How to make Kiwisaver work for you
KiwiSaver is one of the most powerful financial tools you have. If you set it up right, it can do more for your retirement than your house. The beauty of it is that once you take the time to make a few smart decisions now, you can step back and let it quietly grow in the background. Too many people are sitting in default funds or sticking with the bank because it was the easy option. I want to encourage you to make an active decision.
In order to avoid feeling overwhelmed, there are three simple choices you can focus on to make KiwiSaver work and find the right provider for you.
How Much to Contribute
This might sound obvious, but the more you put in, the more you will have. You choose 3, 4, 6, 8, or 10 percent of your pay. Your employer adds at least 3 percent, and the Government chips in 25 cents for every dollar you contribute, up to $260.71 a year. To get the full amount, you need to contribute at least $1,042.86 during the KiwiSaver year, which runs from 1 July to 30 June.
From April 1, 2026, the minimum will step up to 3.5 percent for both you and your employer. Then on April 1, 2028, it will rise again to 4 percent. There will be ways to stick at 3 percent if you need to, but I encourage you to try and find room in your budget for that extra half a percent. It will barely register in your weekly pay, but it makes a big difference to your retirement.
Want proof? Jump on the Sorted KiwiSaver calculator. It shows you in black and white how much more money you could have by bumping up your contributions. Spend ten minutes on it, and you will see why I keep banging on about this.
Choosing the Right Fund Type
Too many people are in funds that do not match their goals. This can happen for a range of reasons, such as not reviewing their fund after a major life event, or simply leaving things on autopilot.
Every KiwiSaver fund is a mix of two ingredients: growth assets like shares and property, and income assets like bonds and cash. Growth gives you more return long term, but it jumps around more. Income is smoother, but it will not grow your money as much.
The different fund labels such as defensive, conservative, balanced, growth, and aggressive are simply different recipes of these two ingredients. The trick is to balance two things: the maths and your stomach.
If you want a starting point, try the Sorted Investor Profiler. It is a free tool that helps you figure out your appetite for risk. But remember, it is a guide, not gospel. The maths shows that growth-oriented funds usually win over the long haul, so if you have decades ahead of you, you will likely come out with more money by leaning toward growth. Do not let your emotions sabotage your retirement. Panic is more expensive than risk.
Picking a Provider
Many people spend a lot of time comparing providers, but the truth is that your provider matters less than your contribution rate or your fund type. No one can predict which provider will deliver the best returns in the future. Past performance is history, and your fund will not grow from past results.
What does matter is having a reason for the provider you choose. It might be low fees, ethical investing, passive or active management, whether they are not-for-profit, whether they have a slick app, exposure to cryptocurrency, or whether they give you detailed information about your investments. There is no perfect choice, but there is a good choice for you.
Final Thought
KiwiSaver feels a bit like magic once it is set up. Your money goes in automatically, it grows in the background, and it keeps working while you get on with life. But the magic only works if you make a few active choices first.
That is how KiwiSaver works for you, the Maverick way.