Managing your KiwiSaver account — KiwiSaver myth-busters part two
05 February, 2016
This month we continue the series we started last year "busting" a few of the common myths about KiwiSaver.
MYTH #4: You can get your money out when you want and use it for anything
No you can't.
KiwiSaver is primarily designed to help you save for your retirement. It is not like a bank account that you can withdraw funds from to pay your everyday bills so typically you can only withdraw your funds once you turn 65 and have been a member for five years.
Of course, sometimes life doesn't go to plan, so in limited circumstances you may be able to withdraw your funds early, for example, in the event of significant financial hardship, permanent emigration (excluding Australia) and serious illness.
Subject to meeting eligibility criteria, you may also be able to withdraw all of your KiwiSaver savings (less $1,000 and any amount transferred from an Australian Super Scheme) to help buy your first home.
MYTH #5: The government can take your money
No they can't.
The savings in your KiwiSaver account are 100% yours. It is held in trust for you on your behalf in the name of an independent trustee, Trustees Executors Limited (TEL). Their sole function is to protect the interests of KiwiSaver members and other investors. TEL is New Zealand's oldest and largest trustee, supervising over $30 billion of investors' assets.
MYTH #6: I have to join the KiwiSaver provider my employer tells me to
No you don't.
While employers can nominate a preferred KiwiSaver provider that new employees who aren't already KiwiSaver members are automatically enrolled into, you are free to choose your own KiwiSaver provider at any time. This also applies to existing employees.
There are many things to consider when choosing your KiwiSaver provider. We think the following factors are important:
- Access to financial advice to help you invest your savings appropriately
- Regular communication to help you understand what is happening with your money and why
- Consistent long-term performance
- Little extras like reminders to top up your KiwiSaver account to maximise the annual Government contribution
- Competitive fees