KiwiSaver is a great way to save for retirement and all the KiwiSaver benefits may well make it right for you. So if you're under 65, here's why it might be right for you:
If you're under 18
- Your KiwiSaver savings are 'locked in' and normally cannot be withdrawn until you're eligible for NZ Super at age 65.
- When you start working, even if it's a part-time job, KiwiSaver contributions will be deducted from your wages at the rate of 2% of your gross pay, unless you choose to contribute at the rate of 4% or 8% or take a contributions holiday. The Government announced in the 2011 Budget that the minimum employee contribution rate and the default contribution rate will increase from 2% to 3% of gross salary or wages with effect from 1 April 2013.
- When you turn 18 you may be eligible for a member tax credit, and if you're working - compulsory employer contributions.
- With the FirstChoice KiwiSaver Scheme you can save as much or as little as you choose, until you start working.
- Although you won't get the up to $10 a week member tax credit from the Government, you will get the $1,000 kick-start contribution.
- By starting early your savings will have more time to grow.
If you're over 60.
- You'll get the $1,000 kick-start and you could get the member tax credit of up to $521.43 a year until you can take out your KiwiSaver retirement savings.
- You can join KiwiSaver anytime before you're 65 and you'll get access to your savings after five years (or in some cases earlier if you have been in a complying superannuation fund).
If you're already saving for retirement.
- Great news! You're already ahead of the game.
- It's still well worth thinking about KiwiSaver as well as, or instead of your existing savings.
- If you're not already receiving employer contributions, KiwiSaver may well be a better way to save.
If you're saving for your first home.
- After three years you may be able to withdraw your own contributions and your employer's contributions for use towards your first home purchase.
- At that time you may also be eligible for a first home buyer's grant of $1,000 for each year that you've been in KiwiSaver (up to $5,000).
- Both of these facilities will also be available to second-chance home buyers who meet the eligibility criteria as determined by HNZC. For more information see www.hnzc.govt.nz.
If you're self-employed or not employed.
- You'll enjoy the same benefits of KiwiSaver except for employer contributions of course.
- You can choose to save regular amounts, or simply make lump sum payments each year.
- There are currently no minimum contributions, so you can contribute as little or as much as you wish (subject to any minimum set by your scheme provider).
- If you're aged 18 to 65 and mainly live in NZ, the Government will contribute a member tax credit of $0.50c for every $1.00 you contribute up to a maximum of $521.43 a year.
You can make contributions to your KiwiSaver scheme either by making regular contributions, by setting up a direct debit with your chosen KiwiSaver provider, or you can make lump sum payments. It is important to note that some KiwiSaver schemes may have minimum contribution rates; but the FirstChoice KiwiSaver Scheme currently has no minimum contribution rate.
If you are self-employed and pay yourself a salary or wages (salary or wages is as defined in the KiwiSaver Act and includes most employment-related income that is subject to the PAYE tax regime) you may be treated as an employee and employer for the purposes of KiwiSaver contributions.
To join, you will need to select your own KiwiSaver provider. To do this, simply request an investment statement and complete the enrolment form for your chosen KiwiSaver scheme. Your KiwiSaver provider will notify Inland Revenue that you have joined KiwiSaver.
Find more information on the FirstChoice KiwiSaver Scheme under our individuals section.
Disclaimer
The FirstChoice KiwiSaver Scheme is provided by ASB Group Investments Limited.
The information contained in this website is for general informational purposes and is designed for use by New Zealand Residents only. None of the Crown, the Trustee, the Manager, ASB Bank Limited and its subsidiaries (the Banking Group), the Commonwealth Bank of Australia, or any other company in the Commonwealth Bank of Australia Group, or any of their Board members or directors (as the case may be), nor any other person or party, guarantees the securities offered in this website or the performance of those securities (including any of the investments or returns made in respect of the securities).
A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme is available here or by calling 0800 1ST CHOICE (0800 178 246).
