It’s never too early to sign your kids up to a KiwiSaver account, especially when the benefits could add up to tens of thousands of dollars! What’s more, the new KiwiSaver rules coming into effect from 1 April will make their first home purchase much easier.
Let’s look at how $20 a week could grow for a girl born this year. On top of the $1,000 sign-up gift, the Government will contribute 50 cents for every dollar she contributes from the age of 18, up to $521 each year. In a KiwiSaver fund with a rate of return of 7% per annum, her balance will be close to $55,000 on her 21st! She could then withdraw her entire savings (excluding the $1,000 kick start) towards a first home purchase.
Small differences in returns can have a huge impact over time. In the above instance, if the fund earned 10% per year she would have close to $85,000 on her 21st! Actual returns across KiwiSaver funds have ranged from 3%-20% pa over the last five years.
Most people will agree that choosing a suitable fund can be a difficult decision. After all, sorting through the maze of nearly 200 KiwiSaver funds is a daunting task. It’s wise to take some time to find out a little more about the KiwiSaver funds that are on offer.
If you need help, get it from an independent source who has no alignment with any provider, like SavvyKiwi. As the only personalised, independent KiwiSaver fund tracker in New Zealand, SavvyKiwi helps you make the best decisions about your KiwiSaver savings.
