Reviewing your KiwiSaver

KiwiSaver was implemented with the primary aim of helping people save for their retirement. A key benefit of the scheme is also being able to access the funds for a first home deposit. Overall KiwiSaver has been very successful in both of these. According to the FMA’s 2020 KiwiSaver Annual Report:

• $1.33 billion was withdrawn once members reached age 65, up 28% on the previous year

• $1.19 billion was withdrawn for first home purchases in the 2019/20 year, up 25% on the previous year

With these two savings goals in mind, it would be sensible to regularly review your KiwiSaver to see if it is on track to meet these goals. Yet few people do. Many simply think ‘I’m in KiwiSaver, I’m all good’ or more commonly simply do not understand the basics of how KiwiSaver works that enables them to do this for themselves.

Not understanding and reviewing KiwiSaver has two dangers. Firstly your KiwiSaver may not be performing as well as it needs to to realistically meet your savings goal. Secondly, as you move closer to the savings goal, the volatility of your current fund may leave you vulnerable to a sudden dip in your fund balance, just as you were planning to access it.

Similarly, once you have reached either of these two savings goals KiwiSaver should be reviewed. As we see from the FMA report, many individuals withdraw their KiwiSaver as soon as they reach age 65. However, leaving it in KiwiSaver may be the smarter option, especially if you do not intend to actually use the funds straight away.

For first home owners who have used their KiwiSaver funds it may now be 25 years or more until they can access their KiwiSaver again. So it makes sense to review their KiwiSaver choices to relaunch their savings towards their retirement goals.

Once you understand the fundamentals of KiwiSaver, regularly reviewing it is something you can easily do for yourself.

If you would like to know more about how KiwiSaver works and how you can review it for yourself, feel free to message us to book a 100% free 30 minute KiwiSaver Tutorial.