+ Who is Compound Wealth?

Compound Wealth is an independent Financial Planning firm specialised in the provision of tailored wealth management and protection planning services.

We exist to help New Zealanders make smarter financial decisions and do this by taking into account not only our client’s financial considerations but their lifestyle objectives.

As advocates of financial literacy, we help people understand key concepts such as the miracle that is compound interest.

"Compound interest is the most powerful force in the universe... and the eighth wonder of the world. He who understands it... earns it. He who doesn’t... pays it."​ - Albert Einstein

+ Why you can trust us?

At Compound Wealth, we pride ourselves on having a team of Financial Advisers that have been Authorised by the Financial Markets Authority (FMA), as well as holding Bachelor of Commerce Degrees majoring in Finance. Check out the link to meet the team and see their relevant qualifications.

Further, we have over 20 five-star Google reviews, over 20 five-star Facebook reviews and over 1,000 clients who trust our advice on over $30 million of funds. We pride ourselves on delivering the best possible outcomes for our clients, and we are extremely happy to have so many clients already working towards their financial goals.

Compound Wealth is registered on the Financial Services Provider Register as FSP720532. We are therefore subject to audits by the FMA and have to comply with all relevant legislation.

+ Who is the team behind Compound Wealth?

Adam Stewart is Managing Director and owner of Compound Wealth. Adam has previous work experience directly with a KiwiSaver provider prior to launching Compound Wealth in 2017. Adam has also worked in the Financial Services industry in Hong Kong for 18 months. Adams qualifications include a Bachelor of Commerce Degree majoring in Finance and Commercial Law, obtained from the University of Victoria, Wellington. Further, Adam has obtained his Level 5 certification in Financial Services completing the Investment, Insurance and Residential Lending modules.

+ What services does Compound Wealth offer?

Compound Wealth offer financial advisory services in respect to KiwiSaver, Investments, life and health insurance. We pride ourselves on providing an excellent initial service, working with our clients to get them into a solution that best suits their needs. However, our advice doesn’t stop there as we continue to uphold regular communication and review with our clients to ensure that their solution remains the most appropriate one for their personal situation. We have implemented the appropriate software and personnel to achieve these outcomes.

+ Does Compound Wealth only work with one provider?

No, at Compound Wealth we work with a number of different product providers so we can deliver our clients the best possible outcomes.

+ What is KiwiSaver?

KiwiSaver is defined by the IRD as a ‘New Zealand savings scheme’, however at Compound Wealth we see KiwiSaver as an investment vehicle. KiwiSaver is voluntary and is designed to help New Zealanders save for their first home and retirement. Some quick facts about KiwiSaver:

• It’s a voluntary investment scheme set up by the Government
• You can only withdraw from your KiwiSaver for…
  • first-home deposit
  • reaching the age of 65
  • financial hardship, moving overseas permanently, terminal illness or death
• You can choose to contribute between 3% and 10% of your gross (before tax) pay
• Your employer must match your contributions to a minimum of 3%
• The Government assists you by contributing $521.43 each year (as long as you meet certain criteria)
• You choose a KiwiSaver scheme to invest your money with
• You also choose the fund type (i.e. growth, conservative, balanced etc.) which is offered by your KiwiSaver provider.

+ How does KiwiSaver work?

KiwiSaver is a voluntary, investment scheme driven from work based contributions but also available to member contributions outside of direct pay. Your KiwiSaver funds are held by an independent KiwiSaver provider, who manage your funds on your behalf. You have the choice in appointing a KiwiSaver provider and the fund type that suits you best.

KiwiSaver is available to all New Zealand citizens and permanent residents that normally reside in New Zealand. Having a KiwiSaver does not make you ineligible for Superannuation payments, it is extra money on top of the New Zealand superannuation that you can use when you reach 65 (or for first home deposit).

You are automatically enrolled in KiwiSaver if you meet the following criteria:

• eligible to be enrolled
• starting work with a new employer
• aged between 18 and 65.

If you are eligible for KiwiSaver, but not a KiwiSaver member yet, you can enrol by:

• asking your employer for a KiwiSaver employee information pack and completing a KiwiSaver deduction form
• choosing a provider and signing directly with them online.
• taking our online fact find to be provided with a KiwiSaver recommendation that best suits your personal situation, we will then perform all other work necessary to have you signed up.

If you're a salary or wage earner your employer may enrol you in KiwiSaver when you start a new job. You can stay enrolled, or you can opt out.

If you’re already employed but not a KiwiSaver member you can join either through your employer or through a KiwiSaver provider. Once you’ve joined, you will not be able to opt out.

