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KiwiSaver at a Glance

KiwiSaver at a glance
KiwiSaver is available to anyone entitled to be be a permanent resident in New Zealand who is under the age of 65 and has an IRD number.

  • The following facts apply to most people, but will not necessarily apply to every individual. There are some exceptions.
  • Your funds in KiwiSaver are locked in until the age of eligibility for New Zealand Superannuation (currently 65), or for a period of 5 years whichever is the longer.
  • Early withdrawal may be possible in the event of serious illness, permanent emigration or significant financial hardship.
    NOTE: Conditions apply, it is not just a matter of asking for the funds and getting them.

Investing through KiwiSaver

  • By using managed funds such as KiwiSaver you can access a wide range of investment choices, in NZ and overseas.
  • You can only particpate in KiwiSaver via a registered KiwiSaver scheme provider. You cannot manage a KiwiSaver account for yourself.
  • Generally the higher growth funds have higher risk, and the lower growth funds have lower risks to an investor. The degree of risk in any type of investment affects both the long term performance (how much it grows) and also how volatile that return can be in any given period (how much the returns vary from time to time).
  • There are a range of investment choices reflecting the level of risk that you feel is appropriate for you, considering the length of time you will be a member, amount of money being invested and your expectations from KiwiSaver.

Product Features

KiwiSaver is a compelling initiative introduced by the Government to provide a number of incentives to help every New Zealander save for their retirement.

Contributions to your savings from the Government and your employer will help to grow your retirement nest-egg faster. The key incentives for individuals to join KiwiSaver are from the contributions gained from the Government and your employer.

Member tax credits

Subject to certain criteria, from age 18, you may receive member tax credits of up to 50 cents per dollar of qualifying member contributions up to $10 per week ($521.43 per annum).

Employer contribution

From age 18, if you are employed and contributing to KiwiSaver your employer will generally contribute as well. Since 2007, employer contributions were 2% of an employees gross (pre-tax) salary or wages. From 1 April 2013, the compulsory minimum employer contribution rate increased to 3% of the employee’s gross salary.

Withdrawal to buy your first home

After you have been contributing to KiwiSaver for three years, you may be eligible to withdraw all your contributions, your employer’s contributions and the member tax credits in order to buy your first home (not an investment property). The Government’s $1,000 kick-start cannot be withdrawn to buy your first home.

The KiwiSaver HomeStart grant provides eligible first-home buyers with a grant of up to $5,000 for individuals and up to $10,000 for couples to put towards the purchase of an existing/older home. In addition, the new KiwiSaver HomeStart grant provides eligible first-home buyers with a grant of up to $10,000 for individuals and up to $20,000 for couples to help with the costs of purchasing a brand new home.

Entitlement to this subsidy will depend on your household income and the price of the home. The KiwiSaver HomeStart Grant is administered by Housing New Zealand.

Your KiwiSaver account stays with you

If you change jobs or leave the workforce, your KiwiSaver account goes with you.

Contributions holiday

After being a KiwiSaver member for 12 months, you can choose to take a break – called a contributions holiday. This can last between three months and five years. You can still contribute $1,042.86 each year in order to receive member tax credits of $521.43 p.a. from the Government.

Your contribution

If you are employed, you will need to contribute 3% or more of your gross (pre-tax) salary or wages that you earn at that job – this is deducted from your net (after tax) pay. Your employer is obliged to match your contributions.

If you are self employed or a non-worker, you can decide how much you contribute to KiwiSaver (certain conditions may apply, please see the relevant Investment Statement for details).

Benefits of KiwiSaver

  • All contributions credited to your account, including Government contributions and your employer contributions, become yours at the expiry of the locked-in period.
  • Your KiwiSaver account will be made up of contributions to your account, plus or minus investment returns, and minus any withdrawals, account fees and taxes.
  • Up to $521.43 p.a. tax credit contributions in each scheme year (1 July – 30 June) from the Government will be applied to your account if you are over 18. The Government will contribute 50 cents for every dollar you contribute UP TO a maximum of $521.43 p.a. – of course you have to be contributing to qualify for this.
  • Employee  minimum contributions are 3% of gross salary, and contributions must be made for 12 months. After that time you can request a contribution holiday for up to 5 years at a time.
  • You can elect to contribute either 3%, 4%, or 8% of your gross salary, with 3% being the minimum from your pay. If you are not employed you can contribute directly to your KiwiSaver account.
  • Employer contributions at dollar for dollar up to 3% of your gross salary. This is paid by employers to your account without coming off your salary. The employer obligation is to match your contributions at the minimum level only. No employer contributions are payable during a contributions holiday.
  • Investment returns on all the accumulated contributions (government, employer and you) belong to you individually (note: investment returns can be negative).
  • KiwiSaver schemes generally have an independent Trustee appointed to look after the benefits and safeguard the interests of members.

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See Also:

  • Will KiwiSaver be enough?
  • KiwiSaver for Adults
  • KiwiSaver for The Self-Employed
  • KiwiSaver for Children
  • KiwiSaver Scheme Comparison

Will KiwiSaver be enough for your retirement?

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LIFE-TIME Insurance

  • Insurance
  • ACC Levy Reduction
  • Insurance Made Simple
  • Life Insurance Cover
  • Trauma Cover
  • Income Protection Cover
  • Medical Insurance
  • Mortgage Repayment Cover
  • Survivors Income Cover
  • Rural Key Person Cover
  • Business Expenses Cover
  • Key Person Cover
  • Funeral Fund
  • Golden Life
  • Total and Permanent Disability Cover
  • Life Insurance
  • Medical Insurance
  • Disability Insurance
  • Income Protection Insurance
  • Trauma Insurance
  • LIFE-TIME Insurance Audit

Financial Planning

  • Investments
  • Choosing Investments
  • Investment Monitoring
  • Financial Planning
  • Mortgage Assistance
  • LIFE-TIME Investment Audit
  • Retirement
  • What Happens If You Live Too Long
  • Retirement Facts
  • Retirement Solutions
  • Retirement Planning
  • Estate Planning Checklist
  • LIFE-TIME Retirement Road Map
  • KiwiSaver
  • KiwiSaver at a Glance
  • Will KiwiSaver be enough?
  • KiwiSaver for Adults
  • KiwiSaver for The Self-Employed
  • KiwiSaver for Children
  • KiwiSaver Scheme Comparison

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Impartial Financial Advice

  • Evidence Based Financial Advice
  • What our Customers Say
  • Case studies
  • Meet The Team
  • Our Mission
  • The LIFE-TIME Brand
  • Newsletter
  • Contact Us
  • Individual Financial Health Check
  • Savings and Family Funding
  • Cash Management
  • Get a Quote
  • Business
  • Business Insurances and Services
  • Business Succession Planning
  • Business Financial Health Check
  • Free Business Succession Document

Unbiased and Impartial Research Based Financial Advice | Copyright © 2011-2018 LIFE-TIME FINANCIAL GROUP, all rights reserved

Disclaimer: LIFE-TIME is unable to guarantee the accuracy, completeness or fairness of information contained within this website. The information shown does not in any way constitute a recommendation and should not be acted upon without first obtaining professional advice: Speak with an Authorised Financial Adviser. This website is operated by LIFE-TIME Financial Group and is not endorsed by, or affiliated with, the New Zealand government or Inland Revenue. The KiwiSaver trade mark and logo is used under licence from Inland Revenue. To view the official New Zealand government KiwiSaver website, please go to www.kiwisaver.govt.nz