The cost of living is hitting New Zealanders in the pocket, with interest rates and the price of everyday expenses continuing to rise. So for many, saving for retirement seems unrealistic, especially if retirement feels like a long way off.

However, contributing to KiwiSaver over the long term is important to ensure you’re able to grow your retirement savings over time. Even when times are tough it’s important to ensure you’re making the most of KiwiSaver in order to reach your long term savings goals.

Here are 5 ways to start making the most of KiwiSaver when the cost of living is increasing:

1. Check you’re contributing enough 

Contributing enough to get the government contribution is one of the best ways to make the most of KiwiSaver and grow your savings.

If you’re eligible and contribute at least $1,042.86 of your own money between 1 July to 30 June each year you’ll receive the full government contribution of $521.43. To ensure you’ve contributed enough, check ahead of 1 July 2023, and you can make a voluntary contribution through the IRD or your provider.

2. Choose a fund that suits your needs

If you were automatically enrolled in KiwiSaver through your employer and never actively chose which fund to be in, it’s likely you’re in a default scheme which is typically conservative with lower potential returns. However to make the most of KiwiSaver it’s important to consider your fund and the associated potential investment returns.

KiwiSaver schemes have a variety of funds with different amounts of risk and differing potential returns. A Haven Adviser can help you ensure you’re in the most appropriate fund for your life stage and risk profile with potential returns that align with your expectations.

3. Keep an eye on your fees

All KiwiSaver funds charge fees, but some are more expensive than others. When money is already tight it’s important to make sure you’re aware of the fees associated with a fund and consider switching to a lower-cost option if necessary. Get in touch with a Haven Adviser to chat through your options.

4. Have a plan for your retirement

KiwiSaver is designed to help fund your retirement, so it’s important to think about how much you’ll need to live on in the future. Especially when the cost of living is rising, you may need more than you originally thought. You can use our online tool to see what your projected savings could look like based on your rate of contribution.

5. Stay informed

Keep up-to-date with the latest news and changes in KiwiSaver legislation. This’ll help you make informed decisions about KiwiSaver.

So how can a Haven Financial Adviser help? 

Making the most of KiwiSaver doesn’t have to be DIY. Like any investment, doing your research and seeking financial advice can help you make the most of KiwiSaver, even during the cost of living crisis.

If you’ve never sat down with us to make a plan for your retirement savings, a Haven Financial Adviser can help you take into account the current constraints on your household budget and help you make a plan for the future. Get in touch today to get on the right track to make the most of KiwiSaver.

Over the past year we’ve heard plenty about increasing inflation and certainly felt the pressure of increasing costs as well. We’ve also seen in the news the Reserve Bank’s attempt to curb inflation with six Official Cash Rate increases since May 2022 rising from 2.00% to 5.25%. This has driven the Banks to increase their lending rates from record lows, to a very challenging current setting, with now best in market 1 year fixed rates nearing 7% p.a.

But all that may have you wondering, what does it really mean for my actual mortgage repayments? Especially if you have a fixed rate expiring, are looking at refinancing or are considering purchasing property soon.

Understanding the potential impacts of increasing interest rates on your mortgage repayments and subsequently your household budget, will help you get prepared now. It will also help you to make an informed decision about any changes you may wish to make to your mortgage going forward.

The tables below show the approximate monthly mortgage repayment on a 30 year term.

So, for example, if a borrower has a $500,000 mortgage with a 4.00% interest rate, their monthly repayments would be around $2,387. If interest rates increase to 7.00%, their monthly repayments would increase to around $3,327. Or, if a borrower has a $1,000,000 mortgage with a 4.00% interest rate, their monthly repayments would be around $4,774. If interest rates increase to 7.00%, their monthly repayments would increase to around $6,653.

Feel free to jump onto our Mortgage Calculator, to see how your new repayments could look, alongside your potential new rates – see latest banks rate here (source interest.co.nz).

Here are our tips for how to calculate your approximate repayments using our Mortgage Calculator:

Tip # 1: When trying to work out what your approximate repayments may look like, following a fixed rate change, insert the following variables via our Mortgage Calculator:

Tip # 2: Bank Economists are generally projecting 1 more OCR rise, to 5.50%, which may push floating and 1 year rates higher still. Longer term fixed rates (less than 2 years) are widely expected to not go higher, and generally now have a future negative bias (source: Westpac Weekly Commentary).

So how can a Haven Mortgage Adviser help? 

If you’re worried about paying higher interest rates on your mortgage, a Haven Mortgage Adviser can help you take control of the situation. By quickly reviewing  your current and impending financial position and assessing your general affordability profile, all whilst possessing a comprehensive view of the wider market. Amidst all these variables, our team can make recommendations about how you can best manage your mortgage.

Whether through a restructure, refinance or refix there are options to help you get through rising repayments. Contact a Haven Mortgage Adviser today, to take control of your home loan and your budget!