How much should you contribute?

How much should you save for retirement? The sooner you start saving, the better off you could be. But as long as you're under 65, it's never too late to join a KiwiSaver scheme. See how time can have a big impact on your investment - and how small extra contributions could make a difference to your future.

Make bigger contributions

This shows how a small difference in contributions can make a big difference over time.

Case study 1

Three friends join KiwiSaver when they are 35 years old and they are each earning a salary of $45,000. Jason contributes at the minimum rate (3% of his gross salary or wages), Sami contributes at a rate of 4% and Warena at a rate of 8%. The graph shows how their savings could grow over 30 years.

Note: This is an example only, based on simulated figures. The figures are based on a joining date of 1 June 2015 and an assumed return of 5% per year after management and supervisor fees, expenses and tax (at a prescribed investor rate of 17.5%). The figures also assume monthly administration fees of $2.25 are then deducted. The graph assumes no increase to salary during the period, and an employer’s superannuation contribution tax rate of 17.5%. The graph assumes continuous eligibility for member tax credits (calculated at 50 cents for every $1 each member contributes, up to a maximum member tax credit of $521.43 per year). The graph also assumes no withdrawals are made and no contribution holidays are taken. The end figures shown in this example do not take into account the effects of inflation (which means they are not shown in today’s dollar terms). These figures are rounded to the nearest $1,000.

The results are illustrative only, do not reflect actual returns and are not predictions of future returns (which are subject to investment and other risks, including loss of income and principal invested). No amount of return is promised or guaranteed. Returns can be positive or negative, and will vary over different periods depending on the investment performance of your chosen fund or funds.

Conditions apply to the KiwiSaver savings benefits and they may change in the future. Generally, up-to-date details are available at www.kiwisaver.govt.nz.

Start contributing sooner

By starting to save early, you can benefit from earning returns on your returns. This example shows why it's a good idea to start making contributions to KiwiSaver as soon as you can.

Case study 2

Both James and Sarah invest $2,000 a year for 22 years.

Sarah is 21 and initially invests $2000 into her KiwiSaver scheme. She invests another $2000 every year until she turns 43.

James is 43 and also invests an initial $2000 into his KiwiSaver scheme. He adds $2000 a year until he turns 65.

Because Sarah started earlier, her investment has had longer to benefit from compounding returns.


Note: This is an example only, based on simulated figures which assume a return of 5% a year after tax (at a prescribed investor rate of 28%), management and supervisor fees, and expenses. The figures also assume monthly administration fees of $2.25 are then deducted. It includes member tax credits of $521.43 a year for the years that Sarah and James are contributing to KiwiSaver. The figures are based on a joining date of 1 June 2015 and assume no withdrawals, continuous annual lump sum contributions and no employer contributions. The results are illustrative only, do not reflect actual returns and are not predictions of future returns (which are subject to investment and other risks, including loss of income and principal invested). No amount of return is promised or guaranteed. Returns can be positive or negative, and will vary over different periods depending on the investment performance of your chosen fund or funds.

The end figures shown in this example do not take into account the effects of inflation (so they are not shown in today’s dollar terms). These figures are rounded to the nearest $1,000. 

Conditions apply to the KiwiSaver savings benefits and they may change in the future. Generally, up-to-date details are available at www.kiwisaver.govt.nz.

Catching up

As long as you’re under 65, it’s never too late to join KiwiSaver. Even if you don’t have long before retirement, the incentives of KiwiSaver can boost your savings so you could have a reasonable amount of money when you retire. Here’s an example.

Case study 3

Alex is 50. He earns a gross salary of $50,000 a year, and contributes an amount equal to 8% of that salary to KiwiSaver each year, until he reaches 65:

Note: This is an example only, based on simulated figures. It is based on a joining date of 1 June 2015 and an assumed return of 5% per year after management and supervisor fees, expenses and tax (at a prescribed investor rate of 28%). The figures also assume monthly administration fees of $2.25 are then deducted. The graph assumes no increase to salary during the period, and an employer’s superannuation contribution tax rate of 17.5%. The graph assumes continued eligibility for member tax credits (calculated at 50 cents for every $1 contributed, up to a maximum member tax credit of $521.43 per year). The graph also assumes no withdrawals are made and no contribution holidays are taken. The end figures shown in this example do not take into account the effects of inflation (which means they are not shown in today’s dollar terms). The figure is this graph is rounded to the nearest $1,000. 

The results are illustrative only, do not reflect actual returns and are not predictions of future returns (which are subject to investment and other risks, including loss of income and principal invested). No amount of return is promised or guaranteed. Returns can be positive or negative, and will vary over different periods depending on the investment performance of your chosen fund or funds.

Conditions apply to the KiwiSaver savings benefits and they may change in the future. Generally, up-to-date details are available at www.kiwisaver.govt.nz.