KIWISAVER TIPS

USINGKIWISAVERWISELY

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Peyper from the Financial Markets Authority. And there’s a very good reason to do that if you can.WHAT MAKES The government tops your contributions up by 50 KIWISAVER A cents for every dollar you put in, up to a maximum of $1024.86 each year. That’s less than $20 a week GOOD DEAL says Peyper. In return, you get $521.43 added into your KiwiSaver for free by the government. The latest

IS THE KiwiSaver annual report showed the highest amount of lump-sum contributions to KiwiSaver, up 20 per FREE MONEY cent to $2.2 billion for the year to March 2022. Even if you can’t contribute the full $1024, you still THAT COMES get a 50 cent top-up for every dollar you invest up

WITH IT. to that sum. It doesn’t matter if you drip feed your money to you KiwiSaver provider every week or pay a lump sum once a year. Contact your KiwiSaver provider to find out how to set-up extra regular payments. Or you can also make a one-off payment via online banking by choosing the IRD payment option and then “KiwiSaver member account” as your payee type. The money will be forwarded to your KiwiSaver account.

You’re never too poor for KiwiSaver. Even students working part-time will benefit from saving tiny sums of money in KiwiSaver. A few dollars a week drip-fed into KiwiSaver now will add up to many thousands of dollars far quicker than you think, thanks to investment growth and free top-ups from employers and the government. The thing about KiwiSaver is you only have to put away a minimum of three per cent of what you’re earning. So, if you earn $100 in the week it’s just $3, which is less than one single energy drink or coffee. You won’t even notice that if it’s transferred to KiwiSaver automatically by your employer before you receive your pay in the bank. You probably don’t think about yourself in 10, 20 or 30 years’ time. If you start saving that small percentage from your very first pay packet, you’ll thank yourself big time in a decade when, believe it or not, you might start to think about buying a house. It happens. By then, you’ll have a good chunk of a deposit saved without much effort. The other reason to start early is that you get into a good habit. If you learn to put money aside before spending, you will find it easy. What makes KiwiSaver a good deal is the free money that comes with it. From the age of 18, your employer has to double your three per cent contribution. But do be careful as some employers don’t always play by the rules. If you’re on minimum wage in particular, they must pay their three per cent over and above your wage. You can make additional voluntary contributions direct to your KiwiSaver provider any time says Tammy

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If you get to the stage where you want to buy a home, which thousands of New Zealanders in their twenties do, there’s more free money. After five years saving in KiwiSaver you can withdraw your savings, your employer’s contribution and the investment growth to buy your first home. If you’ve been putting at least three per cent in for that time, you’ll most likely also qualify for the $5000 HomeStart grant for a first home (or $10,000 for a brand-new home). If you can, even in these inflationary times, then every extra bit of your wages or salary you save equals more to spend on your first home or tens of thousands of dollars later in retirement says Peyper. The very best advice is to look for excuses to invest that tiny three per cent into KiwiSaver each week, rather than saying “I can’t”. Your future self will be grateful in the not-too-distant future. For more information on KiwiSaver and how it works, visit www.sorted.org.nz

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