If you’re already a KiwiSaver member and making regular contributions, you’re off to a great start. But if you’re keen to really take your savings to the next level, then read on. The good news is, you don’t have to be an investment guru to get your money working harder.

Many people think of their KiwiSaver account as a savings fund. That’s true, but it’s equally an investment fund. What may surprise you is that over your working life the investment returns your KiwiSaver provider delivers will likely become the biggest chunk of your balance at retirement. Take a look at the chart below. You’ll see your investment returns add up to significantly more than all the contributions you, your employer and the Government combined will make.

Investment returns will likely make up the bulk of your KiwiSaver balance

This graph shows a hypothetical investment and is meant for illustrative purposes only. Past performance is not a guarantee of future performance. See graph assumptions here.

Another key thing to understand with investment returns is how even a small increase can significantly impact your account growth over time. Check out the graph below and see how just a 1% increase creates considerably more savings by retirement. This is the power of compounding interest – when you earn investment returns on top of your previous investment returns.

A little extra return, can go a long way

This graph shows a hypothetical investment and is meant for illustrative purposes only. Past performance is not a guarantee of future performance. See graph assumptions here.

So, what you need to ask yourself is, are you in the right type of fund – e.g. conservative, balanced, or growth? And is your provider delivering good returns?

Being in the right type of fund is crucial to your KiwiSaver success because different types of funds are designed to deliver different returns and risk. For example, a growth fund sets out to generate better returns over the long term than a conservative fund. It does this by investing more of the fund in riskier assets like shares and property and less of the fund in lower risk assets like cash and bonds.

If it’s a while before your retirement, say 10 years or more, if you’re not planning a first home withdrawal and you understand that investments can go up and down, then it’s worth considering a growth-oriented fund. If you’re unsure which type of fund is right for you, most KiwiSaver providers have a risk profile tool on their website which can help you work this out.

Once you’re in the right type of fund, it pays to compare the different KiwiSaver providers that are out there. Some have delivered better returns than others. If you look at the chart below, you can see how our performance stacks up next to others in the latest Morningstar KiwiSaver Survey from December 2019.

Milford #1 in 10-year KiwiSaver Growth Fund performance

Data sourced from Morningstar KiwiSaver Survey December 2019. Returns are after fees and before tax. Please note past performance is not a guarantee of future performance.

What has made Milford such a consistently solid performer? Quite simply, we have one of the largest and most globally-experienced investment teams in New Zealand. We’re out there searching for the right investment opportunities while always carefully managing risk. Having this investment expertise applied to your savings can give you an edge.

But it’s not only about investment returns. When you invest with Milford you’re choosing a NZ-owned provider that Consumer NZ ranked number one for KiwiSaver customer satisfaction. You’re also supporting the local community, you’re investing responsibly and you’re getting peace of mind because all Milford employees invest their own retirement savings in Milford’s Funds – right next to yours.

So, if you want to get your savings working hard while also supporting New Zealand – why not join Milford’s award-winning KiwiSaver Plan right now?

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