Your What, Who, How, Why, When And where Guide to KiwiSaver
11Have you been a member of KiwiSaver for years wanting to learn more? Or are you newly employed wanting to learn more about the governments retirement saving scheme to see if it’s right for you? Either way this guide will help you get your head around the basics of KiwiSaver.
WHAT is KiwiSaver?
KiwiSaver is a voluntary work-based savings initiative designed to assist and encourage New Zealander’s in saving for retirement. Most members build savings through regular contributions from their pay, and incentives such as employer and government contributions makes this form of saving beneficial and easy!
>WHO Can Join KiwiSaver?
You don’t need to be working, but you do need to meet the following requirements;
- A New Zealand citizen or be entitled to stay in New Zealand indefinitely.
- Living or normally living in New Zealand
- Under the age of eligibility for New Zealand Superannuation (which is currently 65)
HOW to Join?
The three ways to join KiwiSaver are;
- Automatically being enrolled when you start a new job
- Opting in through your employer
- Opting in through a KiwiSaver provider (i.e. your bank)
If you’re self-employed or not currently working, you can opt in through a KiwiSaver provider and make a contribution agreement.
HOW Does it Work?
- If you’re automatically enrolled through your job, you can opt out, but it has to be between 2 and 8 weeks of starting your job. If you don’t opt out once enrolled, you have to contribute for at least 12 months.
- You choose to contribute either 3%, 4% or 8% of your gross (before tax) income. Your employer will match your contributions too.
- After 12 months of contributing you can choose to pause and take a contributions holiday or continue.
- You can also make lump sum payments into your KiwiSaver account through your provider or Inland Revenue.
WHY Should I Join?
KiwiSaver offers some great benefits so here are some reasons to consider joining;
- Your employer must contribute at least 3% of your gross earnings, as well as your own contributions.
- It’s a simple way to save. Your contributions come straight from your pay and you don’t have to do anything once it’s all set up to save consistently.
- You’re entitled to an annual member tax credit of up to $520 if you’re 18 and over.
- When you change jobs, your account comes with you making the transition simple and easy.
WHEN Can You Use it?
You can’t touch your money until you get New Zealand Superannuation when you’re 65. If you’re between 60 and 64 when you apply, you can’t get your funds for 5 years. When you’ve been contributing for at least three years, you may qualify to use your contributions for your first home deposit.
WHERE to Find More Information?
All you need to know about the scheme is on the KiwiSaver website, but there’s also some handy information on Seek. It’s also important to read through the information given to you by your provider and chat about contributions with your employer.