Hi there,
One of our services is helping our clients achieve their financial goals, and the one powerful tool to do that is your KiwiSaver account. One way of growing your KiwiSaver balance is by increasing your contributions.
Understanding contributions
As a KiwiSaver member who is an employee, you can contribute 3%, 4%, 6%, 8%, or 10% of your gross salary. Your employer is required to match your contributions up to 3%, and the government adds an annual member tax credit (up to $521.43) if you contribute at least $1,042.86 yearly.
Growing your savings
The funds you invest in your KiwiSaver account grow over time. This is because your fund manager invests your KiwiSaver savings on your behalf, which means your savings earn returns. And then the returns earn more returns – this is the power of compounding returns.
How increasing your contributions could impact your savings
The amount you contribute to your KiwiSaver can significantly influence your savings. Let’s consider the difference between contributing 3% and 8% of a $80,000 annual salary over 30 years.
Sorted NZ estimates that if you contribute 3%, with employer matching and the government tax credit, in an aggressive fund, you could have a balance of $265,697. In comparison, if you contributed 8%, with your employer contributing 3% and the government tax credit, in an aggressive fund, you could have a balance of $505,672.
The KiwiSaver calculator on the Sorted website can be a helpful tool for comparing how different contribution rates and fund could impact your savings.
Getting started
To change how much you’re contributing, contact:
- Your employer if you are employed
- Your KiwiSaver provider if you’re not an employee e.g. self-employed
Get in touch if you’d like to speak further about your KiwiSaver strategy and how you can make the most our your account.
Look forward to hearing from you soon.
Best regards,
Bourne Wong
