30th June - why do we need to mark it in our calendars?
KiwiSaver is a retirement savings scheme available to New Zealanders, providing an opportunity to build a nest egg for the future with the added benefits of government contributions and potential employer contributions. As we approach the June 30th deadline, it’s important to understand what this date signifies and how you can maximize your KiwiSaver contributions to take full advantage of the available benefits.
What Is the KiwiSaver June 30th Deadline?
June 30th marks the end of the KiwiSaver financial year. This deadline is significant because it is the cut-off date for ensuring that you receive the full government contribution for the year. To qualify for the maximum government contribution into your KiwiSaver fund, you need to make sure you qualify by having contributed the minimum to your KiwiSaver account within the past 12 months.
Maximizing Your Government Contribution
The government provides an annual contribution to your KiwiSaver account, which is a fantastic incentive to save. Here’s how it works:
Contribution Match: The government contributes 50 cents for every dollar you contribute, up to a maximum of $521.43.
Minimum Contribution: To receive the full $521.43, you need to contribute at least $1,042.86 between July 1st of the previous year and June 30th of the current year.
If you haven't met the $1,042.86 threshold yet, you can make a lump sum contribution before June 30th to ensure you receive the full government amount.
Steps to Ensure You Meet the Deadline
To make sure you get the most out of your KiwiSaver account before the June 30th deadline, follow these steps:
Check Your Contributions: Log in to your KiwiSaver account or contact your provider to check how much you’ve contributed so far this year.
Calculate Shortfall: Determine how much more you need to contribute to reach the $1,042.86 target.
Make a Lump Sum Contribution: If you’re short of the target, you can make a lump sum payment before the 30th June each year.
Automate for Next Year: Consider setting up an automatic payment plan to ensure you meet the contribution threshold for the next financial year without a last-minute rush.
Employer Contributions and Voluntary Savings
Also important to remember is the employer contributions and voluntary savings also play a vital role in growing your KiwiSaver balance:
Employer Contributions: By law, employers must contribute at least 3% of your gross salary to your KiwiSaver account if you are contributing. This does not count towards the government contribution threshold but helps increase your overall savings.
Voluntary Contributions: You can make additional voluntary contributions at any time. These contributions can be beneficial for those looking to boost their retirement savings beyond the minimum required for the government match.
Benefits of Meeting the June 30th Deadline
Ensuring you meet the KiwiSaver deadline provides several benefits:
Maximized Returns: Receiving the full government contribution can significantly boost your retirement savings.
Compounding Growth: The earlier your contributions are made, the longer they have to grow through compounding returns.
Financial Discipline: Regularly contributing to your KiwiSaver helps build a habit of saving and planning for the future.
Take the time now to review your KiwiSaver contributions and make any necessary payments to meet the deadline. If you have any questions regarding your KiwiSaver fund, or would like an adviser to have a look to make sure it is the most suitable option for you, feel free to get in touch with us at support@legaseed.co.nz
Legaseed NZ Ltd (FSP1005404) holds a licence issued by the Financial Markets Authority and provides financial advice in relation to financial & retirement planning, investments, KiwiSaver and personal risk insurance. Our disclosure information can be found on our website www.legaseed.co.nz, or is available on request and free of charge.
