KiwiSaver NZ - KiwiSaver Scheme, Benefits, Joining KiwiSaver & More!

What if I’m not an NZ Citizen?

Only New Zealand citizens or residents entitled to live in New Zealand indefinitely have the possibility of joining KiwiSaver. If you are only residing temporarily, a visitor, or on a work or student visa, you can’t participate in KiwiSaver. If these conditions do not apply, you may be able to proceed with KiwiSaver sign up.

This is because KiwiSaver is intended for people with a long-term and post-retirement future in NZ. Naturally, someone who’s residing in New Zealand temporarily won’t truly benefit from a long-term savings scheme. 

Although you must be a resident or NZ citizen to be eligible, there are alternative options. Milford is a KiwiSaver firm that also offers other investment funds. These investment funds generally run parallel to KiwiSaver and have a similar return record. Therefore, as a non-resident or citizen, you have the option to invest in funds similar to joining KiwiSaver. The difference is that you can withdraw your investment from these funds at any time, unlike KiwiSaver. Fixed-term deposits are another way utilise your existing savings and generate returns. They typically offer lower returns than joining KiwiSaver or investment funds but are seen as a less risky option. 

Before joining KiwiSaver, you should consider the possibility of applying for New Zealand residency if eligible. Once you receive NZ residency, you can then apply for KiwiSaver sign up. If that is not possible, remember that you do have other alternatives to KiwiSaver sign up out there. It is simply advised to do your research beforehand and get tailored financial advice.

Can I join KiwiSaver when I’m young/before I start working?

Joining KiwiSaver is a long-term investment and savings plan. Therefore, setting up KiwiSaver young is a great idea. You do not need to be working in order to register. However, there are certain pathways you must follow during KiwiSaver sign up. 

If you are under 18 or joining KiwiSaver before starting work, you’ll need to join directly through a scheme provider. You cannot opt-in through your employer. Those under the age of 16 must have the consent of all their legal guardians to apply. You cannot enroll yourself. It is also worth noting that government and employer KiwiSaver contributions are only eligible to those 18 and over.

Those between the ages of 16 and 17 need at least one guardian to co-sign their KiwiSaver sign up application. If you don’t have a legal guardian, contact your chosen KiwiSaver firm for help.

KiwiSaver sign up is a financial decision after all, and these rules are in place to protect young Kiwis. Nonetheless, it is never too early to start thinking about long-term savings. The earlier you start, the more likely you are to reap the benefits of KiwiSaver post-retirement. While that may seem like a lifetime away, joining KiwiSaver is also a great way to build a saving habit. Most certainly, a financial tool you will need throughout your life.

Joining KiwiSaver self employed.

Yes, you can join KiwiSaver self employed. Much like someone under 18 or not working, you can go through KiwiSaver sign up directly via a scheme provider. Joining KiwiSaver self employed means that you may pay contributions directly to the provider or through IRD. If you are enrolled in KiwiSaver self-employed and choose to pay via IRD you can do so via internet banking. Simply set up an automatic payment by using the “Pay Tax” option and selecting “KiwiSaver” through your internet banking provider.

You can join KiwiSaver self employed at any time by completing a KiwiSaver sign up form from your chosen provider. Furthermore, you can change your contribution rate at any time by contacting your provider.

You won’t get employer contributions investing in KiwiSaver self employed, as compared to when working for a company. Thus, missing out on one of the KiwiSaver benefits. However, you may still qualify for the annual government contribution. This includes a minimum yearly contribution of $1042.86 by you to get the maximum government contribution (currently $521.43). If you don’t make regular payments through KiwiSaver self-employed, remember to make this lump sum payment before 30 June. You should allow for a few days of processing time before the cut-off date.    

Joining KiwiSaver self employed means you can choose a contribution rate that suits your situation and set payment intervals accordingly. You can set up an automatic payment through to your KiwiSaver.

Is it voluntary? How can I opt out?

Joining KiwiSaver self employed or within a company is voluntary. That means that you can decide whether or not you want to be a part of it. While the decision rests with you, KiwiSaver sign up figures continue to rise year on year. That is because the benefits of KiwiSaver sign up far outweigh any negatives. 

If you don’t want to join, when you are employed for the first time and your employer gives you the KS2 form, do not fill it in. If you are currently with KiwiSaver and want to opt-out, you can use Inland Revenue’s website to go through the steps required to opt out. You can apply through myIR online as well.

