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KiwiSaver and superannuation

Most of us can now expect to live well into our 80s – great news for us, but not our finances. New Zealand Superannuation (NZ Super) will help but if you want to enjoy some luxuries when you retire, you’ll need to build your own retirement nest-egg.

KiwiSaver is one of the best ways you can prepare for retirement. The Government contributes and your employer may contribute too, making it easier for you to reach your goal.

3 things you can do to enjoy a more comfortable retirement

  1. Decide how your KiwiSaver contributions are invested. If you don’t, they will be invested in a default investment fund. This may not be suitable for you. Think about your investment goals and your attitude to risk and choose a fund that will help you achieve the investment growth you need. Sorted’s investor kickstarter tool can help you with this.
  2. Contribute as much as you can, as soon as you can. NZ Super is unlikely to provide enough income for most people. Paying more than the minimum contribution now can make a big difference to the income you’ll receive when you retire.
  3. Check you’re paying the right PIR. Your KiwiSaver investment returns are taxed according to your prescribed investor rate (PIR). This is based on your annual taxable income. It’s important you get this rate right - if you pay more than you need to, the money won’t be refunded. Learn more about PIRs here.

The fees you pay can make a big difference to the growth of your investment. Fees tend to be lower in KiwiSaver than for other managed funds but it’s still a good idea to see how fees compare between providers. Sorted’s KiwiSaver fund finder tool can help with this. Learn more about why fees matter.