Cost of living: Top tips for getting the most out of your KiwiSaver savings

  • 03/04/2023
  • Sponsored by - ANZ
Cost of living: Top tips for getting the most out of your KiwiSaver savings
Photo credit: Supplied

As the cost of living crisis continues to bite for many Kiwi families, saving for your retirement can seem especially difficult.

But planning for your future is a crucial part of your financial wellbeing and it's important to keep contributing to your KiwiSaver account, even when times are tough.

Making sure you get the annual KiwiSaver Government contribution is one of the best ways to boost your retirement funds.

If you're eligible, the Government will contribute 50 cents for every dollar you contribute to your KiwiSaver account, up to a maximum of $521.43 each year - a 50% return on your investment.

"Every little bit counts, even a $10 contribution to your KiwiSaver account will get you a $5 contribution from the Government. The more you contribute, the more you are eligible for, up to $521.43 per year," said Sarah Beauchamp, General Manager Funds at ANZ.

As the years go by, that money can really start to pile up.

If you received the maximum Government contribution each year for 40 years, this alone would add $20,858.40 to your KiwiSaver savings.

But of course, your KiwiSaver savings also have the potential to earn investment returns, so these Government contributions after 40 years could grow to approximately $58,000 if they earned an average return of 4.5 percent each year*. This is without taking into account your contributions and any you might receive from your employer.

So how do you ensure you get that maximum annual boost from the Government? You'll need to contribute $1042.86 between July 1 and June 30 the following year to receive the maximum Government contribution of $521.43. That breaks down to about $87 a month, $44 a fortnight or $21 a week for 12 months.

If you're employed, earning at least $35,000 per year and contributing at least 3% of your salary or wages, you should qualify for the maximum Government contribution automatically. 

However, if you're not contributing from your salary, or if your contributions may not reach $1,042.86 by the end of June, there are a number of ways you can top up your own contributions to get the maximum Government contribution:

  • Make regular voluntary contributions.

  • Make one or more lump sum contributions.

  • Increase your contribution rate if you’re in a position to do so.

Putting $20 a week into your KiwiSaver might normally sound easy enough, but at the moment it might be more challenging given the growing costs of everyday household items at the moment.

"While the increasing cost of living and rising interest rates are having an impact on Kiwi families, financial wellbeing isn't about how much you've got, it's about making the most of what you have," said Beauchamp.

"Price rises might feel uncomfortably high right now, but it's important to find ways to keep saving through the good and not-so-good times. By focusing on the long term and making a plan now, you can ensure your finances are in better long-term shape."

"Likewise, it's understandable to question whether you should keep up with your KiwiSaver contributions when the balance goes down. But we encourage people to keep contributing if you can because KiwiSaver plays an important role when it comes to financial wellbeing, even when the markets are down. For example, investing through a downturn means you can benefit from any market recovery. Keeping up your KiwiSaver contributions will also help you cement the good savings habits you've set in place."

"There are a few factors that should be considered before deciding to pay off your debt or put money into KiwiSaver," said Beauchamp.

"As a general rule of thumb we would encourage people to reduce their debt before they consider investing. Typically credit card debt for instance will incur interest expenses that are higher than the returns they are likely to receive from KiwiSaver and so it makes sense to pay that debt off first."

"However, there are exceptions to this rule and everybody's circumstances are different. Investors should consider the benefits they will receive from KiwiSaver like the contribution their employer will provide, and the Government contribution they will receive and weigh these factors up against paying off their debt first."

Exactly how much you need to have squirreled away when you retire depends on a range of factors that are different for every individual. While NZ Super is paid to eligible New Zealanders 65 and over, you should consider whether this will be enough to fund the lifestyle you want in retirement. 

Are you on track? Three things to check:

  • Work out where you're at using a KiwiSaver calculator, which will help you work out how much you are likely to have saved by retirement, how much you might need and whether you're on track.

  • Check you're in the right fund for you. This will depend on your age, your desired level of potential returns, and how comfortable you feel with experiencing ups and downs in your KiwiSaver savings.

  • Consider increasing your employee contributions if you can, or make voluntary contributions to help grow your KiwiSaver savings and make sure you receive the Government Contribution if you're eligible. 

For more tips, check out ANZ's Financial Wellbeing Programme, or call your bank for a chat.

*The figures used are for illustration only and may not reflect actual returns. The underlying return assumptions are set by the Government. This example assumes positive investment performance of 4.5 percent per annum (the Government return assumption for a Growth Fund). The figures are not adjusted for inflation.

Article created in partnership with ANZ.

This material is for information purposes only. ANZ recommends seeking financial advice about your situation and goals before getting a financial product. To talk to one of our team at ANZ, please call 0800 269 296, or for more information about ANZ’s financial advice service or to view our financial advice provider disclosure statement see