KiwiSaver is an easy way to save for the future and it can also help you buy a first home. By contributing a small percentage of your salary each month, and with help from your employer and the government, you can build up a significant savings fund. But achieving your financial goals takes more than just setting and forgetting. Actively managing your KiwiSaver is essential. Whether you’re buying a first home or planning a comfortable retirement, here are 3 important things to know that can help you make the most of your KiwiSaver.

1. Being in the right fund matters

Most KiwiSaver schemes offer a range of investment funds designed to fit your appetite for risk. Choosing the right fund for your stage of life and financial goals is essential, as being in the wrong fund – or simply setting and forgetting – could mean you end up with far less when you retire.

One of the simplest steps you can take is to check you’re in the right KiwiSaver fund for your risk profile. A quick chat with your KiwiSaver provider about the right fund for you could lead to tens or even hundreds of thousands of dollars added to your retirement savings.

Conservative funds are more stable, lower-risk investments like bonds and cash, which provide a steady return but may not grow as quickly over time. If you’re saving to buy a first home or nearing retirement age, a balanced or conservative fund could help you grow your savings at a steady rate while providing security.

Growth funds, on the other hand, hold a larger percentage of higher-risk investments, such as shares, so generally offer a greater return on investment but can fluctuate sharply. These types of funds might suit those early on in their career who may be focused on long-term growth with higher risk but greater returns.

Remember, you can switch funds at any time and you don’t have to stay with your employer’s chosen provider or a default provider.

2. Employer and government contributions add up

KiwiSaver can be an effective savings tool, especially when you take advantage of employer and government contributions. By contributing at least 3% of your before tax salary to KiwiSaver, your employer is legally obliged to match it with a 3% contribution. Effectively doubling your savings at no extra cost to you!

Additionally, provided you contribute at least $1,042 each year, the government offers an annual contribution of $521.43. You can even benefit from the government’s contribution if you’re self-employed, as long as you meet the minimum annual contribution threshold. Together, these add-ons can significantly boost your KiwiSaver balance over time.

3. Boost your savings by adjusting your contributions

What makes KiwiSaver such an adaptable savings tool is the level of flexibility it offers. You can adjust your contribution rate to 3%, 4%, 6%, 8%, or 10% of your gross income at any time, allowing you to manage your investment at a pace that fits your lifestyle and budget.

By increasing your contribution rate, even just a percentage or two, you can accelerate your savings to help reach your financial goals sooner. And to further boost your savings, you can make lump sum payments at any time.

The same goes for the other way too: If your financial situation changes and you need to cut back on your contribution, you can do that at any time. And if you really need to take a break – because you’re heading overseas for a few months or you’re recently unemployed for example – you can take a savings holiday for a short time.

Access KiwiSaver for a first home or retirement

While KiwiSaver was originally designed as a retirement tool offering access to your savings after you turn 65, eligible first home buyers may also access their savings to buy a first home.

If you need help understanding how to use KiwiSaver to buy a first home, reach out to Mortgage Express today and connect with a mortgage adviser near you. Our team of mortgage advisers have first-hand experience helping hundreds of first home buyers access KiwiSaver to help finance a first home.