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In our series “Money with Mary,” personal finance legend Mary Holm shares practical tips on a variety of money matters.

Disclaimer: This information has been prepared for the FMA by financial columnist and author Mary Holm. The views and opinions provided in the guide are those of Mary Holm and do not necessarily reflect the views or official position of the FMA. Mary’s advice is of a general nature, and she does not accept responsibility for any loss that any reader may suffer from following it.

How to retire a Rich Old Lady

• Start, or increase, your saving NOW – even if it’s just a tiny amount! Whatever your age, there’s power in having your savings grow over as many years as possible.
• Use KiwiSaver. You get a wide spread of investments, which greatly reduces your risk. And no other investment is boosted by contributions from the government and perhaps your employer. These extra contributions push your savings to a higher level – as much as twice what they would be otherwise.
• Gradually increase your contributions. Employees can do that through work. But everyone, including people on parental leave, can set up automatic transfers from your bank into KiwiSaver. Start small – maybe $10 a week – and increase the amount each year on your birthday. It’s a great gift to Future You. Also, every time you get a pay rise or your expenses drop, give your savings rate an extra boost.
• Be brave and invest in a higher-risk KiwiSaver growth or aggressive fund – unless you expect to spend the money within ten years. Your balance will drop sometimes, but ignore that. Growth funds have historically delivered the highest returns over the long term, and you’ll end up with much more than in a lower-risk fund.
• Choose a fund with lower fees – leaving more money to grow for your rich old age. The Smart Investor tool on sorted.org.nz gives info on fees.