This Requires:

• IRD number, address, and contact details
• Bank account details for any refunds

If applicable, you also need your:

• Employer’s business or trade name
• Employer’s address or IRD number
• Employment start date
• Written consent from guardians or parents
• Reason for the late opt-out, this needs to be a valid excuse and go through IRD.
• You cannot opt out if you joined directly through a provider instead of your employer
• This needs to be within 2 to 8 weeks after being enrolled

What happens if I move?

If you move overseas (apart from Australia) for more than 12 months, you can apply to withdraw your funds after you’ve emigrated. If you have migrated overseas to a country other than Australia for at least a year, you can do two things.

You can choose to:

• Withdraw your savings, or
• Transfer them to an approved superannuation scheme

If you are not planning to move permanently overseas or are moving within New Zealand or Australia, you do not need to worry about transferring to another scheme. If you plan to permanently move to Australia, you can transfer your account to the Australian superannuation scheme. But if you want to, you can remain in the scheme indefinitely.

After you have been overseas for over a year, you can apply to withdraw most funds from your KiwiSaver. Things like your savings, employee contributions, and interest earned can all be withdrawn. However, government contributions towards your KiwiSaver cannot. 

If you don’t want to make a definite decision, keeping your balance within NZ can be a great option. Your savings are invested and your selected KiwiSaver option works to generate annual returns. If you ever decide on returning to NZ, you won’t have to worry about KiwiSaver sign up once again. 

Can I put extra money in KiwiSaver?

Outside of your and your employer’s regular contributions, you can make additional voluntary contributions towards your KiwiSaver at any time. However, once you have made the payment, it is locked in until you’re eligible to withdraw your KiwiSaver benefits.

Remember, irrespective of joining KiwiSaver self employed or through an employer, its fundamental purpose is to stimulate good savings habits. That is the key intention of the question of how does KiwiSaver work. Therefore, of course, you can put extra money into your KiwiSaver scheme to be in a better financial position post-retirement. 

With technological advances happening quicker than ever before, it’s becoming easier and easier to make additional contributions at your convenience. You can set up extra periodic payments from KiwiSaver sign up or at any other time. This is particularly useful for people who have KiwiSaver self employed and may forget to contribute otherwise.

You can make these voluntary KiwiSaver NZ payments by either:

Transferring the money directly to your KiwiSaver scheme provider’s bank account. This is a preferred method as this avoids additional transfer time. The quicker it gets into this account, the quicker you can reap the KiwiSaver benefits. 

Alternatively, via the Inland Revenue with the ‘Pay tax’ function offered by most New Zealand banks. Although this adds another layer to the process, it is a convenient way for some people. And, for those who are confused about how does KiwiSaver work, it can be a good solution. 

If you are not enrolled in KiwiSaver self employed but rather through an employer, you can contribute this way too. Simply let your employer know of the amount you’d like to pay extra, and they will handle it for you. 

Most KiwiSaver scheme providers will also have instructions and alternative solutions through their online portals. These are features you can check when joining KiwiSaver and at any time thereafter after registering for an account. Importantly, they are accessible to all, from those joining KiwiSaver self employed or through their employer.

How can I check on how my KiwiSaver is performing?

All providers are required to release quarterly and annual reports on how their KiwiSaver schemes perform. Transparency is a key component of the scheme, from initial KiwiSaver sign up right through to retirement. The reports give details, including returns, investment mix, fees, and their top investments. Providers release these on their websites, or you can compare with the Best Performing KiwiSaver Funds on our dedicated page.

In addition, most KiwiSaver schemes now have their own portal system you can register for and receive up-to-date performance information. Right from KiwiSaver sign up, you should get an online account and keep track of your returns periodically. As this is a long-term investment, we do not advise checking every day, but once a month is reasonable. Comparing your provider’s performance to the industry leaders may also motivate you to seek out better results. National Capital can help pinpoint the right KiwiSaver for you if that is the case. 

If you do decide to get advice from National Capital, we will also provide a yearly impartial revision. We’re happy to answer any questions, from how does KiwiSaver work, to maximising KiwiSaver benefits, particularly for your circumstances. It’s safe to say we’ll be there every step of the way, from KiwiSaver sign up, right through to retirement. 

What if I don’t like what the KiwiSaver NZ scheme is investing in?

It’s not unusual to feel uncomfortable with your current KiwiSaver strategy and doubt if it’s the best for your savings. There are plenty to choose from, and some KiwiSaver schemes may align more with your views. By having a sit-down with your advisor, they can assess which KiwiSaver best fits your expectations and values. It is important to remember that by changing funds and or panic switching, you may lose some returns. That is something that people who wonder how does KiwiSaver work can get penalised for. You can change your KiwiSaver at any time, but you can only belong to one at a time. Finding the right time to switch is easier said than done. 

