KiwiSaver

There are three ways to join KiwiSaver:

• Automatic enrolment when you start a new job.
• Opting in through your employer.
• Opting in through a KiwiSaver adviser or provider.

If you are self-employed or not currently working, contact your Wright Financial KiwiSaver adviser or your chosen provider, in order to sign-up and arrange a regular contribution amount.

The question isn’t “why” you should sign-up for KiwiSaver, it is “why not” because of the benefits it offers.

• If employed, your employer has to contribute at least 3% of your gross income into your KiwiSaver account. That’s on top of your own contributions.
• Your KiwiSaver contributions come out of your pay before you see it. This makes saving easy.
• The government pays into your KiwiSaver account as well as in the form of annual ‘member tax credits’ (if you are a contributing member aged 18 or over) of up to $521.00.
• As well as saving for retirement, you can also use KiwiSaver for buying your first home through a KiwiSaver HomeStart grant.
• If you change jobs or leave the workforce your KiwiSaver account moves with you.

If you experience hardship it is possible to access the funds in your account.

KiwiSaver is not compulsory yet. But, if you’re 18 or over and start a new job you’ll be automatically enrolled in KiwiSaver (with some exceptions). And that is a good thing!

• If you are automatically enrolled you can ‘opt out’ (leave KiwiSaver), but only between 2 and 8 weeks of starting the job. Once you join, you have to contribute for at least 12 months (If you’re 18 or younger and have been incorrectly enrolled, you can still opt out through Inland Revenue).
• You can choose to ‘opt in’ (join KiwiSaver) at any time – either through your employer or through a KiwiSaver adviser or provider.
• After 12 months in KiwiSaver, you are entitled to take a break from your savings contributions (called a ‘contributions holiday’).

Current legislation allows you to withdraw all KiwiSaver contributions (excluding $1,000) when buying your first home if you’ve been consistently contributing for at least three years. You may also qualify to withdraw your KiwiSaver if you have owned a property previously under the ‘Second Chance’ option.

In addition to a KiwiSaver savings withdrawal, there’s also the KiwiSaver HomeStart grant. If eligible, the government may contribute up to $5,000 (per member) towards buying an existing home, or up to $10,000 per member towards the building of a new home.

If you are using KiwiSaver to save for retirement, you can’t touch your money until you reach age 65 (currently). If you are between the ages 60 and 64 years old when you join, you cannot access the money until expiry of the five-year period from which you became a member.

Most KiwiSaver providers offer a range of investment funds. There are two key things to consider when choosing a fund. Its associated risk and return and the fees it charges.

Risk and return

The risk level of a fund is determined by the percentage invested in growth assets. These are types of investments like shares and property that have the potential for higher returns over the long-term and have a risk to decrease in value.

KiwiSaver providers generally describe their funds as being:

Type of fund      Risk profile
Defensive           Low risk
Conservative     Low to medium risk
Balanced            Medium risk
Growth               Medium to high risk
Aggressive         High risk