Making it easy for you to manage your KiwiSaver investment

As consumers, we all thrive on instant gratification – the here and now. No wonder then that it’s so easy to be hoodwinked by the apparently innocent decisions we make (or don’t make!) today, that have a major impact on our future. Let’s be honest – the future is intangible for most of us.

Take for example, what you do with your KiwiSaver account. For those of you who pay attention to it regularly, you are likely to not only keep track of how your balances are growing but also how your fund is performing relative to other funds in its peer group. Keeping tabs will allow you to ensure you are in the most appropriate funds over time.

All under your control

You are able to transfer between KiwiSaver schemes and funds at any time of your choice. You have the complete freedom to do so. After all, it’s your money!

The objective should be to ensure you maximise your KiwiSaver account balance by the time you are eligible to withdraw it, by ensuring your money is invested in the KiwiSaver fund that is best suited for you at any point in time. ‘Best suited’, meaning the one that takes into account how many years you are away from being eligible to withdraw your KiwiSaver account balance, the category of funds that align with your appetite for riskiness, those that have reasonable fees and costs etc. Find out more in our free ebook on “How to pick the best KiwiSaver fund in 4 easy steps”. You can get your free copy by signing up to our newsletter.

Enjoying the million-dollar lifestyle

Why is keeping on top of your KiwiSaver that important? Well….here’s a sobering thought.
Based on some very conservative assumptions*, a 3% per year higher return on your fund will more than double your savings in retirement, to $1.23 million. Having said that, the focus should not be only about simply being invested in the best ‘performing’ fund at any given point in time. Because, it’s almost impossible to predict next year’s winners. But, it’s definitely possible to narrow your chances to a handful that fit your circumstances.

Of the over 2.8 million KiwiSavers in total, roughly a 150,000 people transfer between Schemes each year. That’s a pretty small proportion. The fact is, a majority of KiwiSavers are yet to pay enough attention to their savings, because there is no instant gratification. Which would explain most of the laziness observed.  Even though the stakes are this high.

Death by paperwork

But, in reality even for those who have made a decision to transfer to another KiwiSaver scheme there is still the friction when it comes to actually making it happen…largely given the logistical nightmare around paperwork when it comes to transfers. Often preferring to not act at all, because it’s ‘all too hard’. You know you need to transfer but you just can’t be bothered going through that experience.

As innocent as that decision might appear here and now, clearly the impact in a few years will prove to be a costly one –  about a half a million dollars!

Making it simple and easy

Knowing all of the above, and having got feedback from a number of you, we have been working hard behind the scenes alongside some of the KiwiSaver scheme providers to make scheme transfers as simple as possible for you. Check out how easy transferring to another KiwiSaver Scheme is.

We will continue to add more providers over time as we implement customised solutions for each of them. We figured it’s best for you that we put in the hard work in the background, so you find it real easy to do what you’ve got to do! Invest responsibly.

*Assumptions: 30 year old with a current balance of $15,000 in their KiwiSaver account contributing 3% to KiwiSaver from their $60K salary with wage inflation of 1% p.a.

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