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Top KiwiSaver tips for mums

May 9, 2019


Contributor

Written by Contributor


Use your “me time” this Mother’s Day to plan for a better financial future.

From weighing scales to glitter-based cards to handmade chore coupons (why don’t your kids just do the chores anyway?), the list of terrible Mother’s Day gifts is endless.

So, this Mother’s Day, give yourself a gift that won’t disappoint by finding out how KiwiSaver can help you work towards a more secure future.  

The scheme has almost three million New Zealanders investing for a nest egg, and it can be an easy and affordable way to save for retirement.

However, women face extra challenges when adding to their KiwiSaver investment. They may take a career break after having children, they’re more likely to be single parents than men, and they’re coping with a gender pay gap of 9.4 per cent.

But there are simple steps you can take to super-charge your KiwiSaver strategy, whether you’re a stay-at-home mum or one of the country’s 352,700 working mums.

KiwiSaver tips for stay-at-home mums:

  • Make voluntary payments. If you’re not in paid work, if you can afford, you can still make voluntary contributions or pay lump sums into your KiwiSaver account. Make your payments either directly to your KiwiSaver scheme provider or through the Inland Revenue.
  • Claim your free money! For every dollar you put into your KiwiSaver account, the Government will contribute 50 cents, up to a maximum of $521.43. Having children usually brings big changes to the family finances, but if your household budget allows, try to put $1042,86 in your KiwiSaver account to get the full amount from the government. Put another way, that’s about $20 a week to get a 50 per cent return on your investment, every single year. It’s not all or nothing though, if you only contribute $500 during the year, you’ll still get $250 from the Government. Don’t miss out – 30 June is the last day for making contributions for this financial year.

KiwiSaver tips for working mums:

  • Negotiate with your employer before having your baby. If you’ve been able to negotiate a contract to keep being paid while you’re on paid parental leave, your employer will continue to make compulsory employer contributions. If you’re on paid parental leave and aren’t receiving any payments from your employer, your contributions will stop automatically till you’re back at work.
  • Check your contribution rate. KiwiSaver members used to be able to choose whether to contribute 3%, 4% or 8% per cent of their pay to their accounts, but from April 1 they now also have the option of contributing 6% or 10% . If you’re working and you don’t choose an amount, you’ll be paying the default rate of 3%, but the other rates may give you more flexibility over how much and how fast you save.
  • Choose the right fund for your stage of life. The fund that’s best for you is likely to depend on your age, stage and how much risk you’re comfortable with. It can be difficult to predict your future income if you plan to take time out in future to look after your children, but it makes sense to review your KiwiSaver account regularly to make sure you’re in the fund that’s right for you right now.

Happy Mother’s Day! And after you’ve finished sweeping the remaining toast crumbs from your breakfast-in-bed out of the sheets, you might like to check out our online tools and resources to get further tips on how to take control of your KiwiSaver investment.

The information provided is of a general nature only and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any investment decisions.

Tags: KiwiSaver

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