If you stay enrolled you are required to contribute between 3% and 10% of your before tax pay. If you don’t choose a contribution rate, the default rate of 3% will be applied as a deduction. This is an automatic deduction from your pay therefore once you are enrolled there is no need to perform any additional work to contribute towards your KiwiSaver scheme.

If you're self-employed or not working, you can join KiwiSaver by contacting a KiwiSaver provider directly.

+ When did KiwiSaver start?

The KiwiSaver scheme was started on Monday, 2nd July 2007. KiwiSaver was started by the 5th Labour Government of New Zealand headed by Helen Clark. KiwiSaver has remained in operation ever since, now boasting over $70 billion of funds under management (as per Morningstar) which is assisting New Zealanders all across the country with their first home and retirement savings.

+ What is the best KiwiSaver?

The best KiwiSaver fund is different for every person, given KiwiSaver funds are suited to different people. Different KiwiSaver providers have varying investment approaches, such as active management and passive management. Similarly, different KiwiSaver providers have ethical investment options which ensures their funds are excluding industries and companies that are harmful to the community or the environment. On top of that, some KiwiSaver providers offer additional features such as mobile phone apps, being New Zealand owned and operated, accidental death insurance, $0 fees when balances are under a certain threshold, lifecycle investment options and much more.

Only once you have determined the features that are in line with your values, you can start comparing fees and KiwiSaver scheme investment strategies. Please note that comparing fees in isolation to anything else is often misleading given investors are often willing to pay a premium for additional features and excess returns.

A great place to start comparing returns after fees, and fees, is the Morningstar KiwiSaver Survey. Further, they take industry averages for each fund category so you can compare directly against the market.

At Compound Wealth, we specialise in matching people with the best returning, most appropriate fund for their situation. Please check out our KiwiSaver services if you are interested in finding out more on how we can assist.

+ What is the best performing KiwiSaver?

The Morningstar KiwiSaver Survey is an independent research hub that directly compares KiwiSaver schemes against each other based on their fund type (i.e. Conservative, Moderate, Balanced, Growth and Aggressive). They detail the best returns over a range of different time periods including from the most recent 3 months all the way to the most recent 10 years.

At Compound Wealth, we constantly summarise the best returning KiwiSaver providers and funds in our blogs.

Do note that the past returns don’t guarantee future performance, and there are several other factors including fees, ethical investment options, mobile phone app capability, investment strategy and much more that your decision for KiwiSaver provider and fund type should take into consideration. If you want assistance with choosing a KiwiSaver fund that both maximises your returns and is in line with your preferences and personal situation, please check out our KiwiSaver services.

+ Can kids under the age of 18 be enrolled in KiwiSaver?

Yes, children can be enrolled in KiwiSaver. People under the age of 18 are considered to be a ‘minor’ as per KiwiSaver regulations and face tighter signing restrictions as follows:

• People aged 16 to 17 require one parent or legal guardians signature on top of the typical on boarding process.
• Children under the age of 16 require both parents or legal guardians signatures on top of the typical on boarding process.

Do note that anyone under the age of 18 is not entitled to receive the KiwiSaver Government Contribution of $521.43, however KiwiSaver is still a great way to give your kids a low-cost investment fund to get them into their first home as soon as possible.

+ Which KiwiSaver provider has the lowest fees?

To compare fees that different KiwiSaver schemes and funds charge, check out the Morningstar KiwiSaver report. Morningstar is an independent research hub that compares KiwiSaver schemes against each other and the industry average.

Do note that fees should not be your sole basis for selecting a KiwiSaver fund that is right for you. Different KiwiSaver providers offer various different features, and have different investment strategies (active v passive for example). Further, some KiwiSaver providers have historically greater returns after fees, which is a key metric to consider (although past returns do not guarantee future returns).

If you want assistance with selecting the KiwiSaver fund that is right for your personal situation, please check out our KiwiSaver services.

+ What is the safest KiwiSaver?

Your KiwiSaver fund is invested with a KiwiSaver provider, and each KiwiSaver provider has your money held by a trust. These trusts are entirely independent from the KiwiSaver provider and have the obligation of ensuring that your KiwiSaver scheme complies with any legal obligations. The trust is ‘ring-fenced’ from your KiwiSaver provider, therefore if your KiwiSaver were to experience financial difficulty, or go bankrupt, your KiwiSaver balance would not be affected. This holds true for all KiwiSaver providers, therefore they are all safe when thinking about your funds from this perspective.

