A full version of this article first appeared in the New Zealand Herald in early 2024

KiwiSaver balances might have looked a little sad over the last couple of years but Milford KiwiSaver financial adviser Liam Robertson is cautiously hopeful about the road ahead.

“Markets are a wee bit more positive than they were a couple of years ago,” he says. “Things are still quite volatile, but there are signs that we are starting to move away from some of the pain that came about because of Covid.”

With inflation reducing and interest rates expected to trend down in the next 12-24 months, now is a good time to review investments. Liam has some key tips to make sure people get the best from KiwiSaver.

Get the government contribution

Now is the perfect time to make sure you have put the minimum required amount into your KiwiSaver account to get the maximum annual government contribution of $521.43. This is money the government will add to your KiwiSaver if you meet eligibility requirements, and you contribute at least $1042.86 between July 1 and June 30 each year. You can top up you KiwiSaver between now and the end of June to ensure you pass the threshold.

The amount excludes employer contributions and applies to KiwiSaver members aged 18-64 who mainly live in New Zealand. It’s important to note you will still receive 50c from the government for every dollar you contribute, up to the maximum of $1042.86. 

Set a goal

It’s crucial to know what you want, whether you are saving for your first home, or retirement. “It’s easy to take an ‘out of sight, out of mind approach’,” Liam says. “The sooner people set a goal and figure out how to use KiwiSaver to achieve it, the better.

Right fund and contribution level

Once a goal is clear, it’s time to choose the right fund. Choosing a fund depends on an investor’s timeframe and risk tolerance. If you are in your late 30s and have already withdrawn from your KiwiSaver for your first home, you might look towards retirement.

In this case, a growth or aggressive fund might be appropriate, depending on your risk appetite, Liam says. There will likely be enough time for compound returns to work their magic and for a KiwiSaver balance to recover from the ups and downs of the market.

If your goal is to purchase a house in the next couple of years, or if you are nearing retirement and intend to withdraw your funds then, it might be more appropriate to switch to a lower-risk fund, he says. Online tools, such as the Sorted Retirement Calculator, help calculate returns long-term, based on how much is contributed and the type of fund chosen. 

Why choose Milford’s KiwiSaver Plan?

Milford has just been named Consumer People’s Choice KiwiSaver Plan for the seventh consecutive year.

The award was announced in April, following Consumer NZ’s KiwiSaver satisfaction survey, where people shared their experiences with their KiwiSaver provider. A total of 1,996 New Zealanders aged 18 and over were surveyed online during January and February 2024. Milford’s overall satisfaction rating was 69%, with average across all providers at 52%. 

“Milford was the runaway winner when it came to satisfaction with investment returns,” Consumer said when announcing the award. “Milford performed strongly across the board, with above-average performance for investment returns, the fairness of its fees and charges, and for keeping customers updated about their investments,” Consumer said in it’s press release. 

If you would like to talk with any of Milford’s Wānaka-based Wealth Management team about the Milford KiwiSaver Plan, please feel free to get in touch on 03 443 4695. Financial Adviser Disclosure Statements are available on request free of charge. 

Disclaimer: Past performance is not a reliable indicator of future performance. Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at milfordasset.com. Before investing you may wish to seek financial advice. For more information on our financial advice services please visit milfordasset.com/getting-advice