Is Your KiwiSaver Pulling Its Weight?
Right. Let’s talk KiwiSaver - that little pot of money quietly building in the background that could one day be your golden ticket… or a bit of a fizzler if you’re not paying attention.
The truth is, a lot of Kiwis are leaving money on the table because they’re stuck in the wrong fund or just don’t realise they’ve got options. KiwiSaver isn’t set-and-forget. It’s your money. Let’s make sure it’s pulling its weight.
FIRST UP — WHAT ARE YOUR OPTIONS?
Not all KiwiSaver funds are the same. Some are calm and cautious, others are all gas, no brakes. Which one’s right for you depends on your goals and how long you’ve got.
TYPES OF KIWISAVER FUNDS:
Conservative Funds: Low risk, low return. Good if you’re close to retirement or need the cash soon. Not great if you’re 35 and planning to work for another 30 years.
Balanced Funds: A bit of everything. Middle of the road.
Growth/Aggressive Funds: Higher risk, but higher potential returns. These funds are ideal for long-term growth (and for people who don’t freak out every time the market sneezes).
Self-Select: Want to pick your own investments? Some providers let you do that. You’ll need to be a bit more hands-on, though — it’s not for the ‘set-and-forget’ crowd.
STILL IN A DEFAULT FUND? THAT COULD BE COSTING YOU BIG TIME
Let’s call it what it is – default KiwiSaver funds are a quiet killer of potential returns. Default funds are where you land if you never made a choice. They’re conservative by design, which may sound safe - but for most people (especially younger ones) that’s not where your money should be sitting.
You wouldn’t leave your car in neutral and expect it to go uphill. Same deal here.
FEES MATTER
There’s a big fuss over fund fees - and fair enough. High KiwiSaver fees can eat into your returns like seagulls into chips. But cheaper isn’t always better.
Here’s the breakdown:
Low-Fee Funds: Think index funds. They follow the market, don’t try to beat it, and usually keep more money in your pocket. Great if you’re happy to ride the ups and downs.
High-Fee Funds: Actively managed. You’re paying for smart people to (hopefully) beat the market. But some don’t. So if you're paying more, make damn sure you're getting something for it.
A quick test for you:
Has your fund consistently outperformed the low-fee funds?
Do you know what you're paying in fees?
Is your KiwiSaver provider even communicating with you?
If you answered “I don’t know” to any of these questions, it’s time to dig in.
WANT MORE IN YOUR KIWISAVER? HERE’S HOW TO GET IT
Check your fund: Are you in the right one for your goals and timeframe? Or are you still sitting in the default corner?
Up your contributions: Even an extra 1% can make a hell of a difference over time. Future you will thank you!
Snag the free money: The government chips in up to $521 a year - but only if you put in $1,042 or more. Miss that, and you’re leaving free cash on the table.
Employer match: If you’re working, your boss has to put in at least 3% into your KiwiSaver. Make sure that’s happening.
Talk to someone who knows their sh*t: This doesn’t need to be complicated — and getting the right advice from a qualified financial advisor (like me!) could literally add tens of thousands to your retirement pot.
FINAL THOUGHTS
KiwiSaver should be working for you, not just sitting there collecting dust. Whether you're hands-off, or love getting into the weeds of investment strategy, the main thing is being informed and intentional with your KiwiSaver.
Not sure whether your KiwiSaver fund’s right, or whether you’re getting value for what you’re paying? I’m a member of the New Zealand Institute of Financial Advisors and I hold their highest globally-recognised designation available - so I can help you figure it out. No jargon, no judgement, just straight-up advice so you can get more bang for your buck.
Let’s make your KiwiSaver work as hard as you do. Flick me a message and I’ll help you sort it!
Our blog is not intended to be taken as personal advice and is for informational purposes only.
Before acting on this information, contact our mortgage broker/financial advisor to ensure it is suitable for your circumstances.