How to Adult: KiwiSaver tips (for anyone new to it)

Fancy yourself as someone who might retire early? Want to do it better than your parents did perhaps? Or maybe you see yourself owning a home as soon as possible?

All of these things are achievable if you make the right moves now, and KiwiSaver can help you get there. If you’re just starting out in the working world, you’ve got an exciting opportunity to get ahead from the get go.

Youth Empowerment KiwiSaver Advice

But there’s no doubt the whole system can seem confusing, and let’s face it, this “adulting” business takes some effort (sigh). But wait, before you despair!

To make things super easy for you, we’ve got the basic KiwiSaver need-to-knows right here.

What even is KiwiSaver?

KiwiSaver is a simple and affordable way to save for retirement. Your employer and the Government contribute, you’ll earn investment returns, and you can withdraw your money to buy a first home. In general though the money is locked away until you retire, to remove the temptation of spending it.

How do I join?

Through your financial adviser (that’s us), your employer, or directly through the provider. You’ll get to choose which provider you sign up with (or else you’ll be signed up to a default one). When setting up your KiwiSaver account it’s worth getting advice that’s impartial from the banks – and guess what, we can offer KiwiSaver advice at no cost to you!

What fund should I be in?

Excellent question, well done you! Short answer – it all depends on how much risk you are prepared to take with your money.

If you’re young then often you can afford to take calculated risks for long-term gain. An Adviser can help you figure out what feels right for you, and make a switch if you want to. You can also compare the different funds, their fees and see where and how they invest your money.

Socially responsible funds (that avoid investments in guns and oil for instance) are available too.

Can I withdraw my KiwiSaver money to buy a house?

Once you’ve been contributing to KiwiSaver for at least 3 years you may be able to withdraw some or all of your savings to use for your first home deposit.

When you’re ready to buy your first home a mortgage adviser can help you to apply for a KiwiSaver first home withdrawal, or you can do this direct with the provider.

We recommend talking to an Adviser at least a year before you’re planning to buy a house, so that you can make the right adjustments to your fund and optimise your savings to your best advantage. Again, we can provide this KiwiSaver advice at no cost to you (wow, what an amazing service!).

What is a member tax credit?

OK. The Government matches your contributions with 50c for every dollar you put in, up to a maximum of $521 each year.

So you have to put in $1042 each year to get the maximum member tax credit (that’s about $20 per week).

If you put in less than $1042 though, you’ll still get 50c in every dollar you have managed to put in, so it’s still well worth it.

Got it? If not, contact us and we’ll be happy to explain.

When can I withdraw my money?

There are three scenarios:

  1. Once you reach the NZ Superannuation age (that’s currently 65, but will be going up to age 67 by 2040).
  2. The only cases you can get it out any earlier are for a first home deposit, if you suffer a serious illness or financial hardship.
  3. Your KiwiSaver money also goes to the beneficiaries of your estate if you die, regardless of your age. Setting up a Will enables you to decide who gets it. That’s a cheery thought!

Could you use an Adviser?

It might sound like something reserved for the financial elite, but we believe financial advice should be made simple and accessible for all – we’ve all gotta start somewhere!

If you choose to become a client, our KiwiSaver advice comes at no cost to you and includes:

  • handy reminders (by email or phone) each year when it’s time to review things
  • personal service, relevant to your stage in life, from a dedicated KiwiSaver expert
  • help with completing paperwork and understanding anything KiwiSaver

To ask any questions or find out more, email our KiwiSaver advisers or phone us on 06 870 7050. Happy saving!

Photo credit: Ryan Tauss, Unsplash

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