That’s right, the Government will actually give you money if you make a minimum contribution to your own KiwiSaver account each year.
KiwiSaver is very flexible if you’re self-employed, you can contribute as much or as little as you like, although some providers may have minimum contribution requirements.
And, as long as you put in at least $1,042 of your own money (or just over $20 a week), the Government will give you $521 on top each year (this is called the member tax credit).
That’s a 50% return on the first $1,042 invested!
What will my $20 a week turn into?
If you did this for 20 years, after accounting for inflation, the member tax credit, a reasonable rate of return and assuming no other contributions, you could expect to have around $35k of real money to spend.* You can only access your money from age 65 but it can then be withdrawn as a lump sum.
Want to join?
There are a few simple steps to take and then you’re in:
A. Choose a provider. The way they manage the funds, their fees and performance all vary. We use Booster but there are plenty out there: https://www.kiwisaver.govt.nz/providers/ks-providers.html.
B. Choose a fund type. Make sure you read the product disclosure statement for the fund you choose, so you are familiar with your rights, the ins and outs of how the provider and fund works and the fees they charge. You may also wish to contact an independent financial adviser to help you make the right choices. There are different types of funds to choose from. For example:
- Conservative (low risk, low return)
- Balanced (medium risk, medium return)
- Growth (high risk, high return)
C. Get a copy of your ID and proof of address verified. Your accountant can do this, as can doctors, teachers, police, lawyers, JPs and others with statutory authority. They basically need to see the original document and then sign the copy to certify it’s legit. You also need to know your IRD number.
D. Sign up. You can do this online with most providers.
If you want Builtin’s help to set up a KiwiSaver account with Booster just get in touch: https://builtin.co.nz/kiwisaver.
* Sorted.co.nz KiwiSaver calculator: https://sorted.org.nz/tools/kiwisaver-savings-calculator