Are you looking to buy your first home and want to withdraw from your KiwiSaver? Or are you planning to retire? What you can remove depends on the length of time you've contributed.
There are exceptional circumstances to help if you're struggling with payments, which we'll cover below.
But first off — homebuyers.
How much can I withdraw?
Before you rush out, you need to have contributed to KiwiSaver for at least three years (more on that in another blog). KiwiSaver providers put this in place to make sure you're serious about your decision — there's no point in withdrawing money before you've had time to save!
Once you pass that three-year contribution mark, you can begin withdrawing, providing you can put down a 5% deposit (that's 5% of whatever the house is worth, paid upfront).
But, even if you have the savings and have waited three years, you might want to hold out a little longer if you're looking at a house. That's because there's a government subsidy that pays out $1000 for every year you save with KiwiSaver. If you're planning a new build, it's $2,000.
How do I withdraw from KiwiSaver?
Much of this blog covers home buyers, but the below applies to retirement withdrawals. The amount you can withdraw includes:
- Everything you put into KiwiSaver.
- Your employer's contributions.
- Any interest you earned.
- Any fee subsidies, which are benefits given to you, like cash payments or tax reductions.
This won't cover your Superannuation scheme for Australians, which stays in the bank.
If you're buying a new home or building for the first time, you can get up to $10,000 from the HomeStart grant.
You might also qualify if you've owned a home before — it pays to check first if you're uncertain. See the link at Kainga Ora — they're the ones to go to for all the application forms.
There are a few things to check off first to make sure you're eligible;
- You haven't received the Grant before.
- If you're the sole buyer, you earned $95,000 in the last 12 months.
- If there are 2 of you, you earned $150,000 in the last 12 months.
- You can put down a deposit or 5% or more on the price of the house.
I think I may need to save more.
If you want to save up more for that eventual home purchase, you may want to check up on your rate of KiwiSaver contribution.
When you start a new job, along with signing all your contract forms, you'll also sign up for a KiwiSaver. In doing so, you'll set a rate of contribution — that's a certain percentage of your wages to be paid into a KiwiSaver account.
There are 5 options when contributing; 3%, 4%, 6%, 8% or 10%. These are all standard rates — you can negotiate a larger percentage if you want.
If you're not sure what you're on right now, it's best to check. You might likely have been put on 3% by your employer. If you're uncertain, ask to see your contract.
If your KiwiSaver seems low and you've had it for a while, you might want to check on your rate of contribution and bump it up a little if you can.
Also, talk to your employer about switching up your KiwiSaver. Or, if you're self-employed, you can download the forms from the IRD's website. You can change your contribution rate every three months to pay off some other things if you ever feel like saving more or slowing down a bit.
If you're looking to withdraw from KiwiSaver for either a house or retirement, remember that KiwiSaver rewards you the longer you invest. That includes grants — the better you are at saving, the better the rewards.