Here are six of the most common myths about KiwiSaver – we’ve busted every one of these to make sure you’re getting the right information about KiwiSaver and how it can benefit you.
Myth #1: I can lose all of my money
Many people believe that if your provider goes bankrupt or runs into serious financial trouble that you can lose all of the savings in your fund. This isn’t true – the cash in your KiwiSaver fund is typically spread out across many diverse investments. Of course some won’t do too well, but others will flourish, so it’s more about how much your investment goes up and down with any market changes rather than the possibility of losing all your money.
Myth #2: I can never get my money back out of KiwiSaver
By now, we should know that this just isn’t true. Of course the savings are specifically for retirement, but there are circumstances where it can be withdrawn earlier for buying your first home or during times of hardship. And when you reach your retirement age, you can absolutely take advantage of your savings – that’s the point!
Myth #3: If I die, the money will go back to the government
This is definitely not the case – as it’s your money, it becomes part of your estate, just like everything else you own. If you have a will set up, you can dictate where your KiwiSaver money goes, whether that’s to a family member or a charity of your choice.
Myth #4: If I’ve already signed up then I’m sorted
Many people think that once they’ve signed up to a particular fund with a particular provider, they don’t need to worry about it again. This isn’t really true if you want to make the most out of your KiwiSaver. It’s a good idea to review your current scheme every now and then to see where you can update it as people’s situations change all the time – you may be able to increase your contribution rate or get better returns from a different fund.
Myth #5: It doesn’t really matter what fund I am in
Again, if you want to make KiwiSaver work the best it can for you, you’ll need to take a look at the different types of funds to see how they compare – choosing certain funds can mean that it’s possible to double the amount you currently have in your overall savings.
Myth #6: I don’t need to think about KiwiSaver until I’m older
This is a very common way of thinking for most young people, but the entire point of KiwiSaver is to start saving when you’re younger to ensure that you have enough money to sustain your retirement. The sooner you start, the more you’ll have at the end of the day when you need it most.
There is no one size fits all approach to KiwiSaver so do a bit of research or talk to a financial adviser to explore the options you have – you might be surprised how much more you can save just by making some small changes!
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