Pay attention: “after fee returns.”

By Scott Crocker

Kiwisaver is a great way to save for retirement, but it's important to understand the impact of fees on your returns. While many people focus on the fund fee charged by their KiwiSaver provider, it's actually the after fee returns that are more important. Here are the top five reasons why:

1. After fee returns show the real returns on your investment: The after fee returns on your KiwiSaver account represent the actual returns you will receive after fees have been deducted. This is important because the fund fee charged by your provider can be misleading, and may not accurately reflect the actual returns on your investment.

2. Fund fees can be high, but after fee returns can still be positive: Some KiwiSaver providers charge high fund fees, which can make it seem like your returns will be lower. However, even with high fees, some funds can still generate positive after fee returns, meaning you will still make money on your investment.

3. Fund fees can eat into your returns over time: Even if the fund fee charged by your provider seems small, it can add up over time and eat into your returns. By focusing on after fee returns, you can ensure that you are getting the best possible returns on your investment.

4. After fee returns help you compare funds: When comparing different KiwiSaver funds, it's important to look at the after fee returns rather than just the fund fee charged. This will give you a more accurate picture of how each fund is performing, and will help you make an informed decision about which fund to invest in.

5. After fee returns are a better indicator of long-term performance: When it comes to investing for retirement, it's important to focus on the long-term performance of your KiwiSaver fund. After fee returns are a better indicator of long-term performance than the fund fee charged, as they take into account the impact of fees over time.

In conclusion, while fund fees are an important consideration when choosing a KiwiSaver fund, it's the after fee returns that are ultimately more important. By focusing on after fee returns, you can ensure that you are getting the best possible returns on your investment, and are on track to achieve your retirement savings goals.