocation to income assets Volatility is expected to be the highest of the funds Returns will vary and are likely to be low or negative at times. Recommended minimum investment timeframe 10 Years.
Your fund choice. Our Investor Resources allow you to find out how your fund is performing in several ways: Our monthly fund comparison which provides basic performance data for all our KiwiSaver funds Quarterly fund updates specifically for each fund, providing data on returns, fees and investment mix A broader overview with our annual reports, which provide information about changes to our funds and their membership You can also see a list of exactly which assets each fund is invested in with our Full Portfolio Holding statements.
Applications for the first 3 close on 1 December. Find out more. Your KiwiSaver provider may offer a range of investment funds to suit your needs. The funds will have different amounts of potential risk and return. Sorted's KiwiSaver fund finder and Smart Investor platform can help you compare KiwiSaver funds and pick one that is riht for you. Sorted - KiwiSaver fund finder. Sorted - KiwiSaver which fund suits. Sorted - Smart Investor. A KiwiSaver scheme is a collection of funds to choose from.
There are a range of funds to suit your needs, for example, if you're just starting work or nearing retirement. You can choose your fund from a KiwiSaver scheme provider and switch at any time. The Financial Markets Authority regulates KiwiSaver schemes in a similar way to other registered superannuation schemes. If you have been auto enrolled by your employer, you will have been enrolled in a default scheme and we will send you the scheme's product disclosure statement a document that tells you all about the scheme, including the investments and fees.
If you enrolled directly, the provider will give you a statement.
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