Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose: KiwiSaver still an option after 65

There's no reason for seniors to stop contributing but the government stops paying tax credits.

Senior workers can keep contributing and employers may too. Photo / Getty Images
Senior workers can keep contributing and employers may too. Photo / Getty Images

I am a New Zealander returning to live here after working in Australia. I have an AMP superannuation fund in Australia with a death benefit. I would like to transfer my fund to KiwiSaver when this becomes possible. But what will become of the death benefit cover?
Generally KiwiSaver schemes don't include a life insurance component, so if you transfer your super unfortunately you'll most likely lose your current death benefit entitlement.

The best thing you can do is to have a chat to a financial adviser and find out what insurance options are available to you here - there's bound to be an option to suit.

They'll also be able to help you with the transfer of your super and in packaging a solution that best meets your needs.

•Fiona Oliver, AMP general manager, wealth management.

I am contributing 8 per cent of my salary to KiwiSaver. I turn 65 in May and would like to remain with KiwiSaver until I finish work in, for example, five years' time.

Can I continue to contribute after I have turned 65? I will also be receiving super then. My employer is happy to top up 2 per cent.
The short answer is, yes, you can. When you become eligible to withdraw your KiwiSaver savings (currently when you turn 65 as long as you've been a KiwiSaver member for at least five years), it's up to you - you can choose to pull out your retirement savings or continue to make contributions, and it's great that your employer has agreed to continue contributing.

It's important to note, you will stop receiving member tax credits (that's the annual government contribution to your KiwiSaver account) on any contributions you make after you become eligible to withdraw your savings.

• Fiona Oliver, AMP general manager, wealth management.

A recent Herald story talked about lower rates of KiwiSaver membership among women, particularly those aged 30 to 40. I'm one of those women who have held off on KiwiSaver.
Currently I'm at home with three kids and don't see myself getting back into the workforce until they are all at school, and even then it would be on a part-time basis.
Before having children my focus was on paying off as much of the mortgage and preparing financially to drop back to living on just my partner's wage when we had children. Retirement savings didn't really feature for me then either. Given that our family finances are put towards mortgage payments and day-to-day living what are the pros and cons of signing up to KiwiSaver versus getting the mortgage paid off sooner?

KiwiSaver allows you to save on a regular basis and helps you better prepare for your retirement in a way that a regular savings account can't, but when you're planning your financial future, working out what's right for you and your family can be daunting.

It's going to be different for everyone and that's where a financial adviser comes in, and in most cases an initial consultation is free of charge.

KiwiSaver does provide flexibility in the form of contribution holidays or you can make lump sum payments.

You can also change your required contribution between 2 per cent, 4 per cent and 8 per cent of your before-tax salary or wages at any time by notifying your employer of your new contribution rate.

The Government also contributes $1000 toward your KiwiSaver account when you join and if you contribute more than $1042.86 over a year you'll receive a member tax credit of $521.43.

•Fiona Oliver, AMP general manager, wealth management.

•Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

- NZ Herald

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