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KiwiSaver: Opt in and dial up your savings

If you think KiwiSaver isn’t for you because you’re self-employed, you’re probably missing out on thousands of dollars in government contributions.

The retirement savings scheme isn’t just a smart move for salaried employees. Opt in when you work for yourself and you’ll still reap the rewards. Here are some tips for powering up your savings.

Get in to get the most out

Even putting a small amount each week into KiwiSaver can make a big difference to your sunset years.

If you put in at least $20 a week — or $1,043 a year — into your fund, you’ll receive the full government top-up of $521 a year.

If you don’t want to commit to a set amount each week, you can make lump sum payments through Inland Revenue or your KiwiSaver provider when you choose to.

3 Kiwisaver woman Case Study

Case study

Doing the sums

Leila is a 35-year-old freelance writer who makes $40,000 a year before tax. She doesn’t know if joining KiwiSaver would be worth it because she doesn’t have an employer to top up her savings. 

KiwiSaver savings calculator — Sorted

She’s started thinking seriously about her retirement, but wonders if another kind of investment would be a better bet.

She has $200 a month to spare and so would be entitled to the full government top-up. After learning this means an extra $15,630 from the government that she can invest before she retires at 65, she decides KiwiSaver is the way to go.

3 Kiwisaver Jake Case Study

Case study

Long-term lesson

Jake is a 42-year old landscape designer who makes $60,000 a year before tax. He joined KiwiSaver in 2010 and has $5,000 in his fund.

He’s getting married this year and doesn’t have a great deal of cash to spare.

He currently contributes the minimum $20 a week to qualify for the full government top up. However, he works out if he ups his payments by just $3 a week to $23 he’ll get an extra $3,934 by the time he retires at 65. For less than the cost of a flat white, it seems silly not to.

Check you’re in the right fund

If you don’t choose a KiwiSaver fund, Inland Revenue will put you in one of nine default funds. This may not be the best option for you.

The right fund for you will depend on your situation and attitude to risk. The riskier the fund, the higher your potential returns. Use Sorted’s Fund Finder tool to find the right type of fund for you and compare different funds of that type.

Fund finder (external link)  — Sorted

Don’t pay more tax than you need to

Check your rate is right for your income — especially if your annual income varies greatly year to year. Ask your KiwiSaver provider.

Find out more about KiwiSaver

If you have employees, make sure you know your KiwiSaver obligations.

If you have employees, make sure you know your KiwiSaver obligations.

These include providing KiwiSaver information packs to all new staff and existing ones if they ask.

Find out about KiwiSaver when you have employees.

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