How to maximise the Government’s KiwiSaver contribution before June deadline

How to maximise the Government’s KiwiSaver contribution before June deadline
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With the June 30 deadline to maximise your Government KiwiSaver contribution looming, Newshub spoke with Financial Adviser Eachann Bruce from award-winning KiwiSaver provider Milford, for some tips on how to help you make the most of your KiwiSaver account. 

The good news is, if you’re in KiwiSaver and contributing regularly you’re off to a great start.

You may have heard of the government contribution but may not know exactly what it is. According to Eachann ''maximising the Government contribution is a simple way to add thousands to your long-term savings.

"Generally, for KiwiSaver members aged 18-64, who live in New Zealand from July 1 to June 30 each year, the Government will contribute 50 cents for every dollar, for the first $1,042 you put in your KiwiSaver account. This is an automatic 50 percent return on that contribution, you’d be hard pressed to find that type of return anywhere else."

Eachann said many people will be on track and won’t have to do anything more to get the full government contribution. "If you’ve been employed all year, you’ve contributed to your KiwiSaver at least at the minimum 3 percent rate and you’ve earned over $35,000 in wages then you should have contributed enough to get the full government contribution. If you’re not sure how much you’ve contributed, then you can check your My IR login with the IRD or you can contact your KiwiSaver provider," he said.

The deadline to top up for the government contribution for this KiwiSaver financial year is June 30. You don’t want to leave it to the last day though. It can take a day or two to process transactions, so it’s best to get your contributions in well before the deadline.

Even if you contributed less than the full $1,042, the government will still match you with 50 cents for every dollar you have put in during the KiwiSaver year. The government contribution is automatically deposited in your KiwiSaver account, usually during the month of July.

The government contribution is valuable, but it’s just one of the many ways to increase your KiwiSaver savings.

"Actively choosing your fund and your KiwiSaver provider is another great way to ensure your KiwiSaver is setup for success. For example, with the recent changes to default fund providers there was a 50% increase in people switching their KiwiSaver provider last month. This tells us it was an event that triggered people to focus in on their KiwiSaver and make sure they were in the best option for them," Eachann said.

If you’ve been in KiwiSaver and have never really looked at it or you’ve been thinking about making a change, now is a good time to consider taking action. “It’s worth comparing your options and making a decision. For some, that decision may be to stick with their current provider and fund type. But for others, it may make more sense to compare the market and switch providers and fund type.

In general, there are three main types of KiwiSaver fund - conservative, balanced and growth. And the right fund for you, will depend on your answers to these three questions:

1.       What you’re trying to achieve (e.g. first home savings or retirement savings)

2.       Your tolerance for risk (i.e. ability to handle ups and downs in the value of your investment)

3.       Your investment timeframe (i.e. how long until you need to withdraw your money).

Understanding your answers to these questions can be tricky. Getting financial advice can help. It can give you the confidence that your KiwiSaver account is set up the right way for you. Eachann Bruce said that financial advice is no longer just for those with a lot of money "At Milford, we’ve created a digital advice tool to help our KiwiSaver members identify their savings goals and how to reach them. You can now get advice fully online in relation to the Milford KiwiSaver Plan at no extra cost, making advice much more accessible."

Of course, you can also speak to your financial adviser for advice as well.

The great thing about KiwiSaver is it gives you an automated savings and investing plan. By regularly putting away a little bit of your paycheque and having this invested by your KiwiSaver provider, your savings can grow dramatically over time. And then by making a few small tweaks along the way, like maximising the government contribution, making an active choice and seeking advice you can really get your savings on track.

This is intended to provide general information only and should not be viewed as investment or financial advice. Past performance is not a reliable indicator of future performance. Before making financial decisions, you may wish to seek financial advice. Read the Milford KiwiSaver Plan Product Disclosure Statement as issued by Milford Funds Ltd at The disclosure statements of all Milford Financial Advisers contain more information and are available on request free of charge. For more information about getting advice at Milford see our website.

Who is eligible?

You must be a KiwiSaver member 18 years or older, not yet entitled to make a retirement withdrawal and have mainly lived in New Zealand over the 12 months ending 30 June 2021. If you are only eligible for part of the year, or joined KiwiSaver part way through the year, you will receive a proportional amount of the Government Contribution, based on the number of days you have been eligible. For more information, contact your KiwiSaver provider. 

This article was created for Milford.