Kiwisaver mistakes to avoid

When saving in a savings scheme such as the KiwiSaver, every cent should count. While accommodating as a KiwiSaver, there are still some mistakes you should watch out for.

1. Contributing the Bare Minimum

Although the minimum contribution rate for KiwiSaver is 3%, you should aim to contribute a higher percentage of your pay. Even if your contributions are remitted by your employer, you can still decide to make extra payments to your provider.

2. Being in the Wrong Fund

You need to understand your risk profile so you can choose the right fund for you. Each fund type has different kinds of investments, potential returns, and risks.

For instance, if you intend to invest your funds for a long period, you may be able to take a more risky type of investment funds such as the growth or aggressive fund.

3. Ignoring the Fees and Taxes

Most KiwiSaver contributors fail to consider the fees they’re paying for their type of investment fund. Higher fees may leave you with very little returns. Also, when it comes to taxes, ensure you get the PIR rate right to avoid paying higher taxes.

5. Failure to Maximize the Government Contribution

The annual contribution made by the government is one of the benefits of being a KiwiSaver. Always check your contribution before the end of May to ensure you qualify for the maximum government contribution.