The end of June is approaching which means the Government is about to pay $521.43 into eligible KiwiSaver accounts.
If you are aged between 18 - 64 and have contributed at least $1042.86 of your own money to your KiwiSaver fund since July 1 2022, you will be eligible for the full Government contribution.
If you haven’t contributed to this level, you only have until June 30 2023 to do so.
The Government contributes $0.50 for every $1 that you save – to a maximum of $521.43. If you have contributed less than $1042.86, the Government contribution is adjusted accordingly.
Financial advisor and KiwiSaver expert Adam Stewart told 1News $521 may not seem like a lot, but it can actually go a long way in growing your KiwiSaver.
"The future value of the free $521.43 KiwiSaver contribution to a 25 year old, invested at 7.5% per annum, at age 65 is $9,408.81 and the future value of the free $521.43 KiwiSaver contribution to a 40 year old, invested at 7.5% per annum, at age 65 is $3,179.86.
"These examples highlight the power of compounding returns and the missed opportunity when failing to maximise the government contribution."
He also said if you haven't contributed $1042.86 in the past financial year and can't afford to top up the full amount, it's still worth contributing some money if you can can.
"If you cannot afford to contribute the full amount you can contribute a smaller amount like $100. As the government contribution is pro-rated then the government will contribute $50 into your KiwiSaver account. Do what you can afford to do."
The IRD website will tell you how much you have contributed to your KiwiSaver in the past year. From there, you can work out how much still needs to be contributed (if any) to reach $1042.86.
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