When your KiwiSaver account matures - for most of us this is at NZ Super eligibility age (currently 65) - you can have all the money. No tax. It's all yours. Woo, and indeed, hoo!
Some older people that joined KiwiSaver when it started had to be in KiwiSaver for 5 years, even though they reached their 65th birthday a while ago. I have already had two people tell me about their KiwiSaver windfalls on this Summer's barbecue circuit.
It's fair to say that they were cock-a-hoop. They only had 5 years of contributions, so it wasn't ever going to be their main retirement fund...but they did the maths and saw a handsome return in comparison to what they paid in. A nice treat was bought and paid for - and good on them.
But did they do the right thing there?
What happens to KiwiSaver once you reach maturity is quite good. You don't have to take out all the money if you don't need it all right now. It can remain invested for as long as you like. With many providers, you can even take out the investment earnings and leave the capital amount in there. It's up to you.
If you take all your KiwiSaver money out straight away, you can't join KiwiSaver again.
Once your KiwiSaver account matures, it becomes "on call" - accessible at any time. In that way, it continues to be useful, well into retirement.
Indeed, if you are around this age and you have other long-term savings vehicles, like a unit trust plan or a personal superannuation scheme - you could even look at throwing that money over to KiwiSaver. So if the KiwiSaver has not a lot in it, you can give it a boost with extra money from the other savings plans.
Why? The admin and management fees are generally much, much lower in KiwiSaver. Simple as that. Why pay more for essentially the same thing? Check this point with your provider and take their financial advice if you think this applies to you.
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