The safest KiwiSaver from a returns perspective is subjective. People often associate negative returns (returns below 0%) as unsafe and a loss, however it is only a loss if you realise your returns (i.e. withdraw your funds into cash or switch from an aggressive or growth fund into a conservative or cash fund). If you are looking to withdraw your KiwiSaver in the short term (less than 3 years) and want to protect your KiwiSaver from any market declines, then a cash or conservative fund is the safest. However, if you have a longer period of time until the withdrawal of your KiwiSaver, then a balanced, growth or aggressive fund will suit you better. This is because you can ride any adverse market swings, and take advantage of any upswings in the market. When you have a long investment horizon, the risk is missing out on any gains on your KiwiSaver.

+ Can I lose all my money if my KiwiSaver provider goes bankrupt?

Your KiwiSaver balance is not held by your KiwiSaver provider, rather a trust. These trusts are independent of your KiwiSaver provider and hold the obligation of ensuring that your KiwiSaver scheme complies with all legalities. This means that your KiwiSaver scheme provider does not have access to your KiwiSaver in the event of bankruptcy, therefore you will not lose any money if your KiwiSaver provider goes bankrupt. Do note that this is the case for ALL KiwiSaver providers.

+ Is KiwiSaver compulsory?

Joining the KiwiSaver scheme is not compulsory, however it does include several benefits as follows:

• Government contributions: The Government will contribute $0.50 for every $1.00 you contribute up to a maximum contribution of $521.43. Therefore, if you personally contribute $1,042.86 each year, you will receive the maximum amount. Do note that the KiwiSaver year end date is 30 June.
• Employer matched contributions: Your employer is legally required to match your KiwiSaver contributions up to a minimum of 3%. Therefore, if you are employed by a Company, and are contributing the minimum amount towards KiwiSaver (3%) then you are legally eligible to be paid another 3% by your employer.
• Investment gains: Having your money in the bank only accumulates interest as dictated by you bank, which is likely very low. Having your money invested with KiwiSaver allows you to choose your KiwiSaver scheme provider and fund type, therefore allowing you the best opportunity to maximise your gains.

Do note that you only opt-out of KiwiSaver between the end of week 2 and week 8 of starting work (i.e. between day 14 and day 56). If you don’t opt out, you will continue to be enrolled and will be unable to opt out unless you start a new job or apply for a savings suspension.

+ How do Government contributions work?

The Government will contribute $0.50 for every $1.00 you personally contribute towards your KiwiSaver account each year. You do not need to contact the Government or IRD to get this additional contribution, they are already aware of any contributions made towards your KiwiSaver scheme.

The maximum amount a KiwiSaver member can receive is $521.43 annually, therefore the maximum you need to contribute towards your KiwiSaver scheme in a year is $1,042.86. The KiwiSaver year begins on 1 July each year, and ends on 30 June, please note that this is one quarter later than that NZ tax year.

Eligible contributions towards your Government contribution include salary and wage KiwiSaver deductions and voluntary contributions towards your KiwiSaver.

Do note that you must be aged between 18 and 65 to receive the Government Contribution, live in NZ normally and be a member of KiwiSaver for the entire year. If you are a member for part of the year (or turned 18 part way through the KiwiSaver year) you will only be eligible for a pro-rated amount.

+ How do employer matched KiwiSaver contributions work?

If you are a KiwiSaver member working in New Zealand for a Company, then you are eligible to employer matched contributions. Your employer is legally obliged to a minimum of 3% towards your KiwiSaver on top of your existing salary, as long as you contribute the minimum towards your KiwiSaver (which is also 3%). Your contributions are pre-tax, whereas your employer contributions are post tax. Therefore, if you contribute 3% of your salary towards your KiwiSaver, your employer contributions will be less given theirs is post tax.

+ Why your employers KiwiSaver contributions don’t match your personal KiwiSaver contributions?

Your employer is legally entitled to contribute a minimum of 3% towards your KiwiSaver scheme as long you contribute the minimum (3%), therefore it would make sense that your KiwiSaver contributions match your employers if you are contributing 3%. Here’s why they don’t match:

• Tax deductions: Your employers KiwiSaver contributions are subject to ESCT (Employer Superannuation Contribution Tax) whereas your personal contributions are not. Therefore your employers contributions are net of tax, but your personal contributions are not. You do have a tax burden associated with your personal contribution, however this only effects your net pay, not your KiwiSaver contribution.
• Timing: Often the timing of your personal contributions will not match that of your employer contributions. This is because the employers will pay their KiwiSaver contributions in bulk to the IRD with their PAYE tax, student loan payments and so on. The IRD perform a different set of calculations at different times for your personal contributions to them including PAYE, KiwiSaver etc and that of your employer.

