Getting started with KiwiSaver (and making the most of it)

Thinking of joining KiwiSaver but not sure how it works? KiwiSaver is a powerful way to save for the future—whether that’s retirement, a first-home deposit, or both. Here’s a simple guide to help you make the most of it.

How to join KiwiSaver

One of the best features of KiwiSaver is that you’re not saving alone —contributions come from multiple sources, helping you build your savings faster:

Your contributions: Once you’re enrolled, a portion of your salary is automatically deducted and invested in your KiwiSaver account. You can choose to contribute 3%, 4%, 6%, 8%, or 10% of your income. You can also make extra one-off contributions if you’d like to boost your savings. If you’re self-employed, you can contribute directly by setting up payments with your provider. This can be a regular amount or occasional deposits—whatever suits you.
Employer contributions: As a KiwiSaver member and employee, your employer is required to add an extra 3% of your salary or wages to your KiwiSaver account. Some employers may even choose to contribute more, but 3% is the legal minimum required.
Government contributions: To further boost your savings, the government contributes 50 cents for every dollar you put in, up to a maximum of $521.43 each year. To receive the full government contribution, you’ll need to contribute at least $1,042.86 between 1 July and 30 June. Even if you don’t reach this target, you’ll still receive 50 cents for every dollar you contribute, starting from the first dollar.

With a little extra help along the way, your KiwiSaver account can grow faster, giving you a solid foundation for the future.

Choosing the right KiwiSaver fund for you

Not all KiwiSaver funds are created equal. They come in five types, from defensive funds (lowest-risk, lowest likely returns) through to conservative funds, balanced funds, growth funds, and aggressive funds (highest-risk, highest expected long-term returns).

When you’re automatically enrolled in KiwiSaver, you’re initially placed in a “default” balanced fund. This fund type aims to balance growth with lower risk, but it may not be the best fit for everyone.

That’s why it’s important to make an active choice of fund, and here are a few tips to find the right KiwiSaver fund for you:

Consider your timeframe (or investment horizon) – How long before you’ll need to access your KiwiSaver funds? If retirement or a first-home purchase is far off, you may consider taking on a higher risk. If your timeline is shorter, a conservative fund might be a safer choice, protecting your savings from market swings. These are just examples, which may not reflect your unique situation.
Assess your comfort with risk – Think about how comfortable you are with market fluctuations. If you prefer stability and want to avoid large dips in value (as much as possible), a conservative or balanced fund might suit you. If you’re open to higher risk for potentially greater returns, a growth fund could be the right fit. Understanding how your KiwiSaver funds are invested can help you understand the risks. Our financial advisers can help you understand the risks.
Compare performance after fees – The Schemes with the lowest fees don’t necessarily have the best performance after fees. Indeed, some of the funds with the best performance after fees do have higher charges, as evidenced by the quarterly Morningstar KiwiSaver survey. While past performance does not guarantee future performance, it does provide some insight into KiwiSaver fund managers’ capabilities. In fact, the main determinant of your returns is ensuring you are in an appropriate fund, rather than selecting a particular provider.

We see our role as helping to ensure that our clients are in an appropriate fund, help them understand their KiwiSaver fund and the assets they are invested in, and to provide oversight of their KiwiSaver provider and their capabilities. We have several KiwiSaver clients who we are helping manage their savings during retirement.

Importantly, we are also here to answer any questions you may have. Choosing a fund that aligns with your financial situation can make a big difference. Not sure where to start? Reach out to your Invest Link adviser for guidance. We can help you assess your options and find a fund that fits your situation.

The key thing is to start

Remember, the sooner you start, the more your savings benefit from compounding, where your returns are reinvested to generate even more returns. Even small, regular contributions add up, especially when combined with employer and Government contributions.

And don’t forget you’re in it for the long haul—so patience and consistency are essential.

Get in touch: we’re here to help

Ready to make the most of your KiwiSaver? Contact your Invest Link adviser to explore your options. We can help you select the right fund, maximise your contributions, and build a KiwiSaver plan that aligns with your financial goals. Let’s work together to make KiwiSaver a key part of your future strategy.

Disclaimer: The information provided in this article is intended for general informational purposes only and does not constitute financial advice. Every individual’s financial situation is unique, and financial decisions should be made based on your specific circumstances and goals. We recommend consulting with a qualified financial adviser before making any investment, insurance, or mortgage-related decisions. Mortgage Link, Insurance Link, Invest Link, and FG Link are part of the Link Financial Group, offering tailored advice and services to help you achieve your financial goals.