How to Withdraw Your KiwiSaver

The 6 Reasons You Can Withdraw KiwiSaver in New Zealand

1. Buying Your First Home

For first home buyers a KiwiSaver withdrawal can be a great kick-start to saving enough money for your mortgage deposit. First-time home buyers may be eligible to withdraw KiwiSaver savings to put towards a first home. To be eligible for this option you must:

• Be purchasing your first home;
• Have been a KiwiSaver member for at least three years and meet other criteria;
• Be a New Zealand citizen or resident;
• Intend to live in the property for at least six months.

You can use your KiwiSaver to purchase a section / land without a house. You can also use your KiwiSaver towards a house and land package.

If you plan to make a withdrawal for a first home within the next 5 years, you will need to ensure you are in the appropriate fund for this savings goal and timeframe. A more conservative fund type may be better for your KiwiSaver.

Your Adviser or your provider will provide the necessary forms and guide you through the withdrawal process.

2. Withdrawing for Retirement

The most common way to withdraw your KiwiSaver is through retirement. The retirement age in New Zealand is currently 65. You can start withdrawing your funds when you reach the age of 65. If you joined before 1 July 2019 and have been a member for at least 5 years, you may qualify for early retirement and can withdraw earlier.

If you choose to withdraw your funds at retirement, you have two options. You can withdraw the entire balance in a lump sum. Alternatively, you can take regular payments to provide you with an income.

3. First-Home Withdrawal for Previous Homeowners

If you previously owned a home but no longer do, you may be eligible for a Second Chance Home Buyer Withdrawal. This allows you to withdraw some of your KiwiSaver savings. You can put them towards purchasing another property. To be eligible for this option, you must have been a KiwiSaver member for at least three years. You must also meet other criteria, such as not having owned a home for at least three years.

4. Significant Financial Hardship Withdrawal

If you are having severe financial hardship, you may withdraw some of your KiwiSaver savings to help cover essential living expenses. You must meet certain criteria to be eligible for this option. For example, you must be unable to meet your minimum living expenses. You might also be facing significant medical expenses.

5. Permanently Moving Overseas

If you are permanently leaving New Zealand, you may be able to withdraw your KiwiSaver savings. You are eligible for this option if you have lived outside New Zealand for at least one year. You must also meet other criteria, such as not being a New Zealand citizen or resident. If you are moving to Australia, you can transfer your KiwiSaver account to an Australian super fund. Otherwise, you can leave them in KiwiSaver. It’s up to you.

6. KiwiSaver Withdrawal for Health Reasons

If you or a dependent has a life-threatening condition or serious illness, you may be able to withdraw part or all, of your KiwiSaver savings. You can use these towards medical expenses or other related costs.

You must meet certain criteria to be eligible for this option. The definition within the KiwiSaver Act means an illness, injury, or disability that;

• Results in you being totally and permanently unable to engage in work for which you are suited by reason of experience, education, or training (or a combination of these things); or 
• Poses a serious and imminent risk of death (within the next 12 months). 

Other Reasons to Withdraw Your KiwiSaver

There are other circumstances you may be granted withdrawal of your KiwiSaver savings;

• Death. In the event of your death, your executors or administrators will apply to withdraw your KiwiSaver savings. These will be paid to the executors or administrators of your estate.
• Relationship property. Your KiwiSaver is relationship property. Only the amounts you contributed during the time you were together (and any gains made from this money) are included. To protect your balance consider a ‘prenup’.
• Foreign tax liability or student loan debt. If you have incurred a tax liability or student loan repayment obligation, in either case, as a result of transferring funds from a foreign (non-Australian) superannuation scheme to KiwiSaver.

How do I Rebuild my KiwiSaver After Making a Withdrawal?

After making a withdrawal from your KiwiSaver account, rebuilding your balance is important for your long-term retirement savings. Remember, rebuilding your KiwiSaver balance takes time. Be patient and consistent with your efforts, and your balance will gradually recover and grow over time.

• Increase Your Contributions: If you’re currently contributing the minimum 3%, consider increasing it to 4%, 6%, 8%, or 10% of your salary.
• Voluntary Contributions: You can make additional lump sum payments or set up regular extra contributions to boost your balance faster.
• Maximise Government Contributions: Ensure you’re contributing at least $1,042.86 per year to receive the full annual government contribution of $521.43. This is essentially free money to help rebuild your balance.
• Review Your Fund Choices: Consider whether your current KiwiSaver fund type is appropriate for your age and risk tolerance. A more growth-oriented fund might help you rebuild faster, but it also comes with higher risk.
• Reduce Debt: If you have high-interest debt, prioritize paying it off. Once debt-free, you can redirect those payments to your KiwiSaver account.
• Stay Informed: Keep track of your KiwiSaver balance and performance. Many providers offer online tools and apps to help you monitor your account and set savings goals.

Conclusion

In summary, there are various ways to withdraw your KiwiSaver. You can do this if you meet certain criteria. You may be eligible to withdraw some or all of your KiwiSaver savings if you are retiring, buying your first or second home, facing financial hardship or a serious illness, or emigrating from New Zealand. Seek advice from a Financial Adviser before making any decisions.

We are committed to helping clients identify their optimal KiwiSaver strategy. We tie our success to yours, ensuring a vested interest in your financial well-being. Your success is our ultimate goal.

Further reading:

https://www.ird.govt.nz/kiwisaver

https://kaingaora.govt.nz/home-ownership/kiwisaver-first-home-withdrawal/

FAQs About KiwiSaver Withdrawal