KiwiSaver contribution strategies: what’s best for your long-term goals?

KiwiSaver is one of the most powerful long-term savings tools available to Kiwis, but many people set and forget their contributions without realising that small changes now can make a BIG difference later. Not only that, most are currently in the wrong fund or fund type as they have never received advice. This can lead to differences of hundreds of thousands of dollars.

Here’s what you need to know to make sure your contribution rate aligns with your goals.

How KiwiSaver contributions work

If you're employed and enrolled in KiwiSaver, it’s likely you’re already contributing either:

3%, 4%, 6%, 8% or 10% of your before-tax income

Your employer must contribute at least 3% (this rate is going up to 3.5% in 2026 and then to 4% in 2028). For most people, this contribution is on top of your agreed salary or wages, but for some, it may be included as part of your existing pay. If you're eligible, the government will also top up your savings (more on that below).

Other than when saving for a home, most people tend to contribute the minimum amount even after withdrawing funds for a home. However, a 3% employee contribution rate is simply not enough to build up a healthy retirement fund, and one of the reasons the minimum contributions are increasing shortly.

Over in Australia, employer contributions sit at a compulsory 12% and are increasing. This just shows how far short retirement funds are here in New Zealand. Get ahead of the curve and chat with us so we can carry out some forecasting models on what your fund may be worth through a variety of scenarios.

You can also make voluntary contributions if you’re self-employed, on parental leave, or simply want to top up your fund.

Planning for retirement?

A small increase in your contribution rate now can add tens or even hundreds of thousands to your fund over the long term, thanks to compounding returns.

Consider...

• If you have never received advice or had a review of your KiwiSaver fund, then reach out for a review and you may well be very surprised by the impact performance has on your fund let alone contributions.
• If you’ve had a pay increase, consider whether to bump your contributions percentage up too.
• Stay consistent, even during career breaks or reduced work hours (even if this means dropping your contribution percentage, it’s better than not contributing at all!).
• Review your fund type every few years to make sure it still suits your stage of life (younger investors may benefit from a growth fund, whereas older investors may prefer to be more conservative - a mix of both is an option too).

Even contributing an extra 1–2% now can significantly improve your retirement lifestyle later.

Don’t miss out on the Government contribution

Every year (from 1 July to 30 June), the government will add a top-up to your KiwiSaver fund. The top-up is 25% of your personal contributions for the year, up to a maximum of $260.72.

• To get the full amount, you must contribute at least $1,043 of your own money during the KiwiSaver year.
• If you’re not contributing regularly, for example, if you’re self-employed or on unpaid leave, you can make a voluntary lump sum before the deadline to still qualify.

This is free money - don’t leave it on the table!

Choosing the right fund matters too

Your contribution strategy doesn’t stop with how much you contribute; it also includes where your money is going.

There are four main KiwiSaver fund types: conservative, balanced, growth, and aggressive.

Each has a different mix of risk and return, and the fund you choose can impact your long-term results just as much as your contribution rate.

What to consider....

• If you're withdrawing within the next 1–3 years (e.g., for a first home deposit), a conservative or balanced fund may be better.
• If retirement is still 10+ years away, a growth fund can help maximise returns.
• Mixed funds are also possible. This could mean putting some of your investment into a growth fund and some into a more balanced or conservative fund. How you split your fund depends on your age and overall goals, so talk to us about the best split for you.
• For those willing to take on higher risk for the potential of higher long-term returns, an aggressive fund is another option.

Not sure if your KiwiSaver is working as hard as it could be? Whether you're aiming for home ownership or a more comfortable retirement, it helps to have the right strategy in place.

As KiwiSaver advisers, our Queenstown-based team can help you:

• Understand your KiwiSaver options for buying a home vs saving for retirement, and what option is best for you.
• Review your current contribution rate and fund performance.
• Create a plan that aligns with your short- and long-term goals.

Get in touch for a free KiwiSaver check-in, and let’s make sure your money is working for you, not the other way around.