What is KiwiSaver?

What’s the Deal with KiwiSaver?

KiwiSaver is much more than just a savings scheme—it's actually an investment scheme with loads of benefits that many people don’t even know about. Sure, it’s marketed as a way to save for retirement, but it’s designed to grow your money through investments.

Here’s a quick breakdown of how it works and why you should care:

How KiwiSaver Works

When you sign up for KiwiSaver, a small percentage of your pay (3%, 4%, 6%, 8%, or 10%) goes into your KiwiSaver account. Your employer must chip in with an additional 3% of your gross pay. On top of that, the government throws in an annual contribution of up to $521 if you meet the criteria—talk about a nice bonus!

Picking a Fund That Fits

Your KiwiSaver money is invested for you by your provider into your chosen fund. Each provider will offer a range of different funds which have varying levels of risk and return. If you don’t actively choose a fund, Inland Revenue will automatically place you into a default fund. These default funds tend to be more conservative, which might not be aligned with your long-term goals, so it’s worth talking to a KiwiSaver expert to ensure your fund is right for you​. There are five general types of funds:

• Defensive: Low risk, low returns

• Conservative: More stable, but still on the lower-risk side

• Balanced: A middle ground with moderate risk and returns

• Growth: Higher risk, higher potential returns

• Aggressive (High Growth): Higher risk, potentially the highest returns

Your choice depends on how comfortable you are with risk and what your goals are for the future. If you are unsure on what fund would suit your goals and attitude to risk, take our KiwiSaver Quiz and we will be able to provide you with a complementary KiwiSaver recommendation based on your answers.

Extra Perks of KiwiSaver

• Employer Contributions: Your employer is required to contribute 3% of your salary to your KiwiSaver account if you're contributing yourself​.

• Government Contributions: Even if you're not an employee, you can still receive up to $521 annually from the government, as long as you contribute enough​.

• First Home Withdrawal: After three years, you can use your KiwiSaver savings to help with the purchase of your first home.

• Regular Savings: It’s an easy, automatic way to grow your retirement fund over time.

Accessing Your Funds

You typically get access to your KiwiSaver funds when you turn 65, but there are exceptions. In cases of serious financial hardship, illness, or if you move overseas, you may be able to withdraw your savings earlier​. For more information please see our blog on when you can withdraw your KiwiSaver.

Why Bother?

KiwiSaver is a simple and effective way to set yourself up for retirement. With your employer’s contribution, government top-ups, and flexible investment options, it’s a no-brainer for anyone looking to build wealth and secure their financial future.

If you want to know if you’re KiwiSaver fund is both being maximised for returns and suitable for your personal situation, follow the link below to our online fact find. The fact find only takes 5 minutes to complete, and once you have finished we will provide you with a free no-obligation KiwiSaver recommendation.

Compound Wealth are based in Mount Maunganui, Tauranga and offer KiwiSaver, Investment & Retirement Financial Advice to clients all over New Zealand.