KiwiSaver is a great way to invest for the future you, whether you’re going to use it for your first home or not until retirement. But there’s more to it than you might think. Are you in the right type of fund for you? Are you paying too much in fees? How do you withdraw it?

Can KiwiSaver be used to pay off debt?

KiwiSaver is designed for two things: buying a first home and growing a nest egg for retirement. When times get tough, you can withdraw to keep food on the table and pay your living expenses. But typically it's not for repaying debt like credit cards, fines or infringement notices, debt collection agency bills, hire purchase debt for non-essential living expenses, holidays, or even travel to visit a sick relative. Here's how a hardship withdrawal works

I'm self-employed. Is KiwiSaver a good idea?

Independent earners can still get the government's contribution as well as returns from your money being invested in KiwiSaver. So even though it's primarily designed for employees, independent earners can still get a fair bit out of KiwiSaver, although it would be great if KiwiSaver worked a bit better for those of us who are self-employed. Here are some helpful considerations when you're self-employed

How does KiwiSaver work?

When you put money into KiwiSaver, it is joined by three more flows of money: from your employer, from the government and from the market (where that money is invested). That makes it so much more powerful than just regular saving. Employees are automatically opted into KiwiSaver, and money is generally available at age 65 (earlier for a first home). You don't have to be an employee, or even in paid work to be in it, although you do need to be living in New Zealand and be eligible to live here indefinitely. Here's how to get the most out of KiwiSaver

Which KiwiSaver fund is best?

The answer is different for everyone. You need to choose which fund to be in, so which is the best fund for you? It's important to pick your fund based on important criteria (not just because it's a familiar brand or something). If you didn’t actively choose a fund when you started in KiwiSaver, the government did this for you by putting you into one of nine “default” funds. This was to get you started, until you got around to making a choice yourself. But how do you pick one? First up is to find which type of fund is right for you.  

Can I use my KiwiSaver to buy a house?

Yes, along with growing a nest egg for retirement, buying a first home is one of the goals that KiwiSaver is made for. Part of the purpose of KiwiSaver is to help us grow assets, and one way is by using it for a first-home withdrawal when you've built up some money in it. The second way is through a KiwiSaver First Home Grant, which could give you as much as $10,000 more for a home. Find out more here

Still wondering?

If you’d like to discuss your own situation (even anonymously) or need further advice, contact MoneyTalks.

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