Given what's on offer, you need a very good reason not to be in KiwiSaver. More than 2 million Kiwis are saving a nest egg for their retirement and have taken advantage of the Government's $1000 kick-start and annual tax credit of up to $521, and employer contributions. In January alone, Kiwi employers contributed $66.5 million to their employees' KiwiSaver funds.
From April 1 KiwiSaver changes that were signalled in last year's Government budget will take effect. The minimum employee contribution rate will rise from 2 per cent to 3 per cent, and employers' contributions will also rise to 3 per cent.
This means you will notice a small decrease in your take-home pay, so it's a good opportunity to review your money plan and make any changes necessary. As your contributions come straight out of your pay, KiwiSaver makes it easy to save for your retirement, although it's important to understand what you've signed up for.
So as of April 1, you can choose to contribute 3 per cent, 4 per cent or 8 per cent of your income. Depending on your income, age, your living costs and whether you have debt to pay off - you can pick the percentage that suits your situation best.
Your savings are invested on your behalf by a provider and you're charged annual fees for this service. But not all fees are created equal. Sorted's KiwiSaver fees calculator (sorted.org.nz/calculators/kiwisaver-fees) can help you compare providers to make sure you're getting the best deal.
Whether you withdraw your savings for a deposit on your first home, or watch it grow until you're 65, KiwiSaver is one way to grow your savings and prepare for retirement with a relatively small amount of effort.
David is a spokesperson for Sorted.