I retired in 2007 at age 60 but my husband is still working. I am 64 now. I have just found out that I don't need to be working to join KiwiSaver. Is it too late for me to join now?
Any New Zealand resident under the age of 65 can join KiwiSaver.
You will get the $1000 "kickstart" and if you contribute at least $1042 in the 12 months from July then you will qualify for the maximum tax credit from the Government of $521.
Up until 30 June 2011 this was $1042, but it has been cut in half in the recent Budget.
The tax credit is worked out pro rata in the first year so if you join and make your first contribution say in September you will not get the full tax credit even if your contributions are $1042 or more.
You are unable to cash up your KiwiSaver until you are 65 or (in your case) you have been a member for 5 years.
Usually the Government tax credits will stop when the member turns 65 but in your case they will continue till you have been in the scheme for 5 years by which time you will be 69.
For most self-employed, unemployed or retired folk the easiest way to ensure you contribute enough to get the full Government tax credit is to set up a direct debit through your provider for $90 or $100 per month.
Most scheme providers will require a deposit of $100 when you open an account.
If this is received during July then your membership will be deemed to have commenced on 1 July for the purposes of calculating the Government tax credit for the year.
Even though the Government has reduced the tax credit by 50 per cent it is still a generous scheme.
After 5 years (lets assume there are no further changes to Government contributions) you will have put in at least $5210 yourself, but you will also have received a total of $3605 from the Government.
Shelley Hanna is an authorised financial adviser FSP12241. Her free disclosure statement is available on request by calling 8703838. The information in this article is of a general nature and is not intended to provide specific or personalised advice. If readers have any KiwiSaver questions they would like answered please send them to email@example.com or go to www.peak.net.nz.