Debunking five KiwiSaver myths

Five KiwiSaver myths

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

I can only join KiwiSaver if I am a PAYE employee

Being a contributing member is probably easier if 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 – the Government will contribute an additional fifty cents for every dollar you put in up to a maximum of $521.43. Yes, that’s like free money.

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

Remember: the earlier you start saving, the more money you will have in retirement – and you will need to save less on a regular basis to achieve your retirement goals.

If you start young, a small amount eventually turns into a big amount with the addition of compounding interest and the longer period of contributions. The later you leave it, the bigger your regular contribution will need to be, to make up for all the years you weren’t putting money aside and weren’t getting the benefit of compound interest.

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

While all employers need to select a default provider, you have the freedom to choose the provider you want – you don’t need to be stuck in a default scheme.

I can only access the money when I turn 65

Well, actually, the full access is only when you reach retirement age – which may or may not still be 65 in a few years’ time. However, you can access the funds for a first-home deposit (subject to meeting the criteria) or if you are experiencing hardship (subject to approval).

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

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!


KiwiSaver is designed as a long-term retirement savings plan. By starting contributions early, and choosing the right fund and provider, your retirement can be a lot more comfortable and enjoyable.


**This is intended to provide general information only. It does not take into account your investment needs or personal circumstances. It is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser. Please note past performance is not a guarantee of future performance.

An Adviser Disclosure Statement is available free and upon request.