Preparing For Retirement With KiwiSaver


Accordingtoareportconductedrecently by the Financial Services Council, the averageNewZealandcitizen’sKiwisaver balance is just over $25,000. When one considers that property ownership is on the decline, and many of the younger generations may not possess their own home by retirement, $25,000 may not be enough to comfortably live on. 

With more than 30% contributing the minimum 3% into their Kiwisaver fund, and 17% of New Zealanders not contributing at all, working out how to boost the balance to provide for their comfortable retirement may take a lot of discussions, and a lot of their own funds. 

If you are not currently contributing to your Kiwisaver account through your salary, there are other ways that you can top up your balance. These ways can involve making voluntary contributions, bolstering the contribution rate or making one or more lumpsum contributions. 

For example, for every $1 that you (if you are 18 years or older) put into your account yourself, the government will put in 50 cents, to a maximum amount of NZ$521.43 (which is tax-free). The compounded value if you start early enough, could add up in the long run and assist you in creating a comfortable amount to retire on. 

To ensure that you aren’t paying the wrong amount of Prescribed Investor Rate (the compulsory tax to be paid on KiwiSaver), you will need to make sure that your fund is aware of the tax bracket you currently fall under. This will also help you in increasing the amount within your KiwiSaver as you won’t be paying additional tax in your fund. 

Want to know what means of contributing to your Kiwisaver might be the most appropriate for your circumstances? You can speak with us for advice and guidance, or speak with your Kiwisaver provider


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