MAXIMISE YOUR MONEY
5-DAY CHALLENGE
SORTED MONEY MONTH
1 – 31 AUGUST 2023
Maximise your money in your 40s: 14 – 18 August
Day 5: Prioritise retirement contributions
In your forties, it’s important to begin thinking about your retirement plan and ramping up your retirement contributions if you can. Take advantage of your earning potential and maximize contributions to retirement accounts. You’re still several years away from retirement and so taking advantage of the power of compound growth can set you up for a financially secure future.
Challenge yourself to better plan for your retirement with these top tips from Financial Advice New Zealand’s CEO, Katrina Shanks:
Maximise on employer contributions
In your forties, you’re likely starting to reach your full earning potential, so take advantage of your higher salary and consider contributing the maximum amount allowed into your KiwiSaver. This is particularly beneficial if your employer is willing to match your contribution.
Make voluntary contributions
Did you know you can also make voluntary contributions to boost your KiwiSaver and retirement savings? If you receive extra income, such as a bonus or inheritance, consider contributing a portion of it to your KiwiSaver or other retirement accounts. Voluntary contributions can accelerate the growth of your retirement fund and help you achieve your financial goals sooner.
If you took time off from work for any reason, perhaps for starting a family, consider leveraging catch-up contributions to make up for any gaps in previous years’ savings.
Review your KiwiSaver fund
In your 40s, it’s crucial to review your KiwiSaver fund to ensure it aligns with your risk tolerance and retirement goals. Different funds offer varying levels of risk and return potential. If you have a higher risk tolerance and are comfortable with market fluctuations, you may consider an aggressive growth fund. Conversely, as you near retirement and you’ll be looking for stability and less risk of losing capital, so a conservative or balanced fund might be more suitable.
Consider other retirement savings options
While KiwiSaver is a great retirement savings tool, it may not be the only one that fits your needs. Explore other options, such as a personal retirement savings plan or a managed fund, to complement your KiwiSaver contributions. Diversifying your retirement savings across different platforms can provide additional flexibility and potential for growth.
Taking proactive steps now to prioritise retirement contributions can help secure your financial future and an enjoyable retirement. Retirement planning can be complex so consider seeking professional advice to help you create a personalized retirement strategy that aligns with your goals, risk tolerance, and financial situation.
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