Remember that to be eligible to receive legally obliged matched KiwiSaver contributions from your employer, you must between the age of 18 and 65, if you are over age 65 you must have been a member of KiwiSaver for 5 years prior to be eligible, not already receiving payments into another superannuation scheme and contributing more than 3% towards KiwiSaver (which is the minimum).

+ Where does my money that I contribute to KiwiSaver go?

Your money is invested by your KiwiSaver scheme provider into a fund of your choice. If you haven’t made a decision in regard to your KiwiSaver provider and fund type then you would have been enrolled in one of the default KiwiSaver providers and have your money invested in their default fund type which is of a conservative nature.

Your KiwiSaver fund is invested in a mix of growth and income assets. Growth assets include company shares / stocks, listed property and unlisted property. Income assets include bonds, cash and cash equivalents. When you choose your KiwiSaver fund, you determine that KiwiSaver fund with the correct asset mix for your personal situation, as well as the provider that aligns with your goals and preferences.

Once your money is invested, you will rely on capital gains generated on your investment, as well as both dividends received, and interest earned to grow your KiwiSaver balance. When you check your KiwiSaver balance, you see what your investment is valued on that day. If you were to withdraw your investment into cash, that is likely what you would be to receive (subject to slight timing discrepancies and any fees involved with withdrawing).

+ Can I transfer my Australian Superannuation to my KiwiSaver?

You can transfer your Australian Super to your KiwiSaver, but only if you have moved permanently to New Zealand. There are a number of reasons to do so including:

• Lower fees: Having your Australian Super transferred to your pension means that you will only be paying fees on one investment rather than two.
• Management: If both your Australian Super and NZ KiwiSaver are with a KiwiSaver scheme, then it is easier to view your entire retirement balance.
• Taxes: Transferring your Australian Superannuation over to KiwiSaver does not incur any taxes for either entry to NZ or exit from Aus.

Once you have transferred your Australian Superannuation over to your New Zealand KiwiSaver scheme, you are unable to transfer it back unless you permanently emigrate back to Australia. Also, your Australian Pension will become subject to New Zealand KiwiSaver regulations, and continue to have some of its own regulations stand including:

• If you move to another country that is not Australia, you’ll be ineligible to withdraw your Australian Superannuation funds only.
• You are eligible to withdraw your Australian Super money from your KiwiSaver once you turn 60 (whereas KiwiSaver funds are only when you turn 65).
• You are ineligible to use any transferred Australian Super money across to KiwiSaver towards a first home and any Australian pension Super transferred is not eligible for the NZ First Home Grant.
• Any money transferred across from Australia Super to KiwiSaver does not count as a personal contribution for the purposes of the Government contribution, therefore you will still have to personally contribute $1,042.86 to your KiwiSaver, in the KiwiSaver year, if you want to receive the maximum Government contribution.
• Any UK pension funds that have been transferred to your Australian Super cannot then be transferred to your KiwiSaver.

To transfer your Australian Super over to KiwiSaver, please get in touch.

+ Can I transfer my UK pension to my KiwiSaver?

You cannot transfer your UK pension to your KiwiSaver, however you can transfer your UK pension to an approved New Zealand Overseas Pension Scheme (ROPS). Do note that once your UK Pension has been transferred, you cannot transfer it back.

To transfer your UK pension to a New Zealand Superannuation fund, please get in touch.

+ List of current default KiwiSaver providers

See below for a list of current default KiwiSaver providers:

• AMP Services (NZ) Limited
• ANZ New Zealand Investments Limited
• ASB Group Investments Limited
• Booster Investment Management Limited
• BNZ Investment Services Limited
• Fisher Funds Management Limited
• Kiwi Wealth Limited
• Mercer (NZ) Limited
• Westpac New Zealand Ltd

+ Which KiwiSaver fund is best for me?

Determining a KiwiSaver fund that is the best for you is dependent on your investment goals, personal preferences and tolerance for risk. When determining a KiwiSaver fund, it’s best to think of your intentions for your KiwiSaver and the investment horizon of when you plan on withdrawing a large chunk of money for either your first home deposit or retirement. Once you have an idea of investment horizon, then you need to decide whether there are any preferences you want to align with including socially responsible investing, leveraging, single sector funds, the list goes on.

