KiwiSaver: The Small Details That Make a Big Difference

When you take a new job in New Zealand, there are two key KiwiSaver details that can quietly shape your whole financial future — and most people don’t think about either of them until it’s too late.

At Windsor Wealth, we see it all the time, and we’re here to make sure you don’t miss out

Know what you’re really getting paid

When an employer says they’ll contribute to your KiwiSaver, you need to check whether that contribution is on top of your base salary, or included within it.

If it’s included, your take-home pay is effectively lower than the salary headline might suggest. This is called a total remuneration approach. It’s completely legal if it’s set out clearly in your employment agreement, but many people miss it and feel caught out later.

I learned this the hard way when I was first offered a job in New Zealand. The salary looked great, and I assumed KiwiSaver was extra but there was a small clause saying the employer contribution would come out of the stated salary. It didn’t feel upfront, and it affected my trust in that company from day one.

The lesson? Always read your employment agreement carefully and ask for clarity before you sign.

Don’t set-and-forget your KiwiSaver

Many people pick a KiwiSaver fund once and never look at it again. But your choice of fund can make an enormous difference to your retirement.

Over the last ten years, the best specialist KiwiSaver providers have returned around 9.8% per year, compared to about 7.3% for the average bank KiwiSaver. A difference of just 2.5% might not feel like much year to year, but over time it’s huge.

For example, a 40-year-old earning $100,000 today with a $50,000 balance could expect retire with about $1,275,000 in a top-performing fund, compared to about $815,000 in a typical bank KiwiSaver. That’s a difference of more than $450,000, with no extra savings, just better performance. Your money could be earning more money for you, or leaving money on the table!

It doesn’t stop when you reach retirement age, either. Your KiwiSaver usually stays invested for decades while you draw an income, so that extra performance keeps working for you when you need it most.