Managing your KiwiSaver account: KiwiSaver myth-busters
08 December, 2015
KiwiSaver has been around since 2007 but we still hear many common myths about KiwiSaver. It never hurts to bust a few of these.
MYTH #1: You have to take out all of your money when you reach 65
No you don't. You have a number of options available to you to suit your circumstances. Of course, you can withdraw all of it but you can also:
- Keep your savings in your KiwiSaver account — If you don't need your money straight away, you can keep it where it is and we'll continue to manage it for you exactly like we do now
- Setup a regular withdrawal — This is a convenient way to manage your money and supplement your pension or any other retirement income sources
- Make lump sum withdrawals at any time — Keep your money working hard in your KiwiSaver account with the comfort of knowing you can access your funds at any time to help with one-off expenses etc
- Use KiwiSaver as a one-stop-shop for other retirement savings you may have. A lot of our customers are looking for ways to combat low term deposit rates; KiwiSaver is a great way to diversify your money.
- There are many good reasons to consider keeping your KiwiSaver account open.
Learn more about using your KiwiSaver account in retirement and how this could work for you.
MYTH #2: KiwiSaver is only for employees
Not true. If you are self employed or not working then you can still join and take advantage of certain benefits that you would otherwise miss out on.
You can choose how much and how often you want to save, but if you can afford to contribute the equivalent of $20 per week ($1,042.86 per year) then the Government will contribute up to $10 per week ($521.43 per year) each KiwiSaver year. Note this applies to members aged 18 and over.
Subject to the normal criteria, you may also be to withdraw your eligible savings to help buy your first home and may qualify for additional help from the government via the KiwiSaver HomeStart grant.
MYTH #3: It doesn't really matter what fund I am in
Oh yes it does!
How your savings are managed is one of the most important decisions you can make about your KiwiSaver account. Even a small increase in the average annual return on your savings can make a significant difference to the value of those savings when you retire.
Everyone is different so most KiwiSaver schemes offer a range of funds to cater for people at various stages of their life. The right fund or mix of funds for you will depend on how long you have to save, your appetite for risk and your tolerance for ups and downs that will happen along the way.
If you haven't thought about this for a while, our investor profile questionnaire is a good place to start. Consider it 10 minutes well spent from the deck chair over the holidays!
Changing your investment strategy is easy. Simply complete the changing your investment options form and return it to us.