Are you prepared for your retirement? If you have made no plans other than living off of New Zealand’s Superannuation, you may not be able to maintain your current lifestyle that you are accustomed to.

KiwiSaver is an easy and affordable way to save for retirement. KiwiSaver is a voluntary based savings scheme set up by the NZ Government to help      New Zealanders save for their retirement. You can choose to contribute 3%, 4%, 6%, 8% or 10% of your gross (before tax) income to your KiwiSaver account. Your employer must contribute as well, matching at least 3% of your gross income.

Your funds are invested on your behalf by the KiwiSaver provider of your choice. If you don’t choose a provider, Inland Revenue will assign you one of the nine default KiwiSaver schemes, which could prove a disadvantage to you, when it comes to maximising your return on investment.

There are three ways to join KiwiSaver:

  • Automatic enrolment when you start a new job.
  • Opting in through your employer.
  • Opting in through a KiwiSaver adviser or provider.

If you are self-employed or not currently working, contact your Wright Financial KiwiSaver adviser or your chosen provider, in order to sign-up and arrange a regular contribution amount.

The question isn’t “why” you should sign-up for KiwiSaver, it is “why not” because of the benefits it offers.

  • If employed, your employer has to contribute at least 3% of your gross income into your KiwiSaver account. That’s on top of your own contributions.
  • Your KiwiSaver contributions come out of your pay before you see it. This makes saving easy.
  • The government pays into your KiwiSaver account as well as in the form of annual ‘member tax credits’ (if you are a contributing member aged 18 or over) of up to $521.00.
  • As well as saving for retirement, you can also use KiwiSaver for buying your first home through a KiwiSaver HomeStart grant.
  • If you change jobs or leave the workforce your KiwiSaver account moves with you.

If you experience hardship it is possible to access the funds in your account.

KiwiSaver is not compulsory yet. But, if you’re 18 or over and start a new job you’ll be automatically enrolled in KiwiSaver (with some exceptions). And that is a good thing!

  • If you are automatically enrolled you can ‘opt out’ (leave KiwiSaver), but only between 2 and 8 weeks of starting the job. Once you join, you have to contribute for at least 12 months (If you’re 18 or younger and have been incorrectly enrolled, you can still opt out through Inland Revenue).
  • You can choose to ‘opt in’ (join KiwiSaver) at any time – either through your employer or through a KiwiSaver adviser or provider.
  • After 12 months in KiwiSaver, you are entitled to take a break from your savings contributions (called a ‘contributions holiday’).

Current legislation allows you to withdraw all KiwiSaver contributions (excluding $1,000) when buying your first home if you’ve been consistently contributing for at least three years. You may also qualify to withdraw your KiwiSaver if you have owned a property previously under the ‘Second Chance’ option.

In addition to a KiwiSaver savings withdrawal, there’s also the KiwiSaver HomeStart grant. If eligible, the government may contribute up to $5,000 (per member) towards buying an existing home, or up to $10,000 per member towards the building of a new home.

If you are using KiwiSaver to save for retirement, you can’t touch your money until you reach age 65 (currently). If you are between the ages 60 and 64 years old when you join, you cannot access the money until expiry of the five-year period from which you became a member.

Most KiwiSaver providers offer a range of investment funds. There are two key things to consider when choosing a fund. Its associated risk and return and the fees it charges.

Risk and return

The risk level of a fund is determined by the percentage invested in growth assets. These are types of investments like shares and property that have the potential for higher returns over the long-term and have a risk to decrease in value.

KiwiSaver providers generally describe their funds as being:

Type of fund      Risk profile
Defensive           Low risk
Conservative     Low to medium risk
Balanced            Medium risk
Growth               Medium to high risk
Aggressive         High risk

Our KiwiSaver Providers in order of Experience

Select Wealth Kiwisaver is new to market, with experience from Select Wealth Management who has operated for over 30 years. The Scheme is managed by Smartshares Limited (Smartshares), which is a wholly-owned subsidiary of NZX Limited (NZX). The Scheme is distributed by Select Wealth Management Limited (Select Wealth). The Scheme’s external investment manager is JMI Wealth Limited (JMI Wealth).

Russell Funds founded in 1936, with their mission statement “Improving financial security for people”.

“It is most appropriate to evaluate performance of a KiwiSaver scheme by studying its long-term returns. Aon Russell Lifepoints continues to be at or near the top of most categories”

Morning Star, June quarterly issue 2016

Morning Star - Independent research house for KiwiSavers

ANZ KiwiSaver has over 20 years’ experience helping New Zealanders manage and protect their wealth and is owned by the ANZ Bank New Zealand. Awarded NZ KiwiSaver Manager of the year in 2014.

ANZ Investments have an experienced investment team that is primarily focused on investing in Australasia. Where assets are invested overseas, they carefully select third-party investment managers to manage those assets.

Booster has been helping New Zealanders save for over 16 years. In 2010, the Booster KiwiSaver Scheme was selected as the preferred KiwiSaver scheme for Asteron KiwiSaver Scheme members to voluntarily transfer into.

In 2013 Booster acquired the Fidelity KiwiSaver Scheme, meaning Booster now managed retirement savings for more than 94,000 New Zealanders. Booster has offered a range of “ethical” investment portfolio options and as such exclude direct investments in companies where a significant component of their business derives revenue or earnings from tobacco, alcohol, gambling or armaments.

Milford Asset Management was formed in 2003 by a highly experienced group of individuals who recognised the need for an investment company that New Zealanders can trust to provide a premium service.

Milford is a boutique investment firm that provides a range of investment products and services designed to help clients meet their specific investment objectives. They seek to consistently deliver superior investment returns and high quality customer service.

“In the Multisector Conservative category, the top performers included Milford KiwiSaver Conservative Fund”

Morning Star, June quarterly issue 2016

Morning Star - Independent research house for KiwiSavers

Nikko Asset Management Nikko AM NZ’s corporate history dates back to 1881 when The New Zealand Guardian Trust Company Limited (NZGT) was founded in New Zealand. As a dedicated global investment manager in New Zealand, Nikko AM NZ is committed to providing the best of both New Zealand and the world to investors.

The Nikko AM global investment platform provides a real time connection to a network of over 20000 plus investment professionals who share proprietary ideas and perspectives.

Generate’s focus is on your retirement savings. New Zealand owned and operated, Generate’s investment decisions are made by an investment committee that has more than 90 years of combined investment expertise. Their goal is simply to help you grow your savings and achieve the lifestyle you want in retirement.

For a limited time, submit your contact details and book an appointment with one of our advisers and receive a $50 voucher on your first visit.