There are many easily avoidable mistakes that people are making with their KiwiSaver accounts. In this blog post, we will look at five very common KiwiSaver mistakes that people are making.
Make sure that you’re not guilty of these mistakes and see whether you are getting the most out of your KiwiSaver contributions with our KiwiSaver Performance Comparison tool.
First KiwiSaver Mistake: Not Joining
The first KiwiSaver mistake many people are making is not joining KiwiSaver at all. KiwiSaver is a tailored fit for people in different stages of their life.
You can use your KiwiSaver contributions for the purchase of your first home or to help set yourself up for retirement.
The excuse of “I don’t earn enough to save” shouldn’t hold you back from joining KiwiSaver as you have a lot of control over your monthly contributions.
Second KiwiSaver Mistake: Failure To Understand KiwiSaver
KiwiSaver is about helping you get into the habit of making regular savings towards your long-term future.
KiwiSaver provides many incentives for contributors, one being the fact that the New Zealand Government make an annual contribution to your account if you are a contributing member.
The Government will contribute 50 cents for every dollar that you contribute (this caps at $521.43).
Third KiwiSaver Mistake: Setting Up Your Account and Ignoring It
Many KiwiSaver contributors set up their account and think that’s all they have to do. It’s important to keep track of the market and assess how your account is doing.
As your circumstances change, you should make sure that your chosen account is reflective of your current salary levels so that you can save even more over time.
Your KiwiSaver provider should send you regular updates regarding your account and they are there to help clarify any questions you may have.
Fourth KiwiSaver Mistake: Treating KiwiSaver as an Expense
KiwiSaver should be viewed as an investment and not an expense. Many people fall into the trap of thinking KiwiSaver is an expense as it cuts into your salary.
However, you should look at KiwiSaver as another bank savings account. With a savings account, you put funds into the account and accumulate interest.
With KiwiSaver you contribute funds into an account and those funds are invested into things such as New Zealand deposits, bonds and shares.
Similar to a savings account, in the long run you want the value of your initial contribution to grow significantly.
Fifth KiwiSaver Mistake: Reacting To The Market Emotionally
KiwiSaver is essentially investing and can take years to develop an understanding of it. One common mistake with KiwiSaver is overreacting to market changes and making drastic and sometimes desperate changes to your account.
This can negatively affect your KiwiSaver contributions and reduce your investment returns over the long run.
Make sure that you are getting professional advice from a financial adviser before you make any drastic changes to your KiwiSaver account.
Compare KiwiSaver Funds And See How Your Fund Compares
Compare KiwiSaver Funds and schemes with our comparison tool! At glimp, we have a new KiwiSaver performance comparison tool that lets you compare KiwiSaver providers such as ANZ, AMP, ASB and BNZ.
You can sort the KiwiSaver funds by the fund type and see key information such as annual fees, expected return rates, and other valuable information to help make deciding on the right KiwiSaver scheme and provider a little easier.