Helen Twose

Helen Twose on KiwiSaver and you

Helen Twose: Two investment vehicles give diversity

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Adding KiwiSaver to private superannuation scheme brings extra fees but can lead to a better retirement.

The KiwiSaver rules only let you take out money from KiwiSaver if it is to buy your first home. Photo / Mark McKeown
The KiwiSaver rules only let you take out money from KiwiSaver if it is to buy your first home. Photo / Mark McKeown

I work as a doctor for a DHB and contribute 6 per cent of my salary to the superannuation scheme which I am able to access when I am 55.
What are the benefits and disadvantages of joining a KiwiSaver scheme up and over the superannuation scheme?
I believe that KiwiSaver is locked in until age 65.
I have spoken to a number of KiwiSaver providers who were not able to provide clarity on this issue and I got the impression they were only interested in management fees.
Hardly independent advice!
There is a little bit of data on the Medical Assurance Society site but still not specific enough to make an informed decision.

The pros of KiwiSaver include:
•When applying to KiwiSaver, you will take advantage of the following government initiatives and subsidies:

$1000 Kick-start - an initial retirement boost by the Government to help start investing for your retirement.

Member tax credits - the Government contributes 50c to every dollar up to $1042.86 every year you personally contribute to KiwiSaver.

Please note if your superannuation scheme was a complying fund - a scheme with a similar membership criteria to KiwiSaver including availability to access funds at 65 - you will be able to take advantage of the member tax credit as well.

•If you have been a member of KiwiSaver for three years you may be able to withdraw your total contributions for a deposit of a first home (subject to terms and conditions).

"If someone currently owns a home or land they are not eligible, but those that have previously owned a home may be eligible.

Check with your KiwiSaver provider to see if you meet the criteria to withdraw your KiwiSaver savings.

More information can be found here.

• The great thing about KiwiSaver is that it is portable from job to job.

One downfall of a superannuation scheme is that it is an employer-based retirement saving initiative - only you and your current employer can contribute.

Once you leave, you can only make voluntary contributions until you can access your funds unless you transfer the savings to another scheme or a KiwiSaver scheme.

Cons of KiwiSaver:

•A superannuation scheme may provide earlier access to your retirement savings, as young as 50 years old.

However, accessing your money before accessing New Zealand Super at 65 (New Zealand's government pension plan - not to be confused with the employer-based superannuation scheme) might be risky as the earlier you access your funds, the earlier your retirement funding will run out, unless you use your savings wisely.

•No insurance attached - as part of being a member of a superannuation scheme, you may also have access to death and total and permanent disability cover. However, you should seek advice from your authorised financial adviser about whether sticking to your policy is right for you.

•A lot of providers advertise to take advantage of both options (that is, a superannuation scheme and KiwiSaver).

The advantage is that you can diversify your savings across two different investment vehicles for a better retirement.

However, keep in mind:

•You will be paying fees to both funds.

•Your employer is not obligated to contribute to KiwiSaver if they are already contributing to a superannuation scheme.

•If the superannuation scheme is a complying scheme, you will still receive the maximum $521.43 MTC across both schemes.
*Lilith Bohler, CANSTAR research analyst.


This item has been changed from a previous version that incorrectly said someone who already owned a home could be eligible to access their KiwiSaver savings to purchase a home.

This should have said those that those who previously owned a home may be eligible. Any current owner of a home or land is not eligible.


My query is this: around the corner from where I live a lovely house has come up for sale listed at $360,000.
Currently my KiwiSaver is roughly just short of $10,000 which means I would have a deposit of between $7000 and $9000 and the house mortgage would need 20 per cent, that is $60,000 to $75,000.
Is it possible in this day and age to take out a 100 per cent mortgage to cover the $360,000, rent out the house to cover the mortgage and then pay my KiwiSaver fund directly to the bank to reduce the mortgage?
It seems win-win!

On the surface, based on the information provided, what you contemplate is not possible.

The KiwiSaver rules only let you take out money from KiwiSaver if it is to buy your first home and then only if it becomes your principal place of residence.

It looks like you will not meet one of the tests as you plan on renting it out, and if you also have an existing house you fail the other test.

Also, you will have seen in the media recently, there has been some discussion on the potential changes in mortgage rules where banks will not be able to lend 100 per cent of the value of the house.
*Michael Chamberlain, SuperLife principal

•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.

To have your KiwiSaver questions answered by the Herald's panel of industry players, email Helen Twose, helentwose@gmail.com.

- NZ Herald

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