To determine which fund is best for your personal situation, we have written a series of blogs that outline some basic determining factors so you can make an educated decision in regard to your KiwiSaver fund.

If you want assistance with making a decision on your KiwiSaver fund, please click the link to find our KiwiSaver page outlining the steps to take to receive your personal free KiwiSaver statement of Advice.

+ Which KiwiSaver scheme is best for me?

There are several varying KiwiSaver providers to choose from. When deciding on whether your KiwiSaver scheme is right for you, it is best to have your preferences in mind. Some KiwiSaver providers offer free accidental death insurance, socially responsible investing, donations of fees to charities, varying investment strategies, single sector and niche KiwiSaver funds, mobile apps, budgeting tools and so on.

A large determinant for KiwiSaver scheme choice is also fund performance. For a comparison of fund performance, please refer to the Morningstar KiwiSaver report.

If you want assistance with making a decision on your KiwiSaver fund, please click the link to find our KiwiSaver page outlining the steps to take to receive your personal free KiwiSaver statement of Advice.

+ How to check my KiwiSaver?

If you cannot remember who your KiwiSaver is invested with, follow the instructions below to access your KiwiSaver:

• The first place to check is your online banking portal. Often your bank will sign your KiwiSaver across to them when performing other tasks for you, and often NZ KiwiSaver investors forget this has happened.
• Then next place to check is the IRD website. Log in to the IRD portal, then click on the hyperlink ‘KiwiSaver Member’. This will then bring you to a page which details your KiwiSaver ‘Scheme Provider’.

Once you have found which KiwiSaver scheme you are invested with, it is time to login to your KiwiSaver. To log in to your KiwiSaver, find your KiwiSaver providers website and attempt to login as a member. If you are unable to do so, please follow the instructions that your KiwiSaver scheme will provide you with to either have a new password sent to your email or a contact phone number to ring to organise a new login.

+ How do I change my KiwiSaver fund?

To change your KiwiSaver fund, simply login to your KiwiSaver portal and follow the instructions to change fund type. Remember that you should determine your KiwiSaver fund based on investment horizon, tolerance for risks and preferences. For further information which KiwiSaver fund type (i.e conservative, moderate, balanced, growth, aggressive) is right for you, refer to the FAQ 'Which KiwiSaver Fund is the best for me?' as above.

If you want a personal statement of advice to make a decision in regard to which KiwiSaver fund would best suit you and your goals, please refer to the link.

+ How do I change my KiwiSaver provider?

You do not need to know who your KiwiSaver balance is currently invested with to change to a new KiwiSaver scheme. Simply find the website of the new KiwiSaver scheme in which you want your balance invested with and follow the instructions on how to join. Your new KiwiSaver provider will then perform all transfers from your previous provider and ensure that your KiwiSaver is invested with them in the fund in which you choose.

Do note that at Compound Wealth, we provide New Zealanders with advice on their KiwiSaver. We take into account personal preferences, goals, risk tolerance and investment horizon to determine both a KiwiSaver provider and scheme that best suits your needs. Once we have made a recommendation, we can also transfer your funds from your previous KiwiSaver scheme to your recommended scheme. If you want a personal statement of advice on your KiwiSaver, please follow the link.

+ What percentage should I contribute towards my KiwiSaver?

If you are employed, the minimum amount you can contribute towards your KiwiSaver fund is 3% of your salary or wage. If you contribute 3% or more, your employer is legally required to contribute 3% towards your KiwiSaver on top of your existing salary/wage. Therefore, it is recommended that every New Zealander should contribute at least 3% toward their KiwiSaver to give themselves an instant 3% pay rise (if not doing so already).

There are also good arguments for contributing more than the minimum towards your KiwiSaver which we have touched on in the blog post linked. Ultimately, the more you contribute early the greater chance you have of accumulating capital gains on your investment, which in turn increases your KiwiSaver balance in the future.

+ Can I invest in a KiwiSaver that is sustainable and good for the environment?

There are now several KiwiSaver schemes that allow you to invest your balance in a fund that is socially responsible. These KiwiSaver providers offer funds that consider impacts on the community, environment and governance when deciding on which Companies to invest in. KiwiSaver providers that offer ethical investment funds include CareSaver, Booster, AMP, ASB, Craigs and ANZ.

There are varying degrees of how ethical KiwiSaver funds are. The majority of socially responsible KiwiSaver funds perform negative screening to ensure that companies that invest in nucleur power, adult entertainment, fossil fuels, tobacco etc. are excluded from their investment list. There are investment funds that go one step further and perform both negative and positive screening, positive screening meaning that they choose the most ethical companies to invest in, rather than just excluding companies.

