Pick up your big five hundy this year

TOM HARTMANN
Last updated 05:00 30/03/2014
Money

MONEY FOR JAM: Top up your Kiwisaver before June if you haven't already maxed out your entitlement to the government's Kiwisaver contributions.

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Did you know that for every dollar you put in to KiwiSaver, the Government adds 50 cents - up to $521 each year? Yep, a big five hundy. If you're not on to it - and a recent survey showed three out of five people didn't know they could get $521 - you may be leaving money on the table.

The trick is to contribute at least $1043 each year - that's slightly more than $20 a week. If you're an employee earning $34,762 or more and contribute the minimum of 3 per cent, you're set.

You're already getting yours.

But if you earn less than that, are self-employed or have been taking a contributions holiday, you may be contributing less than $1043 and not getting all you could. Let's say you earn $25,000 a year and contribute 3 per cent. You're putting in $750 and the Government adds $375. That's great, but not the full five hundy.

All is not lost, however. You can top up your account before mid-June by contacting your provider and making arrangements to add a lump sum to your account. The government funds will then get added in late July or early August.

To be eligible you have to be aged 18 to 64, and there are residency requirements.

Getting that $521 can make a huge difference over the long run. For a 24-year -old joining today, for example, it could be as much as a $50,000 difference by the time they reach 65.

Last year more than 675,000 people missed out on the full government payment because they hadn't contributed enough. Hopefully far fewer will this year.

Tom Hartmann is the resident blogger at Sorted.org.nz

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