Are you wondering when you can use your KiwiSaver? Whether you’re planning to buy your first home or are facing significant financial hardship, there are specific circumstances under which you can access your savings. For instance, if you have been a member of KiwiSaver for at least three years, you can withdraw your contributions to put a deposit on your first home.
You may also be eligible to access your funds if you’re moving overseas or experiencing a serious illness. For retirement, you can typically start withdrawing once you turn 65. If you’re not ready to use the money, though, you can keep it invested until you need it.
Different KiwiSaver schemes have varying processes and requirements, so it’s important to check specific details with your provider. We’ll go through some general options below, including where to get further information.
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When Can I Use My KiwiSaver Before Retirement?
You can access your KiwiSaver savings early under specific circumstances. These include purchasing your first home, experiencing significant financial hardship, or permanently emigrating from New Zealand.
Using Your KiwiSaver For Your First Home
If you’re a first home buyer, you can use your KiwiSaver savings to help fund your purchase and put towards you home loan. You must have been a KiwiSaver member for at least three years.
To be eligible, you must provide documents such as a signed sale and purchase agreement and a letter from your solicitor confirming the transaction.
Our guide to KiwiSaver first home withdrawals explains everything you need to know.
Our mortgage advisors also work with first home buyers to help them with their first home withdrawal application and get the best mortgage rates. Talk to our friendly team today, for 100% free, no obligation advice.
Significant Financial Hardship Withdrawal
Experiencing severe financial hardship can make you eligible for an early withdrawal of your KiwiSaver money. Situations covered include not being able to meet minimum living expenses, mortgage repayments, or costs related to serious illness.
You’ll need to provide documentation such as a letter from a doctor if medical evidence of serious illness is required or proof of overdue bills. Discuss your situation with your KiwiSaver scheme provider early on and they’ll let you know the requirements.
Permanent Emigration
If you decide to permanently emigrate from New Zealand, you can apply to withdraw your KiwiSaver after 12 months. This applies if you’re moving to countries other than Australia, where special rules apply. If moving to Australia, you can transfer your KiwiSaver savings to an Australian superannuation fund.
Proof of emigration is needed, including documentation like a new address, evidence of airline tickets, and potentially a statutory declaration. Your KiwiSaver provider will guide you through the specific requirements for accessing your funds under this condition.
Serious Illness or Life Shortening Congenital Conditions
If you’re facing a serious illness that affects your ability to work or presents a risk to your life, you may be able to withdraw your KiwiSaver early. This option is available if you have an injury, illness, or disability that either makes it impossible to work or poses a serious and imminent risk of death.
To qualify, you’ll need to provide medical evidence to support your claim. This typically involves a signed declaration from a doctor verifying the seriousness of your condition. Your condition should significantly impact your life expectancy, potentially reducing it below the standard retirement age of 65.
Some disabilities or conditions might qualify, especially if they are life-shortening. These can include both congenital conditions and those acquired later in life.
Here’s what you need to know:
- Medical Proof: A doctor’s certification is essential.
- Impact on Work: The illness must make you unable to work permanently.
- Life-Threatening: The condition seriously threatens your life.
For detailed information, refer to the Inland Revenue’s guidelines. Make sure your application is thorough to avoid any delays in accessing your funds.
The Different Types of KiwiSaver Contributions
KiwiSaver is designed to help you save for your retirement. It can grow through various types of contributions, including:
Employee Contributions
Your contributions are automatically deducted from your salary at a default rate of 3% unless you choose a higher rate. You can only change your rate once every three months unless your employer agrees to a shorter timeframe.
Employer Contributions
Your employer is required to contribute at least 3% of your before-tax pay to your KiwiSaver account. This is in addition to your own contributions. Check your Product Disclosure Statement for specific details.
Government Contributions
The government provides an annual contribution to boost your savings. You can usually see this contribution arrive in your account via myIR. The amount is up to $521.43 each year if you contribute at least $1,042.86 annually.
Voluntary Contributions
You can make additional voluntary contributions at any time. These can be lump sums or regular automatic payments made directly or through Inland Revenue.
Interest and Investment Earnings
Your KiwiSaver savings earn interest and investment returns based on the assets in your chosen fund. These returns vary and come with investment risks. It’s important to review your fund’s performance regularly. If you need KiwiSaver advice, don’t hesitate to talk to our expert advisors.
