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Debunking five KiwiSaver myths

Think you know all you need to know about KiwiSaver? Or is a KiwiSaver myth keeping you from maximising your retirement savings?

There are many misconceptions about the scheme and the advantages and disadvantages of being a member. Here, we debunk five common myths.

I can only join KiwiSaver if I am a PAYE employee

Sure, being a contributing member is pretty straightforward when you are a PAYE employee, as your employer makes the deductions and pays them to IRD. However, even if you are self-employed or on a benefit, you can still join and contribute to KiwiSaver. You will just need to decide how much you want to contribute and then make the payments manually yourself.

And another tip – by putting in at least $1,042,86 each year between 1 July and 30 June, you will get an extra $521 from the Government. Yes, every year, and it’s literally free money.

Retirement is ages away: there’s no point having KiwiSaver until I am older

There’s no such thing as being ‘too young to save for retirement.’ In fact, the earlier you start saving, the more money you will likely have in retirement. And you will need to put aside less money on a regular basis to achieve your retirement goals.

Thanks to the power of compounding interest and the longer period of contributions, a small amount today may turn into a much bigger amount tomorrow. So if you can, don’t put it off for too long.

I have to go with the KiwiSaver provider my employer has selected

While all employers need to select a default provider, you don’t need to be stuck in a default scheme. You have the freedom to choose the provider you want, at any time. But before you do, keep in mind that talking to a KiwiSaver adviser can give you the extra knowledge you need to make an informed decision.

I can only access the money when I turn 65

As you’ll know, the full access is when you reach retirement age – which may or may not be 65 in a few years’ time. However, there are a few exceptions to this rule. For example, you can access the funds for a first-home deposit (subject to meeting the criteria) or if you are experiencing financial hardship (subject to approval).

Once again, it’s important to understand the implications of making an early withdrawal. For example, how would it impact your long-term goals?

I don’t earn much, so there’s no point in having KiwiSaver

Depending on your time horizon, even putting away as little as $10 per week can give you a nice little nest egg when you retire.

If you started at age 20, and put $10 per week aside, by the time you were 65 you would have $23,400 – without any interest/gains or Government contribution. Factoring in interest and compound interest could see that at over $100,000!

And even if you’re not that far from retiring, there are strategies you can put in place to make the most of your contributions. Please don’t hesitate to contact us if you’d like to give your nest egg a boost.


KiwiSaver is designed as a long-term retirement savings plan. By starting your contributions as soon as possible, and choosing the right fund for your needs, your retirement can be a lot more comfortable and enjoyable. Please don’t hesitate to contact us should you have any questions!


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