The Most Common KiwiSaver Mistakes I See Kiwis Make
- Cameron Steele
- Jan 17
- 3 min read
Updated: 5 days ago
KiwiSaver is one of the most powerful long-term investments available in New Zealand - yet I see the same mistakes cropping up again and again. Not because people don’t care, but because KiwiSaver can feel confusing, distant, or easy to ignore.
Most of these mistakes aren’t dramatic. They’re quiet. And because they compound over time, they can end up costing tens (or even hundreds) of thousands of dollars without anyone noticing until much later… when it’s too late.
Here are the most common KiwiSaver mistakes I see - and what actually helps.
Staying in the Default Fund for Too Long Is One of the Most Common KiwiSaver Mistakes
This is easily the most common issue.
Default funds are designed to be low risk and quite conservative, which makes sense as a temporary holding place. The problem is that many people stay there for years - sometimes decades.
If someone is young or has a long runway until retirement, sitting in a conservative KiwiSaver fund can seriously limit growth. KiwiSaver money is invested, and conservative investments are designed to protect capital, not grow it aggressively.
Default isn’t wrong - it’s just rarely optimal long term.
Being in the Wrong Fund for the Timeframe
Another big one is fund choice that doesn’t match real-life plans.
I often meet people who:
Are planning to buy a home soon but are still in growth KiwiSaver funds
Are decades from retirement but sitting in conservative options
KiwiSaver investments should reflect when the money is likely to be needed, not just age. A mismatch here can mean unnecessary risk - or missed opportunity.
Underestimating KiwiSaver Contributions
Many Kiwis stick with the minimum KiwiSaver contributions and never revisit them. While that’s better than nothing, small increases can make a meaningful difference over time.
Because KiwiSaver contributions are consistent and long term, even a 1% increase can significantly improve outcomes - especially when combined with an appropriate investment strategy.
This is one of the easiest changes people can make.
Ignoring Fees and Long-Term Performance
Fees matter more than many people realise.
Over decades, even small fee differences can quietly eat into returns. That doesn’t mean the cheapest KiwiSaver fund is always the best option - but fees should make sense relative to performance and investment approach.
This is particularly important in the New Zealand investment landscape, where fund structures and styles vary widely.
Treating KiwiSaver as “Set and Forget”
KiwiSaver isn’t a savings account - it’s a long-term investment NZ tool.
Life changes:
Jobs change
Income changes
Goals change
KiwiSaver accounts and fund choices should evolve over time. A simple annual check-in can prevent years of misalignment.
A Better Way Forward
Avoiding these mistakes doesn’t require constant monitoring or expert-level knowledge. It simply means:
Understanding how KiwiSaver money is invested
Knowing why a particular KiwiSaver fund has been chosen
Making sure KiwiSaver contributions still make sense
Small tweaks, made at the right time, can have a big long-term impact.
Test your current KiwiSaver knowledge with my KiwiSaver Knowledge Quiz - this will help you discover where these tweaks should be made. It will only take 3 mins... and could end up making you thousands of dollars.
Simple Steps. Solid Results
Written by Cameron Steele, KiwiSaver Specialist & Financial Adviser based in Christchurch, New Zealand.
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