Should I contribute more than the "minimum" to KiwiSaver?


If you contribute to KiwiSaver, you're probably eligible for some valuable benefits. If your employer co-contributes (usually up to 3% of your salary), that's free money. If you contribute $1,043, the Government will kick in $521. 

However, the tangible benefits largely stop there. 

And there are disadvantages of investing in KiwiSaver. Namely, with limited exceptions, you can't access these funds until you reach your mid- to late-sixties.

But I'll tell you a secret. My wife contributes 8% of her income to KiwiSaver. Even though she'd maximise the benefits of contributing if she contributed just 3%. 

(I'm setting up a new business, so I'm capping my contributions at $1,043 per year until my income gets back to a "normal" level. But in past roles I have contributed the maximum as well, and in future years I'll start contributing more again.)

So why does a financial adviser and the wife of a financial adviser contribute so much to KiwiSaver?

Behavioural reasons, my dear Watson. Behavioural reasons.

Do you want to know the secret to dealing with temptation? 

It's better to avoid temptation than resist it.

You don't spend money that never ends up in your bank account. You don't miss income that you never received in the first place. 

We're in a fortunate situation where we can do without the 5% of our income. We don't miss it.

But making this small decision - which involves little more than filling in a form or two - will mean our KiwiSaver balances will collectively be worth hundreds of thousands of dollars more than they would have been, had we contributed the minimum to maximise our benefits. 

When it comes to finances, inertia usually works against us. In this case, inertia can work for you.

If you're not in that position yet, you may be in the future. When your income increases, whether through raises or by taking on new roles, consider increasing the proportion of your income you contribute to KiwiSaver.

You won't get any benefits from the Government or your employer. You're subject to some pretty big disadvantages, like not being able to access the money.

But you get the benefit of knowing that when you reach the age when you can access it, the amount in your KiwiSaver balance is going to be substantially higher than it would have been.

If you're a Vulcan, or a purely rational human being (ha!), then contribute the minimum to KiwiSaver to get the benefits. If you're a standard-issue human being, and you're not living payday to payday, then consider increasing your contributions to KiwiSaver. 

You'll probably be glad you did. 

Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.