To find out more on ethical KiwiSaver funds, check out Sorted’s write up on funds that provides comprehensive coverage on all things socially responsible KiwiSaver.

+ KiwiSaver saving suspension

KiwiSaver members can take a temporary break from contributing their salary or wage towards their KiwiSaver scheme using a ‘Savings Suspension’.

If you want to apply for a Savings Suspension, you must login to MyIR and select ‘KiwiSaver Member’. You then must select ‘Apply for a savings suspension’ and follow the instructions detailed.

Once the application is completed, yourself and your employer will be sent a notice detailing whether or not your savings suspension has been approved. This notice will detail how long the suspension is for, and will apply to your next payment of wage or salary.

Do note that you only take a savings suspension once you have been a member of the KiwiSaver scheme for over 12 months. You can choose take a KiwiSaver saving suspension for between 3 and 12 months.

+ How is my KiwiSaver taxed?

KiwiSaver providers offer funds that are defined as Portfolio Investment Entitie’s (PIE’s). It is important to note that PIE funds, and therefore your KiwiSaver scheme, are not taxed on any capital gains made. Therefore, if your balance increases by $5,000 in a tax year, you will not be taxed on that $5,000.

PIE funds are subject to Prescribed Investor Rate (PIR) tax, which is a tax on any income derived from the investment. Your KiwiSaver is likely made up on stocks, bonds, cash and cash equivalents. The income derived from your KiwiSaver account is therefore in the form of dividends and interest, which is all subject to PIR tax. PIR tax is determined from your total taxable income in the most recent two tax year (i.e. 1 April – 31 March). It is likely your total taxable income will be derived from salary or wages.

To find out your PIR, please refer to the link.

+ How to withdraw my KiwiSaver?

The KiwiSaver scheme was introduced to get New Zealanders into their first home and to ensure that they generate a substantial retirement nest egg. With that in mind, please see below for a list detailing the possible scenarios in which you can withdraw your KiwiSaver:

• First-home deposit
• Turning 65 years of age
• Permanently moving to a different country
• Experiencing significant financial hardship
• Serious Illness
• Life shortening congenital condition

+ How to withdraw from KiwiSaver when you turn 65?

The majority of KiwiSaver members are eligible to begin withdrawing from their KiwiSaver account when they reach the age of 65.

The only exception to the rule is members who joined KiwiSaver prior to 1 July 2019 and haven’t been a member for over 5 years. These members are ineligible to withdraw from their KiwiSaver scheme until 5 years has passed from account establishment.

A point to note before making a retirement withdrawal upon reaching 65 years of age. Once you make your first withdrawal, you will opt out of your ‘lock-in’ period and therefore you will ineligible for any further Government contributions and legally required employer matched contributions (although your employer may continue to match your contributions at their discretion).

Another point, you do not need to withdraw your entire KiwiSaver balance when you turn 65. KiwiSaver is a very cheap investment option in comparison to other managed funds on the market, therefore it is great way to stay in the market to continue investing. You can make lump sum withdrawals from your KiwiSaver, or periodic withdrawals (i.e. monthly, yearly) depending on how much money you plan on using.

To make a withdrawal, simply get in touch with one of our advisers who will provide you with all necessary documents. Further, if you want understanding on how to invest in retirement, get in touch with our advisers.

+ How to withdraw your KiwiSaver when you permanently move to another country?

Moving to Australia

If you are permanently moving to Australia, you will be able to transfer your KiwiSaver balance to a complying Australian Superannuation scheme. Do note that you will only be able to access KiwiSaver money transferred to an Australian Super scheme when you reach the age of 65 (current age of access for Australian Superannuation money is 60). Also note that there is no tax obligations to be paid when transferring your KiwiSaver balance to an Australian Superannuation scheme.

Moving to other countries

You can withdraw your entire KiwiSaver fund once you have been overseas for at least one year, when you move to any country other than Australia. The only money you cannot withdraw includes:

• Any Government contributions received to your KiwiSaver scheme
• Any Australian Superannuation money that you have transferred to your KiwiSaver balance

+ How to withdraw your KiwiSaver for significant financial hardship

If you are experiencing significant financial hardship and need to withdraw your KiwiSaver balance, you must reach out to your KiwiSaver scheme provider for a financial hardship withdrawal form. Do note that you must be able to prove you are experiencing significant financial hardship in order to have your application accepted. See below for valid reasoning:

• Cannot pay mortgage on the home in which your normally reside in and your mortgage provider is looking to call upon your mortgage
• Cannot pay for medical treatment for yourself or a dependent family member
• Cannot pay for the funeral costs of a dependent family member
• Cannot pay for modifications to your home in which you normally reside in for a dependent family member that has special needs
• Cannot meet your minimum living expenses

+ How to withdraw your KiwiSaver for serious illness

You can withdraw your entire KiwiSaver balance if you are diagnosed with a serious illness, injury or disability. To determine serious, the illness, injury or disability must:

• Totally and permanently make you unable to work a job that you would typically work
• Terminally ill

You must be able to prove the seriousness of your condition by obtaining a declaration from a medical practitioner, as well you personally making a statutory declaration.

