5 expert KiwiSaver savings tips for 2023
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Ready to step up your KiwiSaver savings in 2023?
Even if you’ve been contributing to your KiwiSaver account for some time now, it’s a good idea to review your account settings from time to time, to make sure everything is still best set up for your situation.
We recommend doing these check-ups annually, or sooner if your employment situation or savings goals change. A few tweaks to your KiwiSaver account now could make a huge difference to your savings in the long-term.
Take a look at our five expert KiwiSaver savings tips below to get started:
1. Consider increasing your KiwiSaver contribution
As a KiwiSaver member, you have the option of contributing 3%, 4%, 6%, 8% or 10% of your income to your KiwiSaver account. While the difference between these contribution rates isn’t much, increasing your contribution by just 2 or 3% could make a HUGE difference to your savings over the long-term.
For example, a 30-year-old earning $60,000 a year who changes from a 3% contribution to a 4% contribution, means they’ll save an extra $40 per week. But at retirement, that extra saving could add up to nearly $50,000 extra in their bank account – and that’s using very conservative assumptions* (see below).
To see how much more you could save for retirement if you increased your KiwiSaver contribution rate, use our KiwiSaver calculator.
2. Check that your KiwiSaver fund type suits your goals
If the goal of your KiwiSaver account is to save for a comfortable retirement, and that’s still at least 10 years away, a fund focused on growth is probably a good option for you. At Generate we have two fund options in this category, our Growth Fund and our Focused Growth fund. These funds have the potential to earn more over the long-term, but they could experience more up’s and down’s along the way, which is why they’re generally recommended for those with a long-term savings goal, rather than someone who plans to withdraw their money soon.
If you do intend to use your KiwiSaver savings soon – perhaps for your first house or if you’ll reach retirement in the next few years, then our Conservative or Defensive Funds could be more appropriate, as these funds are generally more stable in the short-term.
Depending on your savings goals and investment timeframe, it might be worth changing your current KiwiSaver fund type. However, we recommend talking to a KiwiSaver adviser before changing your fund type, as in some situations there are good reasons not to change your fund type.
To talk to a Generate KiwiSaver Adviser, call us on 0800 855 322.
3. Make sure you don’t miss out on the extra $500 from the government!
Every year KiwiSaver account owners between 18 and 65 years can get an extra $521.43 from the government. To be eligible, you need to make sure you contribute at least $1,042.86 to your KiwiSaver account between July 1 and June 30 every year. Log in to your Generate account to see how much you’ve contributed this year and make sure you’re on track!
Find out more about the Government KiwiSaver Contribution
4. Consider making extra KiwiSaver contributions
While we know times are tough, if you really want to step up your KiwiSaver savings, you could consider making extra deposits. These can be made at any time and at no additional cost.
This is an easy way to invest in international and local stock markets, without having to worry about finding a broker, paying additional account fees, or trying to pick the right stocks. At Generate your money is actively managed by our team of investment professionals, who monitor the markets daily.
5. Don’t underestimate the value of advice!
Research shows financial advice adds long-term value to your savings.
More than two thirds of advised New Zealanders say that advice has led to outcomes such as a better understanding of the risks of their financial plan (77%), a better understanding of how to achieve their financial goals (74%), and they are better equipped to actually stick to these financial plans (70%)^.
Our KiwiSaver advisers take pride in providing simple, straightforward KiwiSaver advice to help Kiwis make smart investment choices. We have advisers right across the country available to help you with your KiwiSaver savings goals - get in touch to talk with one today.
BONUS TIP: Want to save more? Consider investing in a Managed Fund
Managed Funds work in a similar way to KiwiSaver funds, but you control how much and how often you want to invest and when you want to withdraw your funds.
Generate Managed Funds are a good option for Kiwis who want a professionally managed investment portfolio, as our team of expert fund managers actively manage your investment, making all the tough decisions about when, where and what to invest in.
Typically Managed Funds will grow faster than savings accounts and term deposits over the long-term, however it’s important to remember that investments can go up and down in value from month to month. This is a normal part of investing and the higher the weighting to growth assets, the higher the volatility.
Find out more about Generate Managed Funds.
Got questions or want to talk to a Generate KiwiSaver Adviser about your account?
Contact us on 0800 855 322 or email us at info@generatekiwisaver.co.nz.
Assumption: Based on a 25-year-old with an existing balance of $10,000 in an Aggressive Growth Fund earning an annual salary of $60,000, whose employer contributes a further 3%. View the calculator and assumptions here: www.generatewealth.co.nz/surveycalculator.
^Source: https://financialadvice.nz/wp-content/uploads/2022/02/2021-Research-Report-Better-Behaviours-FINAL-with-cover-16-Dec-1.pdf