Additional Points
- Contributions from April 2020 onwards appear as smaller payments in your account, which can be tracked through myIR.
- Your contributions, along with any employer contributions and government contributions, make up your total KiwiSaver savings. You can potentially use these funds to get into your first home or as retirement savings.
Make sure you understand all the various contributions to optimise your KiwiSaver growth and take full advantage of the benefits offered.
KiwiSaver Withdrawals After Retirement (Or When You Reach 65)
When you retire and meet specific eligibility criteria, you can access your KiwiSaver. Proper planning can help you manage these funds effectively, and our expert KiwiSaver advisers are here to help.
Eligibility for Retirement Withdrawal
To withdraw your KiwiSaver in retirement, you must meet the age of eligibility. In most cases, this is 65 years of age. Additionally, if you joined KiwiSaver before 1 July 2019, you must have been a member for at least five years, regardless of age.
Once you meet these criteria, you can submit a withdrawal application. This form enables you to access your savings, and either withdraw all your KiwiSaver or withdraw your funds intermittently.
Check with your KiwiSaver provider about any specific requirements or forms, such as a Subsequent Retirement Withdrawal Form, if you continue to make intermittent withdrawals.
Planning Retirement Finances
Effective financial planning is crucial once you start withdrawing from your KiwiSaver. Consider how you want to structure your withdrawals to meet your ongoing expenses.
You might opt for a lump sum withdrawal to cover significant expenditures or set up regular withdrawals to provide a steady income. This flexibility allows you to tailor your retirement finances to suit your needs.
Moreover, combining your KiwiSaver withdrawals with other income sources, such as New Zealand Superannuation, can help ensure a more secure financial future. Regular reviews of your financial situation and consulting with a financial advisor can also be beneficial.
Life Events and KiwiSaver
Navigating life events can have significant implications on your KiwiSaver account. This section covers various circumstances under which you might need to access or manage your KiwiSaver funds due to changes in your personal and professional life.
Changes in Employment Status
Losing a job or changing employment can impact your contributions and retirement savings. If you find yourself unemployed, you can apply for a savings suspension to pause your contributions for up to one year. This requires submitting a statutory declaration to your provider.
Death and Estate Planning
In the unfortunate event of death, your KiwiSaver becomes part of your estate. The funds are then distributed according to your will or the rules of intestacy if you don’t have a will.
Make sure your will is up-to-date to ensure smooth handling of your financial affairs. Also, informing your nominated beneficiaries and updating your provider can help facilitate this process.
Associated Reading:
What Happens to KiwiSaver When You Die?
What Happens to KiwiSaver When You Divorce?
Managing Your KiwiSaver Account
Staying on top of your KiwiSaver account is essential for maximising your retirement savings. Important aspects include monitoring your balance, adjusting your fund choices, and managing contribution breaks.
Account Monitoring and Statements
You should regularly check your KiwiSaver account to ensure contributions from your salary or wages are correctly recorded. Use your KiwiSaver provider’s online tools or log in to the Inland Revenue’s My KiwiSaver.
Receiving regular statements helps track growth and investment performance. Consider setting up email notifications for updates to stay informed about your account status.
Key points:
- Log in to your provider’s online system
- Monitor contributions from employer
- Review statements regularly
Changing Funds or Providers
You might want to change funds based on performance, personal circumstances, or for ethical reasons. Consult a financial adviser for personalised advice, such as the experts here at OneStop Financial Solutions.
Switching funds involves contacting your KiwiSaver provider, and the process may include forms or online submissions, which we can help you with – at no cost to you.
Contribution Breaks and Resumptions
If you need a break from contributing, you can apply for a contributions holiday. This can be beneficial if your financial situation changes, but remember to resume contributions as soon as you’re able. Small contributions compounded over the years can make a large impact later in life.
A contribution holiday can last from three months to five years. You must apply for this through the Inland Revenue using your IRD number.
Managing your KiwiSaver account effectively helps you stay on track for a comfortable retirement, ensuring your funds are well-managed and your contributions continue to grow. If you need help or advice on KiwiSaver withdrawal options, don’t hesitate to reach out to our friendly team today.