+ How to withdraw your KiwiSaver for a life-shortening congenital condition

If you have been diagnosed with a condition that is expected to decrease your life expectancy to below 65, you may be eligible to withdraw your KiwiSaver funds early. Similar to withdrawal for serious illness, you will need to prove the seriousness of your condition by obtaining a declaration from a medical practitioner as well as personally making a statutory declaration.

If you make a withdrawal from your KiwiSaver account as a result of your condition, you will be ineligible for any further Government Contributions and employer matched contributions, however your employer may still match your contributions at their discretion.

+ How long does a KiwiSaver withdrawal take?

Once your KiwiSaver withdrawal application has been accepted for either first home purchase, turning 65, significant financial hardship, serious illness, moving overseas permanently or life shortening congenital illness, your KiwiSaver funds should reach your bank account in between 10 and 15 business days.

+ Can I withdraw my KiwiSaver to pay off my debt?

You can only withdraw your KiwiSaver balance if you meet one of the criteria as defined in the 'How to withdraw my KiwiSaver' FAQ above. Once you have withdrawn your KiwiSaver funds, you are entitled to use the cash in any way you please. Do note that if your mortgage on the home that your normally live in is being called upon as a result of inability to meet mortgage payments, you may qualify for significant financial hardship which would allow you to directly withdraw your KiwiSaver for the purposes of settling the mortgage.

+ Can I withdraw my KiwiSaver for my first home deposit?

If you have been a KiwiSaver member for over 3 years, then you can withdraw your KiwiSaver balance to use as a deposit on your first home. Do note that you can withdraw your entire KiwiSaver balance including any Government and employer matched contributions that you may have received, however, you must leave a minimum of $1,000 in your account. You also must intend on living in the property you are purchasing, i.e. it cannot be an investment property.

+ How to withdraw your KiwiSaver for your first home deposit?

If you are deemed eligible to withdraw your KiwiSaver for your first home deposit, then you need to contact either your KiwiSaver provider or adviser to obtain a ‘First home entitlement’ letter. This letter will prove your eligibility to withdraw funds and state the amount can withdraw from your KiwiSaver.

+ Can I withdraw my entire KiwiSaver balance for my first home?

You can withdraw all funds that make up your KiwiSaver balance including any Government contributions, Government kick-starter and employer matched contributions. Do note that you must leave $1,000 in your KiwiSaver account i.e. if your KiwiSaver balance was $35,000, you could only withdraw $34,000.

+ How long does the KiwiSaver withdrawal take for first home purchase?

Once you have successfully completed your application to withdraw money from your KiwiSaver scheme, your funds should be released into your bank account within 10 to 15 working days. Please contact either your KiwiSaver provider or KiwiSaver adviser if the funds do not show in your account after 15 working days.

+ Can I use my KiwiSaver for a deposit if I am a previous homeowner?

There are limited instances whereby you can use your KiwiSaver balance towards a deposit on a home if you have previously owned a home. Criteria are based on being in a similar financial position as that of a first home buyer. See below for criteria:

• You have not previously withdrawn your KiwiSaver to buy a home
• You have been part of the KiwiSaver scheme for over 3 years
• You no longer have an interest in a property
• Your net realisable assets total less than 20% of house price cap for existing houses in your area, see link (link)

+ Can I withdraw my KiwiSaver to purchase land?

You can withdraw your KiwiSaver balance to buy land as long as you intend on living on that land at some point. You must apply for the KiwiSaver first home withdrawal prior to buying the land. Do note that there is no time frame for when you must build a house on that land.

+ Are there any fees associated with withdrawing your KiwiSaver for first home purchase?

No, there are no fees association with withdrawing your KiwiSaver fund to purchase your first home. This is a complimentary service from your KiwiSaver provider and adviser.

+ How much money can I get from the KiwiSaver First Home Grant?

