Four-step KiwiSaver Health Check

Author: James Hurwood

Regardless of how far off retirement is for you, it could be beneficial to regularly check your KiwiSaver to ensure your finances are on track.

Taking the time every now and then to check your KiwiSaver could end up making a significant difference to the size of your retirement nest egg. This is especially true if you’re one of the thousands of people who made a hardship withdrawal due to COVID-19. A check now could help you identify strategies for getting things back on track.

Here are four KiwiSaver health-check steps to consider, no matter what your KiwiSaver stage of life:

1. Check your KiwiSaver fund’s performance

The extent to which your KiwiSaver balance is growing is arguably the biggest factor in determining how financially comfortable you will be in retirement. If you are working, generally, your employer must contribute regularly to your chosen KiwiSaver account. You can also adjust the level of your personal contributions. But just as important is how fast your KiwiSaver is growing due to investment returns.

Your chosen fund invests your retirement savings on your behalf with the aim of growing your balance. However, funds can vary significantly in what they deliver in investment growth. So, it’s important to keep an eye on how well your fund is performing.

You can do this by checking your KiwiSaver statements for performance information. Canstar’s KiwiSaver comparison tables are also a good way to judge how your fund compares to other providers on our database.

For more information on the subject, check out our story: Keeping Track of Your KiwiSaver Balance & Contributions.

Remember, KiwiSaver is a long-term investment. Paying attention to performance over a longer time frame, such as a five-year instead of a one-year period, can give you a better idea of how well your fund is positioned to deliver growth.

That said, investments can go up and down over time, so a strong past performance isn’t necessarily indicative of good future returns. This means it’s important to consider performance alongside other factors, which brings us to our next tip …

2. Check your KiwiSaver fund’s fees

KiwiSaver funds charge a range of fees to their members. These can include administration fees and investment costs, which should be listed on your KiwiSaver statement.

When you see the amount of fees you’re paying, it might not look like a massive amount when compared against your returns. But over time fees can eat away at your balance and limit the amount of money that’s earning investment returns for you.

What may look like a small percentage difference in the fees charged by different KiwiSaver funds can potentially translate into tens of thousands of dollars of retirement funds saved or lost by the time you’re eligible to cash in your investments.

You can compare the fee levels charged by KiwiSaver funds on Canstar’s database, using our comparison tables. If you feel like you’re not getting good value for money from your fund, it could be time to consider shopping around.

For more on the subject of fees, we’ve our article: KiwiSaver Fees vs Returns: Are You Getting True Value?

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