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KiwiSaver is a voluntary investment scheme set up by the government in 2007 to help Kiwis save for retirement. The government sets the rules and regulates how KiwiSaver operates, such as the ability to withdrawal for a first home purchase, but does not manage, own, or control the KiwiSaver providers that you invest in. Instead, your money is invested on your behalf by a range of independent licensed fund managers – in fact there are over 30 providers you can choose from!

You can only have a single KiwiSaver provider, though you can switch your provider at any point in time. Most KiwiSaver providers allow you to sign up directly on their website. Each of these providers typically offers at least 3 different investment strategies that you can invest in.

You can choose to contribute 3%, 4%, 6%, 8% or 10% of your gross (before tax) wage or salary to your KiwiSaver account. Your employer has to contribute as well – at the very least 3% of your gross salary.

Along with KiwiSaver employer contributions, there’s an annual government contribution of $521 (more on that soon).

Who can join?

If you’re eligible to permanently live in New Zealand, you can join – you don’t have to sign up unless you want to, but there really is no reason not to open an account. At the very least you want to be getting that $521 every year!

Once you join, your money is not accessible until either you qualify for New Zealand Superannuation (which is currently at 65), or to purchase your first home. There are only a handful of other scenarios in which you can get your money out earlier.

How to join KiwiSaver

Over 3 million Kiwis have already joined KiwiSaver! If you are new to the workforce, or are self employed (an area where KiwiSaver participation is much lower), then there are three ways to join:

  • Automatic enrolment when starting a new job

  • Opting in through your employer

  • Opting in through a KiwiSaver provider – just reach out to a provider that suits and get started.

Benefits of KiwiSaver

The question of signing up to KiwiSaver is less ‘why’ and more ‘why not?’ because of the benefits it offers.

  • KiwiSaver contributions come out of your pay before you see it. This makes saving easy – just like our suggested Pay Yourself First budgeting rule.

  • If employed, your employer has to contribute at least 3% of your gross wage or salary into your KiwiSaver account. That’s on top of your own contributions.

  • The government pays into your KiwiSaver account as well – an annual government contribution (if you are a contributing member aged 18 or over) of up to $521.

  • As well as saving for retirement, you can also use KiwiSaver for buying your first home through a first home withdrawal and eligibility for a First Home Grant

  • If you change jobs or leave the workforce your KiwiSaver account moves with you.

  • If you experience significant financial hardship it is possible to access the funds in your account early. But the threshold is high to ensure you are not denying future you, for something you can budget out of.

  • Once you’ve joined, you can make voluntary contributions (lump sums or regular automatic payments) at any time, either directly to your KiwiSaver provider or through Inland Revenue.

Choosing the right KiwiSaver investment

There are literally hundreds of KiwiSaver fund options you can choose from, offered by over 30 different providers. So how do you choose the right KiwiSaver fund for you?

There are three parts to setting up, and maintaining, a successful KiwiSaver strategy:

  • Picking the right fund for your personality – do you mind the ups and downs

  • Picking the right provider for your objective

  • Don’t touch it! – this last one is the easiest in theory, but can also be the hardest

Picking the right fund

Risk is a scary word for many people, particularly when mentioned in the same sentence as ‘your future lifestyle’.

What should you care about as an investor when it comes to risk?

Most KiwiSaver risk (there are only a few concentrated exceptions) is the risk of volatility. That world events and unpredictable economic cycles mean the balance has recently fallen just when you need to spend it. Risk is only ‘bad’ if it worries you or if you’re not generating enough returns for the risk you’ve accepted.

The theory goes that the higher the return you are after, the more risk you are willing and will have to take. The more volatility you can accept in the short term, the greater the expected return in the long term. Cash has the lowest risk, therefore the lowest expected return. Of the four major asset classes (cash, bonds, property, shares), shares have the highest risk and the highest expected return.

A greater risk, is that by being over-conservative you miss out on growth on an investment you can’t spend for a long time.

As an investor you are often asked to assess your “risk profile” and given a simple misleading label like ‘balanced’ or ‘aggressive’ investor. The idea is that if you aren’t comfortable with riding the ups and downs of the market (the volatility), then you will need to be in a fund that has a higher amount of cash or bonds which helps smooth this out – such as a balanced or conservative fund.

Now while we personally don’t think this approach to risk profiles is very good, as most people tend to just go with whatever sounds the safest – or the one in the middle, it is worth knowing your risk profile as most KiwiSaver funds are labelled with these same names based on what percentage of growth investments they hold, like shares and property.

The common range of fund categories are:

Type of fund

Risk profile


Low risk


Low to medium risk


Medium risk


Medium to high risk


High risk

In determining which of the fund categories is best for you, then you need to understand when you are likely to want to use your KiwiSaver.

The longer until you’re able to access your KiwiSaver the more risk you can generally afford to take with it. You’ll have more time to give the market a chance to recover from any potential downturns that happen while your money is invested.

The simple principles are:

  • If you expect to use your KiwiSaver investment soon (e.g. purchase a house soon) you shouldn’t take as much risk as if there is a market downturn it will have a significant impact on the balance you have available – you will want to consider conservative or balanced funds.

  • If you are saving for retirement and have 10, 20, 30+ years to go, you can afford to take a significant amount of risk as the value of your investments will have time to recover if there is a significant market downturn. The higher returns will outweigh the downside risk of a market downturn (so predominantly growth assets)

Many Kiwis don’t know what category their KiwiSaver balance is in, and those that have not changed KiwiSaver funds or providers since launch are likely to be sitting in a fund that is too conservative – which for a large portion of us with plenty of time until retirement may mean we are missing out on a substantial amount of future returns.

