Joining KiwiSaver doesn't mean your retirement savings are automatically sorted. Susan Edmunds talks to the experts about five crucial areas to get right to maximise a return

Choose your provider wisely

Tom Hartmann, of Sorted, says many people make the first mistake before any money even lands in their KiwiSaver account, by choosing a fund for the wrong reasons. That could be a decision based on a familiar brand, a strong advertising campaign, or the convenience of having a KiwiSaver account alongside other banking.

Being able to see your KiwiSaver balance every day isn't very useful for such a long-term investment but you may want a provider that offers online access when you want it, a good level of financial advice and regular updates about investments.

Hartmann says savers should not rely too heavily on past returns as "there's no guarantee at all that will continue" and recommends comparing funds. "Our KiwiSaver Fund Finder has a comparison with the average for the fund type through the years, so even when it's down badly you can take a long view and see where the fund was standing."

Pick the right fund

Almost half the country's KiwiSavers are in low risk, conservative or cash funds, even though many will not access their money for a long time.

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ANZ Wealth managing director John Body says the bank estimates that people who stay in default funds could have $72,000 less by retirement than if they had moved through a "life stages" style investment, where the risk is linked to the time until they need the money.

It's important to make sure you are invested in a fund that matches your risk profile. If you want to use your money within the next three years, to buy a house or to retire, being in a conservative fund is sensible - and the default schemes offer cheap fees.

But taking more risk usually means better returns over the long run. Hartmann says: "If you've got more time, you have more time to ride the ups and downs."

Consider the impact of fees

Fees can make a big difference to the final total you end up with.

Chris Douglas, of research house Morningstar, says most people do not understand the fees they are paying, which is a problem particularly for conservative funds.

"There are a number of funds charging more than 1 per cent. That's a very high fee to be paying for mid-single digit returns."

Hartmann says new disclosure requirements make it easier for savers to compare fees. Sorted offers a calculator to help.

Make the most of extra benefits

One of the biggest advantages of KiwiSaver is the "free money" you get if you contribute. But many aren't getting what they are entitled to.

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The Government will contribute $521 to the accounts of people who put in a minimum $1042 in a year but Body says only 56 per cent of KiwiSavers received that in the past financial year.

"KiwiSaver members nationally missed out on an estimated $400 million that could have been claimed if they had contributed the minimum amount."

If you aren't contributing enough through your pay cheque, set up a direct debit to ensure at least $1042 goes into your account each financial year. Body says a lot of people claim they did not want to join KiwiSaver because they were saving for a house - not realising the extra help they could get if they were in the Government scheme.

The Government is planning to double the subsidy available, up to $10,000, for first-home buyers withdrawing their KiwiSaver funds if they are buying a new home.

Beware of contributions holidays

Body says some people are spending years on contributions holidays that will cost them in the long run. KiwiSaver members can elect to take a five-year "holiday" from making contributions.

Almost 5 per cent of members are on a holiday now and most are under 35.

ANZ says the average length of time for a contributions holiday is four years and three months.

ANZ modelling shows a person earning about $27,500 at age 20 and saving throughout their career would have saved $452,000 by the time they retired at 65.

That same person would have $50,000 less if they took a five-year contribution holiday.

Body says: "To a degree, you're pre-spending your retirement savings."