With the pandemic, global conflict and the cost-of-living on people's minds, it is easy to put KiwiSaver into the "too hard basket", a market regulator believes.
"It's like the ostrich effect," says Tammy Peyper, Manager of Investor Capability at the Financial Markets Authority (FMA). "We either won't look at our statements in a desperate bid to put off what we think could be bad news or we under-estimate our ability about what to do with the information.
"It's a completely normal reaction and, given recent events we may be more tempted than usual. But there is power in knowledge and KiwiSaver is going to be a good news story for New Zealanders in the future, providing they are making regular contributions."
Around June every year Kiwis receive their KiwiSaver statements by post or email and Peyper says it is a great time for people to check them to make sure they are on track with their goals, whether it be buying a first home or retirement.
"Rather than ignore it, look at it because it contains a lot of important information about how your fund is behaving," she says.
Because many New Zealanders are feeling the pinch with a higher cost of living and interest rates on the rise, Peyper worries that for some, KiwiSaver won't feel like a priority right now."
"We want to prompt people to take a look at what KiwiSaver is going to be worth to them at retirement age - and use the information to make more informed choices about the steps they can take today to maintain or improve their financial position in the future.
"By checking things like your current balance, projection at retirement, fund type, contributions and fees, you can make your money work harder for you and build a bigger nest egg for the future. All this information is in your statement."
Peyper says if, after checking their projections, people don't think their fund will provide enough at retirement or age 65, there are a number of things they can do to increase the amount.
"Firstly, think about contributions. Increasing contributions makes the most dramatic difference to your KiwiSaver balance and even a small increase can make a big difference to your results long term.
"Investors may be tempted to take a break from contributing and use the extra money for day-to-day expenses," she says. "They may see retirement as way out there somewhere and look instead at cuts they can make now. But this could be a mistake as you lose the benefits of compounding investment returns over time."
Peyper says even if people can't afford to contribute regularly, they should try to contribute a minimum of $1042 by June 30 each year to be eligible for the government contribution of $521: "That's comparable to a 50 per cent return on investment and better than you'll get anywhere. It works out to just $20 per week to meet the minimum contribution.
"Secondly, take a look at your fund choice," Peyper says. "Being in a fund which is not best suited to you can cost you down the line.
"A general rule of thumb is to look at your time horizon. If you need the money within the next five to ten years a more conservative fund might be better with a growth fund if the need is 10 years or more away.
"Changing fund type will change your projections and while growth funds may well deliver better returns in the long term you will need to consider a few other things such your goals, time horizon, and risk appetite. Always make sure to look at the bigger picture when thinking about your fund type."
Peyper says fees can also have a big impact on total returns over the long term. It's worth keeping an eye on the fees because as balances grow, fees do too.
"People may be reading a lot about market volatility and maybe their KiwiSaver balance is reflecting this," she says. "It is important not to have a knee-jerk reaction but to keep in mind what you are investing for - and your time horizon.''
Peyper says some won't feel confident in knowing what is the best course of action. "Our research shows that for many the primary source of advice is family, friends or social media and rarely do they turn to official channels.
"But everyone has a KiwiSaver provider they can turn to for advice," she says. "They can also talk to a licensed financial advice provider for professional help if they are unsure."
To the end of March, 3.1 million people were in KiwiSaver (IRD figures). Of these, Peyper says, around 39 per cent are not currently making contributions, although many are under 17 (who account for 8 per cent of membership.
She says figures from research investment firm Morningstar, show the total amount of funds under management at the end of March was $87.3b, down $1.54b from the previous quarter (December 2021). However, this was up from $78.8b at the end of March 2021.
For more information go to: fma.govt.nz/kiwisavercheck