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Should you increase your KiwiSaver contribution rate?

With some recent changes to KiwiSaver, two new optional contribution rates have been introduced providing KiwiSaver members with greater flexibility. But is an increase in your contribution amount the right option for you?

When deciding whether to increase your contribution, it’s important to look at the big picture. Here are a couple of key things to consider.

What plans do you have for retirement?

If you’re planning on a comfortable, rather than frugal retirement – well, the more money you put away, the more likely you are to achieve that. Remember, it’s not just about your additional contributions – it’s the returns on your contributions that make a big difference to the amount of money you have at retirement.

If KiwiSaver is your sole, or at least primary, retirement fund, increasing your contributions may increase your chances of having the retirement of your dreams.

How close are you to being able to access your money?

Apart from withdrawing for your first-home purchase, generally your KiwiSaver funds are locked away until the age of Superannuation entitlement (with some other exceptions). So, if you are close to either one of those access points, increasing your savings contribution rate can give you the benefit of more money for your intended purpose, without the risks of having a long ‘locked-in period.’

And, if you want to use your KiwiSaver for your first-home deposit, increasing your contributions means you either have more of a deposit, or you could be in your own home sooner than you had planned.

Please get in touch with us if you’re planning to step onto the property ladder.

Every little bit counts

KiwiSaver was developed primarily as a way for New Zealanders to actively save for their retirement and has been a major contributor in increasing the wealth of KiwiSaver members. Increasing your payments by even a little bit, can end up making a difference of thousands of dollars when you need the money.

If you’d like to know more about your options to increase your contributions, talk to us. We’re happy to help.


Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek financial advice.

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