So take 5 minutes to check your current fund. have some useful resources to help you work out your risk profile and find a KiwiSaver fund that matches.

Still unsure about picking the right KiwiSaver fund?

Then be sure to listen to our podcast below, which gives an overview of the above.

Picking the right KiwiSaver Provider

Now that you know what category of fund you should be investing in, you can select a KiwiSaver provider.

With any investment you will often see a disclaimer along the lines of “Past performance is no guarantee of future results”. This is true. Do not pick a fund manager based only on their historical returns!

What you want to focus on are the things that are controllable and align with what is important to you. This includes:


In our view, low fees are important. Your investment performance will fluctuate, and funds will have periods of strong performance and weak performance, but fees will always be a constant and they increase as your KiwiSaver balance grows. In thinking about the fees you need to consider a few different components:

  • Management fee – most funds will charge a management fee based on the assets in your KiwiSaver account. The average KiwiSaver growth fund fee is 1.19%. There are several providers offering below 0.50% – this makes a big difference in long term expected returns.

  • Administration fee – many funds will charge an administration fee to recover some of the fixed costs of administering your account. These fees average $27 per member per year, though can range from $0 all the way up to $49.80 for some providers.

  • Performance fee – some funds may have a performance fee. If the fund performs above a certain threshold then a portion of the return is given to the manager as a performance fee. This can make a significant difference and are only charged by active fund managers. 

Other considerations:

  • Does the provider offer helpful advice and information, directly or through their website?

  • Do you understand the information you’re receiving? If not, consider moving to a provider that can explain things in a way that makes sense.

  • Do you understand the manager’s investing approach? Does it make sense and give you a good idea of where your money is invested and why?

  • If it’s important to you, are ethical/socially responsible investment options available through the provider? Or does the provider take an ethical approach in their investment choices? Are their “ethics” the same as yours and can they explain them?

  • Can you make additional lump sum or regular contributions to your fund and, if so, is there a minimum amount?

  • Does your provider offer other features, such as a fund in which risk is adjusted with age, or a fund that invests widely around the world?

  • Some providers use separate companies to manage their investment funds. Do you know of the organisation(s) named as managers and/or investment managers and have confidence in them?

You can switch to another fund offered by the same provider, for example, from a Growth or Balanced fund to a Conservative fund. Often this is easily done online either through your provider’s portal itself or by sending your provider an email.

You can also transfer to another provider by signing up with them directly. Your new provider will take care of the transfer process for you and inform you when it’s done. There is no need to get in touch with your old provider.

Note: It can take a couple of weeks for the switch between providers to take effect.

Don’t touch it!

Once you’ve reviewed what fund category is right for you, found a provider that suits your needs, and put this into action, then the next part is easy – don’t touch it! This is the key to making your KiwiSaver a success.

As your balance grows, it can become tempting to fiddle with your account. When global stock markets crashed in March 2020 due to the initial fears about COVID-19, we saw far too many KiwiSaver investors, who likely have decades before they will access their balance, switch out of Growth funds and into Cash. This panic response will have damaged the long term returns of these investors, as the market recovered and they remained sitting in cash.

While it is tempting to try and time the market, don’t! Let your KiwiSaver do its thing, and check it once a year – if that. The only time you need to change is if your personal circumstances have changed.

Free Money!

Earlier we mentioned the government contribution of $521 to your account each and every year. As is normally always the case, there is no “free lunch”. However this as close as you will get to free, and is one of the best returns you can make anywhere – with no hooks!

So how do you claim your free money?

To get the Government contribution all you have to do is be a member and contribute at least $1042.86 of your own money between 1 July to 30 June each year. It’s that simple – contribute up to $1,043 in a year, you will get an additional $521 free money! That’s a 50% return on that investment.

Everybody in KiwiSaver needs to ensure that you claim this. If you get to June and you haven’t reached the $1,043 contribution, then make a one-off payment to the IRD or KiwiSaver provider to ensure you claim the full amount.

When can you access your investment?

KiwiSaver has been designed to help fund your retirement and to help you get into your first home. You can only withdraw your funds when you turn 65. But in certain circumstances you might be able to get your money out earlier if you’re buying your first home, leaving the country for good, or if you’re in financial hardship or seriously ill.

Kernel’s Top KiwiSaver Tips:

  • KiwiSaver rules are set by the government, but the funds are run by independent licensed fund managers

  • Work out your risk profile – this will tell you what funds you should consider.

  • Do you have 10+ years before you will be accessing the money, then you should be considering funds that have a high portion of shares, such as Growth funds.

  • Check what fund category you are already in – is it Conservative, Balanced, Growth etc

  • Check out the resources on the website

  • Once you are in the right fund category, don’t switch unless your personal circumstances have changed!

  • Make sure you contribute at least $1,043 before 30 June each year to get your $521 government contribution.

The Kernel KiwiSaver Plan

In 2022 we launched the Kernel KiwiSaver Plan, a low-fee KiwiSaver ​Plan offering designed to suit your goals.

You can choose between the Kernel Cash Plus, Kernel Balanced and Kernel High Growth Funds and work towards your short, medium or long-term goals. With the added benefit of low management fees at 0.25% p.a., the Kernel KiwiSaver Plan is suitable for those who are looking to get the most out of their KiwiSaver balance, without it costing a fortune.

One of the ​noteworthy aspects of the Kernel KiwiSaver Plan is that you can also choose to create your own custom KiwiSaver Plan using a mix of several Kernel funds.

Stephen Upton

Stephen Upton

Chief Operating Officer



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Indices provided by: S&P Dow Jones Indices