Happy birthday KiwiSaver
2 July 2012
The Retirement Commissioner and groups with interest in retirement income policy are reminding KiwiSaver members that they don’t have to withdraw their KiwiSaver money when it becomes available, and they may even continue making contributions.
A small number of KiwiSaver members – those turning 65 who have also been in the scheme for five years – will be eligible to withdraw from 1 July this year. Retirement Commissioner Diana Crossan and finance sector groups are urging members to consider staying in the scheme past the age of 65.
A recent survey conducted by Workplace Savings NZ (of just over half of the total commercial KiwiSaver providers) found that almost all of these providers would happily retain the accumulated savings of those who qualify to withdraw, and offer future choice for these members.
Of those providers surveyed, none are intending to charge the member additional fees to access their funds under such choice arrangements. “Talk to your providers about what they are offering,” Ms Crossan said.
“Depending on your provider, there may be a number of options available. You might decide to withdraw all or part of your savings, or to stay in the scheme and either keep making contributions or leave your money invested.”
Those working after 65 can also ask their employers to keep making contributions. However members will no longer receive the government tax credits on their own contributions.
“Rather than withdraw a lump sum and spend it all at once, think about how you will use that KiwiSaver balance to support you in retirement,” Ms Crossan said.
“It’s a good idea to talk with an Authorised Financial Adviser to revise your goals, financial needs and risk profile and to work out the best course of action. There’s no need to rush. You can leave your money where it is while you work through all the issues. And remember that KiwiSaver was designed as a comparatively low-cost managed investment scheme for people wanting to save for their retirement. Once out, over 65s cannot rejoin,” Ms Crossan said.
Representatives from Business New Zealand, the Council of Trade Unions, Financial Services Council, Financial Services Federation, Institute of Financial Advisers, New Zealand Bankers’ Association and Workplace Savings NZ have endorsed the Retirement Commissioner’s advice.
For further information contact:
Meredith Keys (027) 203 3172