kiwisaver, investing

What happens to my KiwiSaver money if I emigrate?

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Let’s do a bit of KiwiSaver trivia here.

I’ll ask a question, and let’s see if you know the answer.

True or False: A person can only withdraw their KiwiSaver money before the age of 65 if they are buying a first house or experiencing serious financial hardship.

Take a moment to think about it (no peeping at the answer just yet!). When you’re ready, scroll down and find out the answer to this question.

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Let’s find out when a person can withdraw their KiwiSaver money

Believe it or not, the answer to the question mentioned in the previous section is “False”.

There are more than just the two ways mentioned above (buying a first home and experiencing significant financial hardship) that a person can get access to their KiwiSaver money before the age of 65. Click the link here if you want to learn more about all of these ways.

There are even more ways to access your KiwiSaver money, although some of them you might not have heard of.

For example, in a divorce, the money in your KiwiSaver account may be considered “relationship property”. This may mean that you end up giving some of the money (but not all of the money) in your KiwiSaver account to your partner, depending on what you and them agree on.

KiwiSaver can be more complicated than people first think. Therefore, it is important to get personalised advice for your situation. 

Reading blog posts like ours is a great first step to making sure you understand more about KiwiSaver. This is why we recommend you take the opportunity to read some of our blog posts by clicking here.

If I permanently emigrate, can I withdraw money from my KiwiSaver account early?

The answer to this question is “Yes, unless you’re moving to Australia”.

Most people will be able to withdraw their KiwiSaver money after a year of living overseas. However, for those who are permanently emigrating to Australia, you’ve got a different set of options.

As a result, this post will break down two groups of situations: 

  1. People permanently emigrating somewhere that isn’t Australia

  2. People permanently emigrating to Australia

People permanently emigrating somewhere that isn’t Australia

If you’re going to permanently move overseas to a country that is not Australia, you can become eligible to withdraw your money from KiwiSaver. 

This means that, provided you aren’t already close to the age of 65, you will be able to get most of your money out before you reach 65. After that, you may spend it however you like!

You can withdraw from your KiwiSaver account one year after you’ve emigrated to your new country of residence. Because you cannot access your KiwiSaver money for at least 12 months after moving, it’s important that you ask yourself how you’ll fund your first year after moving overseas.

Keep in mind though that you cannot withdraw any government contributions. This means the $521.43 contribution that the Government might have put in your account every year cannot be withdrawn if you’re below 65.

Having said that, you can still withdraw the $1,000 Government kickstart if you received it.

Under the KiwiSaver Act 2006, you can potentially have your funds transferred to an approved foreign superannuation scheme instead. This foreign superannuation scheme must comply with the KiwiSaver Act 2006, Section 228(e).

People permanently emigrating to Australia

Unlike the above, people moving to Australia can only get their money transferred to an Australian superannuation scheme. This means they are not eligible to withdraw their KiwiSaver money from their account.

If you think about it, retirement savings are meant to be for your retirement. So, your KiwiSaver money will simply end up going towards your retirement in Australia if you choose this option.

One thing to keep in mind is that if you transfer your funds to an Australian superannuation scheme, you will generally be subject to Australian superannuation laws, with a few exceptions.

Having said all that, changing to an Australian superannuation scheme is not compulsory. This means you can choose to simply keep your money in your KiwiSaver account as per usual. 

If you choose this option, you will most likely not be eligible for the government contribution while you’re overseas. There are a few exceptions to this rule - these are if you are a State Services employee (e.g. you work for the NZ Government), or if you are a volunteer working for an approved organisation.

Additionally, there is a cap to the amount of money you can transfer into an Australian superannuation scheme. These rules however, are quite complex and can change.

To understand more about your options if you are permanently emigrating to Australia, click this link here from the Australian Taxation Office.

Need some help with your KiwiSaver account? We can help with that.

Even if you’re moving outside of New Zealand, KiwiSaver advice can still be useful to you.

For example, if you’re moving to a country that is not Australia, you still have to wait at least a year to be able to withdraw your money. If you’re in the wrong type of fund and something happens, your KiwiSaver balance may significantly shrink and leave your account with a smaller balance that what you might have wanted.

And if you’re moving to Australia, remember that you can still keep your money in your KiwiSaver account. If this is what you choose, then getting some help with your KiwiSaver account would most certainly be useful.

This is where our KiwiSaver HealthCheck can come in.

Our KiwiSaver HealthCheck gives you an opportunity to receive free, over-the-phone advice about which KiwiSaver fund, fund type, and provider is best for you. This will allow you to make sure that you are best placed for retirement.

All it requires is for you to fill out our simple HealthCheck, schedule an appointment, and turn up to your appointment. We will then do all the number crunching and the hard stuff behind the scenes, and you can relax while hearing your financial advice.

So why not take advantage of our free advice? Fill out our KiwiSaver HealthCheck today.

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Are you with the right KiwiSaver provider for you? Find out by taking our free KiwiSaver HealthCheck!

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