Just like getting a Warrant of Fitness for your car, we think it is essential to regularly check your KiwiSaver Scheme to ensure it is still set up the way you expect. So, we’ve put together a few tips to help ensure sure your KiwiSaver is the best it can be.
We suggest it be done annually, perhaps at the beginning of each year or when you receive your annual member statement.
1. Check if your investment profile is still right for you.
This is about where your funds are invested. Is your choice of investment funds too conservative, too aggressive or just right?
The Sorted website has a useful tool to help you called Investor Kickstarter at www.sorted.org.nz/tools/investor-kickstarter. You answer a few questions, and it provides a guide to what type of investor you are and a typical investment mix for your investment profile.
2. Are you contributing enough?
Depending on your situation, consider whether you can afford to increase your contribution rate or make extra voluntary contributions.
If you have suspended making contributions, is it time to recommence contributing?
The Sorted website has another useful tool to help you with these questions, the KiwiSaver Savings Calculator www.sorted.org.nz/tools/kiwisaver-savings-calculator. You will need to complete a few questions, which will estimate how big your balance could be at age 65 and how much you could get per week in retirement. Try different contribution rates to see the impact on your future savings.
3. Is your Personal Investor Rate (PIR) correct?
Your PIR is the tax rate we use to calculate the tax on the income from the investment of your contributions. Check you are using the correct PIR. You don’t want to have too much tax taken from your KiwiSaver earnings or too little and face a tax bill by having the wrong PIR rate. Your PIR for the current tax year is based on your total taxable income in either of the last 2 tax years. If that changes, so might your PIR. Inland Revenue can also instruct us to change your PIR if they assess that it is incorrect. We have a handy guide to help you calculate your PIR on the scheme’s website www.christiankiwisaver.nz/documents under the Guides & Policies section.
There it is! Checking these three items every so often will help make sure that your KiwiSaver account is working for you.
Our staff are happy to help you with any questions you have on this.