Your Path to Becoming a KiwiSaver Millionaire

The dream of a million-dollar retirement balance is not just for the privileged few—it is now a highly achievable reality for the majority of young Kiwis.

At Advice Knight, we don't view KiwiSaver as a simple savings vehicle; we see it as one of the most important investments you will make in your working life. To reach the coveted seven-figure mark, you need to treat it with the care and strategy of a significant investment portfolio.

Projections show that young New Zealanders today are highly likely to amass KiwiSaver balances exceeding $1 million. The formula for success boils down to harnessing three key assets: Time, Aggression, and Consistency.

1. Harness the Power of Time and Compound Interest

Your greatest ally in KiwiSaver is time. It allows the "eighth wonder of the world"—compound interest—to work its full magic.

For example, an 18-year-old earning $65,000 who consistently contributes 3% (plus their 3% employer match) is forecast to hit the $1 million mark by their mid-50s.

The longer your money is invested, the more time it has to earn returns that then earn more returns. Starting early significantly reduces the pressure on you to make massive contributions later in life.

2. Choose Aggression When It Counts

If retirement is still decades away, you have the ideal timeframe to embrace risk. This means you should almost certainly be in an Aggressive Fund.

While these funds experience greater short-term volatility, they are positioned primarily in high-growth assets like global and local shares. Historically, these asset classes deliver the superior long-term returns needed to rapidly grow your balance and overcome inflation.

Trying to reach $1 million in a conservative fund is akin to fighting a dragon with a toothpick—it simply won't generate the necessary growth.

3. Boost Your Armour: Consistent Contributions

While fund choice sets the trajectory, your contribution rate is the fuel.

• Maximise the Match: Ensure you are contributing enough to receive the maximum annual Government Contribution (currently $521.43).

• Increase Your Rate: If financially possible, lifting your contribution rate beyond the minimum 3% is a game-changer. A 30-year-old starting from zero, for instance, could reach the $1 million goal by their early 60s by lifting their contribution rate to 8%.
  

Ready to Conquer Your Retirement Goal?

The path to becoming a KiwiSaver millionaire is clear: start early, contribute consistently, and be aggressive.

However, here is the crucial caveat: not all KiwiSaver aggressive funds are considered equal.

The performance, fees, ethical considerations, and specific underlying investments within aggressive funds vary dramatically between providers. Choosing the right aggressive fund for your specific financial plan and goals can make a difference of hundreds of thousands of dollars by the time you retire.

Don't leave your seven-figure future to chance.

Get in touch with Advice Knight today to discuss the right aggressive fund for you. Click here to start your KiwiSaver Investment review underway or email us at team@adviceknight.co.nz