Types of Kiwisavers
What is a KIWI Saver?
Anyone who is entitled to live in New Zealand indefinitely and who normally lives in New Zealand is entitled to join KiwiSaver. Those under 18 require parental consent to join.
Employee participants can choose to contribute 3%,4%, 6%, 8% or 10% of their gross pay, and can switch rates three months after setting a rate (unless employers agree to a shorter time frame). These contributions are deducted from an employee’s pay and sent by the employer to Inland Revenue alongside their PAYE tax returns.
The self-employed and unemployed can choose how much they want to contribute; while most KiwiSaver schemes have minimum contribution amounts for people in this category, several schemes allow any level of contributions.
What is a KiwiSaver?
A KiwiSaver is a voluntary savings scheme to help set you up for your retirement. You can make regular contributions from your pay or directly to your scheme provider.
When it’s time to withdraw your money
After you reach 65, you become eligible to take all or some of your contributions, your employer’s contributions, the government’s contributions, plus returns. In short, the whole thing.
How fast you open the tap is up to you: keep it off for now and leave your money invested in KiwiSaver, open it slightly to drip-feed some income, or open it right up to spend or invest the entire amount (although you may not be able to rejoin KiwiSaver if you draw it down entirely).
Mortgage Diversions
Some provider funds offer a mortgage diversion scheme where some of the employee contributions can be used to make mortgage repayments instead of going towards Kiwisaver after a person has been signed up for 12 months. This is only allowed for repayments on the main home, and not for other properties such as investment or holiday homes. Employer contributions will not be able to be used for the mortgage.
Do I have to withdraw the money?
There’s no rush – you can leave your money where it is while you work through all the issues and decide. For example, if you want to make regular withdrawals, there may be a minimum amount required or some fees.
It may be worth talking with a financial adviser about your financial needs and risks, and work out the best course of action to reach your goals. Find out how to find a financial adviser in our guide.
Contact your KiwiSaver provider directly to find out what’s involved and to make arrangements.