When joining KiwiSaver, you may have different reasons than someone else for picking one company over another. While some people only focus on the investment returns, others choose one that aligns with their religious or social values. Moreover, you can also choose one provider because it is easier to manage KiwiSaver self employed with them, for example. User experience and customer service play a key role in many people’s choices during and after KiwiSaver sign up. If you’re wondering how does KiwiSaver work, it may be the best choice to choose a scheme easy to navigate. 

As mentioned previously, National Capital’s HealthCheck lets you see if your current provider is best for you. If not, we recommend joining KiwiSaver NZ choices that fit your needs.

The benefits of KiwiSaver sign up far outweigh any disadvantages, however, it is still important to be aware of them. Especially when first joining KiwiSaver and figuring out how does KiwiSaver work, these shouldn’t come as a surprise.

KiwiSaver is generally considered a non-liquid asset. A liquid asset is one that can be quickly and easily turned into cash. As an example, money in your bank account is very liquid as it can be withdrawn at any time. On the other hand, a house is considered a non-liquid asset. A house takes time on the market and a bigger effort to turn into cash. You can withdraw your savings under only a few circumstances. Such as when you are over the age of 65 and it’s been at least 5 years since joining KiwiSaver. Alternatively, you can apply for withdrawal when purchasing your first home or in rare circumstances in extreme financial situations.

For many New Zealanders, it is the only investment ‘basket’ they put their hard-earned savings into. When it comes to financial freedom and investment, KiwiSaver sign up should not be your only move. KiwiSaver is a great initiative as the minimum step towards financial freedom into your retirement. But, you should also be looking at diversifying with different investments. Have you done any research into property investment? Is there a business with a strong outlook but in need of cash, which you can invest in? Are there other high-performing mutual funds to invest in? Ultimately, if you are investing more than 3% of your wages, you should be asking yourself why. 

KiwiSaver sign up should be a no-brainer. It can play a big role in important stages of your life. But, KiwiSaver isn’t the ONLY tool for financial freedom.

If you’re planning to move permanently out of NZ, it’s fair to ask what will happen with your KiwiSaver. Well, there are two answers depending on where you emigrate to. Different rules apply when you are moving permanently to Australia compared to the rest of the world. 

If you move to Australia permanently, you can request to transfer from your KiwiSaver to an Australian superannuation scheme. Simply reach out to your KiwiSaver provider and they will guide you through the process. Your selected Australian superannuation scheme must be regulated by the Australian Prudential Regulation Authority (APRA). In addition, they must also be willing to accept the transfer from KiwiSaver. All contributions and the interest you’ve earned since joining KiwiSaver are eligible for the transfer into an Australian superannuation scheme. You can also leave your savings with your current scheme provider. However, you can’t request an early withdrawal when moving to Australia. 

If you move to any other country permanently, you can request an early withdrawal. You can withdraw your, and employer contributions, interest earned, and any fee subsidies or $1000 kickstart since KiwiSaver sign up. However, you cannot withdraw any government contributions since joining KiwiSaver. You can normally withdraw your KiwiSaver balance balance after living overseas for 1 year (not including Australia). If the foreign country has an approved superannuation scheme, you can apply for a transfer. The foreign scheme must comply with regulations as per the KiwiSaver Act 2006 (section 228).

If you move overseas short-term or plan to eventually return to NZ, you can leave your KiwiSaver open. While you aren’t employed in New Zealand, you can continue to make contributions.

The short answer is no, you cannot gift your savings to someone else directly. As we’ve mentioned once you’ve gone through the KiwiSaver sign up process, you can only withdraw under certain circumstances. Those are when you reach the age of retirement (65), purchase your first home, or are under financial hardship. 

However, you can switch KiwiSaver and funds, and we can help identify the best options available to you. For example, if you’re joining KiwiSaver self employed and after a while, you are employed by someone else, you can change to your employer’s preferred provider. However, your decision should be made based primarily on your circumstances rather than external factors.

KiwiSaver was created to serve as a way for Kiwis to enjoy a comfortable retirement without financial stress. Thus, since setting up KiwiSaver, strict limitations over account transactions were introduced to ensure you’re secure in the long run.

If you want to support someone else by gifting to their KiwiSaver, you can make additional contributions on their behalf. Most providers have a direct deposit option available for additional contributions. You simply need to ask the person you want to gift it to and they should have those details available. Similarly, they also can’t withdraw or transfer their balance to someone else.

Your intention may be to use your savings as your first home deposit. When purchasing a home for the first time with someone else, you can both apply for a withdrawal. That way, you can combine to contribute towards your house deposit. 

