The impact of COVID-19 may mean that there may be many New Zealanders who may have had to adjust the way in which their money is being spent. Most employed people have Kiwisaver payments deducted automatically from their pay, but did you know that you can add to your KiwiSaver savings at any time?
It can be done through either one-off amounts or as regular additional payments, which can help to boost the balance. These contributions can be set up with additional advice and guidance from your KiwiSaver provider.
So why might putting the extra money that you’ve accrued or accumulated as a result of changed situations into KiwiSaver be a smart move?
Many people may be reluctant to put more than the bare minimum of contributions into their KiwiSaver. If you put less than the bare minimum, which is $1,042 per year, you will receive a supplemental Government contribution, which can be a maximum of $521.
It might make more sense to invest your money elsewhere – but investing additional contributions into KiwiSaver can provide you with long term interest. A key one for many is that of compounding returns.
When a return is being compounded, it means that the money originally invested has interest added to it initially, and then the interest rate for the investment is applied agains the new amount. When this happens every year, compounding can start to work to your advantage.
Putting extra money into KiwiSaver also avoids having to make what can be complicated decisions and tradeoffs about where you want the investment money to go otherwise.
If you suffer from investment procrastination or over-thinking, nudging up your KiwiSaver contributions could be the simplest solution.
Speaking with your KiwiSaver provider may be the right step for you to take.
