Q My job was getting too strenuous for me, so I resigned three months ago. I have been looking for a more suitable job but, at my age in my mid-50s, it isn't easy, and we are living on my wife's income. We are worried about rising interest rates and the impact that will have on our mortgage repayments. Over the past 10 years, I have been contributing to KiwiSaver and my balance is now over $42,000. What is happening with my KiwiSaver?
A While you are not working, your KiwiSaver account is still active but no employee or employer contributions will be going into it. Those payments will have stopped when you got your last pay check.
If you haven't already done so, set up a MyIR login with Inland Revenue so that you can track your payments. You can also see how much you have earned, and how much tax you have paid. You can also check your account by creating a login on your provider's website, or by internet banking if your provider is also your bank.
Because you are over 18 and under 65, you should receive a top-up from the government into your KiwiSaver by the middle of July. This will be up to $521 depending on how much you have contributed since July 1 last year. This top-up will go through whether you are currently working or not.
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If you can afford to make payments to your KiwiSaver account directly, saving $20 per week will entitle you to the full Government contribution in July next year. You can set up an automatic payment to your KiwiSaver provider. You should be able to find their bank account details through internet banking. If money is tight, wait until you have a job and in June next year you can work out if you need to top up your account then and by how much to get the full amount — if you are in a position to do so.
If at any time you find you are struggling financially and unable to keep up with rent or mortgage payments, talk to your bank and Work and Income. You may also consider a Significant Financial Hardship withdrawal from your KiwiSaver. This is subject to trustee approval and you must show that you have sought help elsewhere first. It is a good idea to get free advice from a budget adviser if you are considering this option. Not only can they help you with the application process, they can also give advice on Work and Income benefits, low interest (or no interest) loans and negotiating with creditors.
While you are not working, spend some time learning about your KiwiSaver. You can compare your fund with others on Sorted FundFinder. This online tool ranks all the KiwiSaver funds by returns, fees and service. It is a great starting point for anyone who wants to know where their KiwiSaver money is invested and if they are in the right fund for their risk appetite and timeframe. Other useful online tools are provided by the FMA, CanStar and Mindful Money.
- •Shelley Hanna is the communications manager with Peak Portfolio Management Ltd which is a Financial Advice Provider licensed by the Financial Markets Authority. Disclosure information is available at www.peak.net.nz or call 06 8703838. The information provided in this article is of a general nature and should not be relied on as a recommendation to invest in a financial product. Send your KiwiSaver questions to email@example.com