Things to know about KiwiSaver and is it worth joining?

We have all heard of KiwiSaver. It is a savings scheme set up in New Zealand. The primary goal is to support Kiwis’ retirement, but there there are other benefits too. If you’re starting a new job soon you may be wondering — should I join KiwiSaver?

What is KiwiSaver all about?

KiwiSaver is a work-based savings initiative designed to help with saving. It is simple and hassle-free and can support long term financial goals. It can be used to purchase your first home (one time only) or long term savings for retirement. Finally, it is voluntary which means you don’t have to join. However there are several benefits that make KiwiSaver worth joining.

7 Benefits to joining KiwiSaver

• Regular contributions from your pay at work
• Regular contributions from your employer, meaning you get more from your employer
• NZ Government pays an annual member tax credit. Treat this like a bonus. If you put in a minimum amount each year you will recieve and credit.
• You can use your KiwiSaver as deposit for buying first home (eligibility applies)
• Contributions come out of your pay before you receive it, which makes saving easier!
• You can sometimes access your KiwiSaver in situations of financial hardship or in some cases terminal illness.
• If you change jobs your KiwiSaver comes with you. This can be good time to review your payments and what it is being invested in.

Where does the money go?

A small percentage of your income that you choose of 3, 4 or 8% is deducted from your earnings. Your employer also contributes a minimum of 3%. These funds are then added to your KiwiSaver investment. The KiwiSaver schemes are managed by companies called KiwiSaver providers. The great thing is you have a choice on which provider you invest your funds with and how much risk you are prepared to take with your investment.

If self-employed or not working, you can manually make payments to your KiwiSaver. Many providers allow you to do this via your online banking. Making it simple to top up and meet bonus amounts or goal for saving!

It is important to receive qualified advice from authorised financial advisors (AFAs). Many KiwiSaver providers offer access to an AFA for free.

While KiwiSaver was a Government started initative it is not backed or guaranteed by Government.