How much money you are eligible to receive from the KiwiSaver First Home Grant is dependent on a range of factors. See below for a detailed list:

• If you are applying for the First Home grant to buy an existing property, you are eligible to:
  • $3,000 if you have been a contributing KiwiSaver member for 3 years
  • $4,000 if you have been a contributing KiwiSaver member for 4 years
  • $5,000 if you have been a contributing KiwiSaver member for 5 years
• If you are applying for the First Home grant to buy a new build property, you are eligible to:
  • $6,000 if you have been a contributing KiwiSaver member for 3 years
  • $8,000 if you have been a contributing KiwiSaver member for 4 years
  • $10,000 if you have been a contributing KiwiSaver member for 5 years

If you are buying your property with somebody else, you are both entitled to the First Home grant as above (i.e. to a maximum of $20,000).

+ Can I get the KiwiSaver First Home Grant?

See below for the criteria you must reach to be eligible for the KiwiSaver first home grant:

• Be at least 18 years old
• Have earned less than $85,000 in the 12 months before applying for the grant if you are purchasing the property by yourself, or earned less than a combined total of $130,000 in the 12 months before applying for the grant if you are purchasing the property with at least one more buyer
• Not currently have an interest in any other property
• Have been contributing at least 3% of your wage / salary towards KiwiSaver for over 3 years
• Property price must be within regional house price cap as linked
• You must live in the house for at least 6 months

+ KiwiSaver grant First home property eligibility

New build properties include properties that have been built within 12 months of applying for the First Home grant, vacant sections that are to be built on and house and land packages off the plans. Existing properties include any properties that were built over 12 months ago.

Housing price caps are as follows:

• Auckland and Queenstown
  • $600,000 for an existing build
  • $650,000 for a new build
• Hamilton, Tauranga, Western Bay of Plenty, Kapiti Coast, Porirua, Upper Hutt, Wellington, Tasman, Nelson, Waimakariri, Christchurch and Selwyn
  • $500,000 for an existing build
  • $550,000 for a new build
• Rest of New Zealand
  • $400,000 for an existing build
  • $450,000 for a new build

See the linked page for more detail.

+ How to apply for the KiwiSaver First Home grant

The Government entity Kainga Ora is responsible for receiving applications and distributing funds in respect to the KiwiSaver First Home grant.

You can either apply for a pre-approval before you purchase the property, or a grant approval once you have purchased the property. It is recommended that you apply for pre-approval to ensure that you have access to the KiwiSaver First Home grant.

Pre-approval

Please see the link to apply for pre-approval for the KiwiSaver First Home grant. Do note that this pre-approval is only valid for 6 months prior to house purchase, if you haven’t bought a house in this time period you must reapply.

Grant approval

Please see the link to apply for grant approval for the KiwiSaver first home grant.

+ Which KiwiSaver is best for purchasing a first home?

You should always select a KiwiSaver scheme provider based on your investment horizon, risk tolerance and product preferences. With that being said, having an adviser on your KiwiSaver is the best way to ensure that you both receive your first home entitlement letter in a timely manner, and are in a fund that suits your investment time frame, risk tolerance and preferences.

If you are looking at purchasing a first home within the next 2 years however, it is highly recommended that you consider a fund of either conservative or cash nature. This will reduce your exposure to growth assets and therefore adverse market swings. Please get in contact if you want to speak to an adviser in regards to the best KiwiSaver provider and fund for your personal situation.

+ Which KiwiSaver providers do Compound Wealth work with?

At Compound Wealth, we can assist you with switching from any KiwiSaver provider, in to one of the KiwiSaver scheme providers we work with. We work with the following KiwiSaver providers:

• AMP KiwiSaver scheme
• ANZ KiwiSaver scheme
• AON KiwiSaver scheme
• Booster KiwiSaver scheme
• CareSaver KiwiSaver scheme
• Fisher Funds KiwiSaver scheme
• Generate KiwiSaver scheme
• KiwiWrap KiwiSaver scheme
• Milford KiwiSaver scheme
• Superlife KiwiSaver scheme
• Summer KiwiSaver scheme

+ How does Compound Wealth providE free KiwiSaver advice?

At Compound Wealth, we do not charge our clients for the advice we give on KiwiSaver. We are remunerated by KiwiSaver scheme providers for the work that we perform via an adviser fee. This adviser fee is charged to the KiwiSaver provider, not our clients. Therefore, if you were a current member of Milford KiwiSaver and wanted to be advised on your Milford KiwiSaver, you could appoint Compound Wealth to give you assistance without having your fees change.