"Perhaps one of the biggest mistakes people make with KiwiSaver is not participating in it," says Milford Asset Management retail product manager Sarah Mitchell.
"Despite the Government incentives and compounding returns of the investment, some people still do not feel that KiwiSaver is worth including in their retirement planning."
Mitchell says it's a missed opportunity to not take advantage of the Government kick-start, yearly member tax credit and employer contributions that aren't available through private superannuation schemes.
"These incremental savings can really add up over time."
Superlife principal Michael Chamberlain says lack of knowledge and understanding of KiwiSaver's potential value often holds people back.
"The question should be: why would I not join?"
Chasing returns
Performance chasing is a mistake commonly made by investors and KiwiSaver is no exception, says Morningstar Australasia co-head of fund research Chris Douglas.
"Time and again we see that last year's top performer is this year's bottom performer," he says. "Do you drive your car by looking in the rear view mirror? Then don't invest by looking backwards."
For most people saving for retirement is a marathon, not a sprint, says Gareth Morgan Investments head of retail wealth and marketing Joe Bishop.
"What happened in the last few months will probably have little meaning over 20 or 30 years of saving. Investment funds - particularly ones with a high proportion of growth assets like shares - rarely go up in a straight line."
Set and forget
BNZ head of wealth and private bank Donna Nicolof says the biggest mistake in her book is ignoring your KiwiSaver fund.
"KiwiSaver is not just a way to get some free money from your employer or the Government.
"It can help achieve important goals, whether that be saving for a first home deposit or providing a more comfortable retirement."
Simply joining KiwiSaver and either not contributing, or contributing the minimum amount could mean you will not reach your savings goals, she says.
"We encourage everyone who has already joined KiwiSaver, or is considering joining, to develop a saving goal and consider how KiwiSaver can help achieve that goal."
ANZ head of retirement solutions at ANZ Wealth Ana Lockyer says many people think they're en route to a good retirement simply by joining KiwiSaver, but it may not be the case.
"It's like thinking 'I have a car so I can get from A to B whenever I want'. In fact you need to know how to drive, how to keep the car safe and serviced with regular warrants. You need to choose a route and follow the road code," Lockyer says. "Likewise with KiwiSaver you need to know how it works and the best way to use it."
Seeking out convenience
While it's good to know how your KiwiSaver is tracking, Morningstar's Chris Douglas says changing providers simply because you can see your balance alongside bank accounts can be a mistake.
"Having your accounts visible all in one place is not a valid reason to switch KiwiSaver provider."
Fisher Funds operations manager Vedran Babic agrees.
"While visibility of your balance is important, what is more important is the overall value you receive from your KiwiSaver provider.
"Do they tell you where your money is invested and why? Do you know the credentials and experience of the people actually managing your money? Does their investing philosophy make sense? Is help available to assist you in choosing the most appropriate investment strategy? Are the returns generated competitive?
"KiwiSaver is not simply a bank account - it is an investment. All investments carry risk but you have influence over the level of risk by doing your research and choosing a KiwiSaver provider that delivers on the things that are important to you as an investor."
Missing the member tax credit
Westpac head of investments and insurance Kate Armstrong says not getting the full benefit of the Government member tax credit is another mistake KiwiSavers make.
"The Government will make an annual contribution of up to $521.43 towards your KiwiSaver account provided you have personally contributed at least $1042.86 a year. This is an easy way to grow your KiwiSaver."
Not saving enough
David Kneebone, executive director of the Commission for Financial Literacy and Retirement Income, says KiwiSavers need to make sure they are chipping in enough to make a difference in retirement.
"Remember New Zealand Super is $357 after tax for an individual each week and what's in your KiwiSaver is one way to top up that amount.
"How much do you want to have coming in each week when you stop working?"
Mercer managing director Martin Lewington says saving for retirement should be about guaranteeing a sustainable income in retirement that allows you to live the lifestyle you desire, for as long as you need it to.
Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.
To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose, helentwose@gmail com.
