How much should I put into KiwiSaver?

It can be tricky to work out how much of your pay you should contribute to your KiwiSaver account. Too little and you won’t reach your goals. Too much, and you might struggle to live. Here are some tips to help you decide.

You can contribute 3%, 4%, 6%, 8% or 10% of your pay. If you’re employed and signed up to KiwiSaver, this contribution comes out of your pay before the money arrives in your bank account.

You’ll probably start on 3%, because that’s the default amount people usually start on when they join. Before you decide to increase the percentage, think about whether you can afford it:

  • Do you have consumer debt to pay off (credit cards or personal loans)?
  • Do you have spare money for emergencies?
  • Do you have a mortgage?
  • Are you self-employed?

Consumer debt

If you have consumer debt, like a credit-card balance or personal loan to pay off, tackle this first before increasing your KiwiSaver contributions.

That’s because on consumer debt, you’re likely to be charged an interest rate higher than the rate of return you’d reasonably expect on your KiwiSaver. So reducing your debt is actually a better investment than KiwiSaver.

Have an emergency fund

Remember, once you’ve put money into KiwiSaver, it’s locked in. You can usually only get it out to buy your first home, or when you turn 65. You might be able to use some of it if you’re in serious financial hardship, but you must prove you’re in a bad way and it takes time to get out.

You can’t use your KiwiSaver money for unexpected things like a doctor or vet, or car repairs. So, before you contribute more to KiwiSaver, make sure you have several thousand dollars put aside. If that goal’s too high, aim for $500 first. 

How much can you afford?

Because your money’s locked into KiwiSaver, make sure you’ll have enough money left to cover your normal expenses and any savings, say for a car or holiday.

Don’t get into debt to make KiwiSaver contributions. 

Do you have a mortgage?

Most financial advisers say if you have a mortgage, it’s a good idea to tackle that first before putting extra into your KiwiSaver account. Again, because the interest rate on the mortgage could be higher than the likely return on your KiwiSaver (especially after fees).

Ideally, you’ll still put the minimum 3% into your KiwiSaver account, to receive the employer and government contributions. But it’s probably better to reduce, and preferably eliminate, your mortgage before contributing more than 3% to KiwiSaver.

A financial adviser can help you compare your mortgage interest rate with the rate of return you might get from your KiwiSaver account, and see what’s best for you.

Are you self-employed?

If you’re self-employed, KiwiSaver requires more effort – and you don’t get employer contributions.

But it’s still worth it, both as a savings plan, and to get free money from the government.

It’s a good idea to make sure you’re contributing enough by 30 June each year ($1,042.86 a year, or about $20 a week) to get the full annual government contribution of $521.

Look at making this contribution fortnightly or monthly, rather than having to find $1,042.86 by the deadline.

Changing your contribution rate

If you pick a higher rate, give yourself time to see if you feel comfortable with the change. You might not even notice the extra money coming out of your account, but if you’re struggling, you can change it – but only once every three months.

Voluntary contributions

Better still, if you don’t want to commit to three months at a higher contribution rate, you could just make voluntary contributions.

Contact your provider to find out how to put more money into your KiwiSaver account – it should be easy. You could make extra deposits randomly, or set up an automatic payment from your bank account of, say, $5 extra a week.

All this extra money will grow your KiwiSaver balance, which helps you have a brighter financial future. 

Information correct as at January 2020. Pie Funds Management Limited is the issuer and manager of the JUNO KiwiSaver Scheme. Click here for our Product Disclosure Statement. Any advice is given by Pie Funds Management Limited, and is general only. It relates only to the specific financial products mentioned and does not account for personal circumstances or financial goals. Please see a financial adviser for tailored advice. You may have to pay product or other fees if you act on any advice. As manager of the Scheme we receive monthly fees that are determined by your balance and whether you are 13 years or over. We will benefit financially if you invest in our products. We manage any conflicts of interest via an internal compliance framework designed to ensure we meet our duties to you. For information about the advice we can provide, our duties and complaint process and how disputes can be resolved, visit All content is correct at time of publication date, unless otherwise indicated. Past performance is not a guarantee of future returns. Returns can be negative as well as positive and returns over different periods may vary. Please let us know if you would like a hard copy of this disclosure information.