Although KiwiSaver has now been around for over ten years, there is still some confusion about the advantages and disadvantages of being a member. Here, we clear up five of the more common misperceptions.

I can’t join if I am self-employed

While you will need to make the contributions yourself, you can still join KiwiSaver and also benefit from the Government contribution. You will need to decide how much you want to contribute and then make the payments manually yourself (IRD can give you some information on this).

Just remember – the Government will contribute an additional 50 cents for every dollar you put in up to a maximum of $521.43. That’s like free money – so make sure you are contributing the maximum amount of $1042.86 each year, and you’ll get the maximum contribution.

I’m too young to worry about saving for my retirement right now

Not true. The earlier you start saving, the more money you will have in retirement, which means the amount you need to save on a regular basis could be less (of course, the more you do save, the more you have available to enjoy in your retirement).

If you start young, a small amount eventually turns into a big amount with the addition of compounding interest and the longer period of contributions. The later you leave it, the bigger your regular contribution will need to be to make up for the years you weren’t putting money aside and weren’t getting the benefit of compound interest.

I can’t choose my own provider

Not so. You can choose your own provider, whether you join through your employer or you join directly yourself. All employers need to select a default provider, which you will originally be enrolled into, but you do have the freedom to choose the provider you want: you don’t need to be stuck in a default scheme.

I can’t touch the money until I am 65

Well, actually, access is only available when you reach retirement age – which may or may not still be 65 in a few years’ time.

However, there are some situations that you can access the money prior to retirement age, subject meeting the criteria around this. Funds can be accessed for a first-home withdrawal to help you buy your first house (a definite bonus in the current market), and you may also be able to withdraw the funds early if you are experiencing financial hardship. Each provider will have different rules around this, so approval to access is on an individual basis.

There’s no point contributing if I can’t afford to put much in anyway

While it may seem like building a comfortable retirement fund is a long way off when only contributing a little bit, putting away as little as $10 per week can give you a nice little nest egg when you retire. And of course, the earlier you start, the more you can take advantage of compounding returns and interest – that is, earning interest on top of interest to give your own savings a welcome boost.


Please note that the content provided in this article is intended as an overview and as general information only. Please use your discretion and seek advice before making any decisions based on the information provided in this article.