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What is KiwiSaver?

KiwiSaver is a savings initiative designed to help you get set up for your retirement. Most KiwiSaver members will build up their savings through regular contributions from their pay. It’s hassle-free so it is easy to maintain a regular savings pattern.

There are a range of membership benefits to encourage you to get saving. They include regular contributions from your employer and an annual member tax credit paid by the Government. Some people could also be eligible for help with the deposit on their first home.

KiwiSaver schemes are managed by private sector companies called KiwiSaver providers. You can choose which KiwiSaver provider to invest your money with.

How does KiwiSaver work?

Your KiwiSaver savings include your personal contributions to your account, plus government contributions and employer contributions, add or subtract your investment returns, which could go up or down at any time, subtract any withdrawals and you’re left with your retirement savings.

How to make contributions?

For many people, KiwiSaver is work-based. This means you receive information about KiwiSaver from your employer, and your KiwiSaver contributions will come straight out of your wages.

If you choose to join, contributions are deducted from your pay at the rate of either 3%, 4% or 8%, this is your choice, and invested for you in a KiwiSaver scheme.

When you can get your money?

Your KiwiSaver savings will generally be locked in until either:

  • You are eligible for NZ Super (currently 65), or
  • You have been a member for at least 5 years (if you joined over the age of 60)

You may be able to make an early withdrawal of part or all of your savings if you are:

  • buying your first home
  • moving overseas permanently
  • suffering significant financial hardship
  • seriously ill

What you will get when you retire?

NZ Super provides for a basic standard of living in retirement, but it might not be enough for the kind of retirement you want. Having a KiwiSaver account does not affect your eligibility for NZ Super or reduce the amount of NZ Super you are eligible for.

KiwiSaver savings will compliment NZ Super to provide you with a better standard of living for your retirement.

To find out how much you’re likely to need in retirement seek advice from a financial advisor.