Most people have not given enough thought to their KiwiSaver and yet it should grow over time to be a substantial investment.
You will want your KiwiSaver balance to grow into a large fund as this is going to help fund your lifestyle in retirement.
Too Many Kiwi’s Do Nothing
If you do nothing then you are likely to be placed into a “default scheme” which use a very conservative investment strategy, and therefore the returns are generally low but positive. These default scheme’s are producing low returns when compared to other options available to you and therefore your KiwiSaver retirement plan will grow more slowly than it otherwise would.
Morningstar produce a quarterly report on KiwiSaver which provides economic commentary and fund performance.
A snapshot from the latest report as at 31st March 2019 shows;
- There are 16 KiwiSaver providers with a total of 154 investment options.
- The six largest KiwiSaver providers account for approximately 81% of the total invested but this does not mean any of those providers deserve the business based on performance, rather they have received the business by being a default provider or from being a bank that has a captured audience.
- The current market size (investment) as at 31st March 2019 was NZD$54.6 billion up from NZD$50.2 billion 3-months earlier on 31st December 2018.
- All of the KiwiSaver funds made positive returns during the last quarter. The Aggressive category average recorded 7.9% for the year, followed by Growth (7.7%), Balanced (6.5%), Moderate
(6.0%), and Conservative (5.0%). There is as always a huge variance in the investment returns between the various funds.
Get Advice On KiwiSaver
There are many places to get advice on your KiwiSaver.
You may have heard about the website Sorted.
Sorted is a free service powered by CFFC (Commission for Financial Capability), the government-funded, independent agency dedicated to helping New Zealanders get ahead financially. This is a website that focuses on financial education and is operated by CFFC rather than a bank or investment provider. Sorted has a range of tools and information aimed to help you to tackle debt, plan and budget, save and invest, information on KiwiSaver, some tools and tips to help plan for retirement, information about protecting what’s important, and even some tools and tips to help manage your mortgage.
One of the best tools is the KiwiSaver savings calculator.
Go ahead and see how much your KiwiSaver will help and if you should invest more. Its always worth considering how much you invest in your KiwiSaver as there are other investment options available to you which leave you with the ability to access those investments if needed, whereas KiwiSaver is locked in.
Talk To Your Adviser About KiwiSaver
At North West Mortgages our advisers provide class advice on KiwiSaver and can explain why this is a good retirement savings option and how KiwiSaver works. There is not currently any compulsion to contribute to KiwiSaver but with NZ Super providing just a minimal retirement income.
You should make it a priority to discuss KiwiSaver with us.
Of course you can contact an adviser who can help you get your KiwiSaver sorted out too.