8 KiwiSaver Myths Debunked
KiwiSaver is a great tool to help you save for retirement, but there’s a lot of confusion around how it works. Let's bust some of the most common myths that might be holding you back from getting the most out of your KiwiSaver investment
1. I should stop contributing to my fund when the market drops
It’s tempting to pull back when markets take a dip, but this can actually stunt your growth. KiwiSaver is a long-term investment, so short-term market drops are all part of the journey. Regular contributions, even when markets are down, mean you’re buying in at lower prices—positioning you for growth when things bounce back. Remember: Time in the market beats timing the market.
2. I should choose the provider with the lowest fees
While fees matter, they aren’t the only thing to consider. The right KiwiSaver provider for you depends on more than just cost—it’s about the fund type, investment strategy, and how it aligns with your goals. Low fees can be great, but make sure you’re also getting good returns and the right level of risk for your needs. Like most things in life, you often get what you pay for.
3. I have to stay with my bank
Just because your bank offers KiwiSaver doesn’t mean it’s the best option for you. With over 30 providers, you’re free to shop around and choose a one that matches your goals. Banks main business focus is not KiwiSaver, its deposits and lending. Typically the providers that only focus on investment have the upper hand and provide the best returns.
4. I’ll catch up later
It’s easy to think you’ll just put off saving for retirement and catch up later, but KiwiSaver is all about consistency. The earlier you start, the more time your money has to grow. Don’t delay—every dollar you contribute now compounds to a huge difference in the future.
5. A growth fund is only for risk-takers
Growth funds do carry more risk, but they’re not just for adrenaline junkies. If you’re young or have a long way to go before retirement, growth funds could help you earn more over time. The key is balancing risk with your time horizon. Talk to an expert if you’re unsure where you should be.
6. My KiwiSaver is just a savings account
Think of your KiwiSaver as a long-term investment, not just a savings account. With the right fund choice, your KiwiSaver can grow much faster than a standard savings account, thanks to the power of compound returns. It’s designed to help you save for retirement—not just to sit there.
7. All KiwiSaver funds are the same
Not true! KiwiSaver funds vary widely, from conservative to high-growth options, and each has a different approach to risk. It’s crucial to choose a fund that aligns with your personal risk tolerance, age, and retirement goals. Don’t assume they’re all the same—do your research or ask for advice.
8. KiwiSaver is only beneficial for young people
Sure, starting young gives you more time to benefit from compounding, but KiwiSaver is a great tool for anyone. It’s never too late to start contributing, and even if you’re nearing retirement, KiwiSaver can still help you build a nest egg. Plus, if you’re under 65, the government’s annual contribution is a great bonus.
KiwiSaver can be one of the best ways to save for retirement, but it’s important to understand how it really works. By busting these myths, you’ll be in a better position to make informed decisions and make your money work harder for you. Not sure where to start? Reach out to our expert team, we can point you in the right direction and get you set up with the best fund for your needs.