Once again, from KiwiSaver sign up to your first home purchase or retirement, your goal must be the same. That is to save and invest for a better and stable future.

In what circumstances can I get KiwiSaver money early?

I’m sure this isn’t a question that comes to mind during KiwiSaver sign up but rather later on in life. It doesn’t matter how much you have saved or whether you’ve enrolled through KiwiSaver self employed or through an employer. However, there are a few things to be taken into consideration. 

In the event of your passing, your KiwiSaver savings can indeed be inherited. Contrary to some myths, the government does not automatically claim your KiwiSaver. Nor can you nominate a beneficiary directly within the KiwiSaver system.

From the moment of joining KiwiSaver, it is treated as an asset of your personal estate. With that in mind, it’s crucial to have a valid Will in place. With a Will, you can specify who should inherit your KiwiSaver and other assets. This legal document allows you to name beneficiaries and streamline the administration of your estate. This is done by appointing executors and trustees to carry out your wishes.

If you pass away without a Will and your total assets, including KiwiSaver, are valued at more than $15,000, the assets will be held until Letters of Administration are granted by the court. This can be a lengthy and expensive process for your loved ones to deal with. 

Having a Will in place ensures that your KiwiSaver, along with your other assets, is distributed according to your wishes. While estate administration may still involve legal formalities like Probate, it’s generally quicker and more cost-effective when a pre-existing Will. This way, you can help ensure that your assets, including your KiwiSaver, benefit the people you intend to support.

How do I claim a deceased KiwiSaver?

Claiming a deceased KiwiSaver involves navigating a thoughtful and administrative process to ensure a smooth transition of funds. Promptly notifying the KiwiSaver company about the member’s passing is the initial step. This is done by contacting the customer service or bereavement support team, which guides you through the subsequent procedures.

Gathering the required documentation is crucial. Importantly, the information required does not revolve around investment strategies or whether the deceased joined KiwiSaver self employed for example. A death certificate, details of the deceased’s KiwiSaver, and relevant legal documents (Will or grant of probate), should be compiled. The provider will furnish the necessary claim forms, which need to be meticulously filled out by you.

Proof of the relationship to the deceased, especially if you are the executor of the estate, is typically required. This could include being named in the will or having been granted probate. Additionally, bank account details must be submitted, specifying where the funds should be transferred, usually to the deceased’s estate.

Upon completion, a waiting period ensues as the KiwiSaver company reviews the documents and processes the claim. This can be a very stressful and difficult time, dealing with the loss of someone close to you. Unfortunately, these processes can take time, and it’s important to stay patient. Once the claim is approved, the funds will be distributed according to the deceased member’s will. In cases where there is no will, distribution follows the laws of intestacy.

It’s essential to recognise that the specific process might vary slightly across the KiwiSaver industry. Therefore, reaching out directly to the relevant company for precise instructions and forms is advisable. It’s good to know such a procedure even when first joining KiwiSaver. Seeking legal advice or assistance in handling deceased estates can also prove invaluable throughout this intricate process.

According to the Financial Markets Authority KiwiSaver NZ 2024 Annual Report, the average person has a balance of $33,514. This figure is up 16.5% from the previous year. 

Meanwhile, the total number of people who have completed the KiwiSaver sign up process and are currently members is 3,334,654. People joining KiwiSaver lifted this figure up by 2.5% from the previous year.

Your balance is a combination of your own contributions, plus your employer and the government, and your KiwiSaver performance. When using KiwiSaver self employed, your own and employer contributions are the same thing. The three types of contributions (you, employer, and government) collectively make up your overall contributions. Your KiwiSaver company invests contributions in your chosen funds to yield a positive return on your investment. Thus, the purpose of joining KiwiSaver is to incentivise Kiwis to save and invest for the future.

Out of 3,334,654 people registered in KiwiSaver, only 2,036,384 members contributed to their accounts. If they don’t contribute themselves, this means they don’t receive any government or employer KiwiSaver benefits either. Thus, they are solely reliant on investment performance for their balance to increase. When answering how does KiwiSaver work, this is a crucial point to grasp. 

With KiwiSaver NZ being established in 2007, it is relatively young compared to other retirement schemes. Therefore, the median KiwiSaver scheme balance is still relatively low (although growing at a good rate). Consistent contributions and incremental returns will undoubtedly lead to growth in the average balance and maximisation of KiwiSaver benefits. 

Whether considering KiwiSaver self employed or your employer has handed you a KiwiSaver sign up form, you shouldn’t think twice. It’s never too late to start saving for retirement, and joining KiwiSaver is a great way to start.