So you’re in KiwiSaver but not contributing (or only a little bit)? Here’s some advice.
It can be easy to let your savings slip, especially when things get tight, but here’s why it’s so important to get back on the KiwiSaver wagon. We’re here to impart our KiwiSaver advice to get you back on track!
Here are 3 solid reasons to contribute to your KiwiSaver:
- The earlier you start, and the more you contribute, the more your fund will grow (and grow, and grow). Think about it like planting a tree along your fence-line. If you plant it today, it’s going to grow for you tomorrow. But if you wait until next year to plant it, you’ll have missed that whole year of growth. Investments grow because the money compounds on top of itself. Each time you earn returns on your money, your balance grows. The next month when your returns are calculated again, you’ll have an even bigger pot to earn more returns on. And so on, and so on. It’s called compounding returns, and it’s why investments like KiwiSaver can grow so rapidly.
- The government gives you 50c for every dollar you contribute! (they’ll put in up to $521.43/year). That’s a 50% return on your money – you won’t get that anywhere else, and coupled with compounding returns it’s a no brainer!
- The “future you” is going to thank you from the bottom of your heart. Saving might not do much for you right now, but it will be the difference between retiring and barely scraping by (perhaps working well into your 70’s if you still can by then), and being able to afford those few little luxuries you enjoy now. One of our older clients recently put it like this:
“A few of life’s calamities has seen me age 75 living off national super. I just manage! My advice to my 20-year-old self: join a super scheme and stick with it no matter what!” – Lorraine, Palmerston North
It’s hard to argue with an argument as compelling as that, right? All that’s left now is to get back on the wagon.
Here’s how to get contributing to KiwiSaver again:
> Fill in a KS2 form from the IRD and give it to your employer (or ask your employer to get the form for you). These forms are nice and easy to fill in.
> You can make payments at any time through your internet banking. All you have to do is go to the Payments section and add a Payee. You can usually select your Scheme from the list of registered organisations (failing that, see your provider or talk to us for help).
A tip: to receive the maximum Member Tax Credit of $521.43 each year, you’ll need to contribute $20.06 per week (but if you can afford to pay more, we absolutely recommend you do).
So get back on that wagon!
We hope this information helps you to start reaping the benefits of KiwiSaver and create the building blocks for your retirement. Remember, the sooner you start, and the more you put in, the greater your returns will be.
We always recommend talking to your Adviser about your retirement plans to equip you with practical solutions and ideas specific to your situation. Just knowing you are on the right path will be a weight off your mind.
Need help? Ask a KiwiSaver Adviser.
Providing top notch KiwiSaver advice – at no cost to you – is something we love to help with.
For a helpful chat about your retirement plans, send us an enquiry today and we’ll be happy to assist!
Is KiwiSaver in Your Too-Hard Basket?
If you’re neglecting your KiwiSaver, you could be throwing money away! Check out some of our KiwiSaver articles below, or contact an Adviser to learn more. Trust us, it will be worth your time.
Photo by Towfiqu barbhuiya on Unsplash
