What is KiwiSaver?

KiwiSaver is a voluntary savings scheme in New Zealand that is designed to help individuals save for retirement. It is open to both employees and self-employed individuals. It was introduced in 2007 by the New Zealand government to help address the country's low savings rate and to encourage individuals to save more for their retirement.

When an individual joins KiwiSaver, they choose a scheme and a savings plan. They can then make regular contributions to their account, usually through automatic payroll deductions. Employers are also required to make contributions on behalf of their employees, and the government also provides incentives in the form of contributions.

KiwiSaver funds are invested in a range of assets such as shares, bonds and cash, members can choose the level of risk they are comfortable with. The funds are managed by professional fund managers, and members can switch funds or providers at any time.

KiwiSaver funds can be used to purchase a first home or for retirement income, with certain conditions and restrictions apply.

Why KiwiSaver?

Automatic savings

Contributions are typically made through automatic payroll deductions, making it easy for individuals to save regularly without having to think about it.


The funds are invested in a range of assets such as shares, bonds and cash, and are managed by professional fund managers, which helps diversify an individual's investments.

First home assistance

KiwiSaver funds can be used to purchase a first home and the government also provides a HomeStart grant which is a financial assistance for first home buyers to help them with the purchase of a home.


Individuals can choose the level of risk they are comfortable with and switch funds or providers at any time.

Retirement income

KiwiSaver funds can be used as a source of retirement income.

Eligibility for New Zealand superannuation

The money that is saved in the KiwiSaver account is locked until the member reaches the age of eligibility for New Zealand Superannuation (currently 65 years old) or meet the criteria for an exception withdrawal such as buying a first home, significant financial hardship, serious illness or death.

Government incentives

The government provides incentives such as govt contributions to encourage individuals to save for their retirement.


How your kiwiSaver income is taxed?

Your KiwiSaver provider invests your contributions so they earn money for you. You pay tax on the money your investment earns, but you do not pay tax on any money you withdraw from your KiwiSaver account.

To use the right tax rate you need to know what kind of KiwiSaver scheme you're in. These can be either:

  • widely-held superannuation schemes; and
  • portfolio investment entities (PIEs).

Your provider's product disclosure statement tells you which type of scheme you're in.

If the KiwiSaver scheme you belong to is a widely-held superannuation fund, your investment earnings are taxed at 28%. Alternatively, if the KiwiSaver scheme you belong to is a Portfolio Investment Entity (PIE), your investment earnings are taxed at your Prescribed Investor Rate - either 28%, 17.5%, or 10.5% depending on your individual circumstances.

Portfolio investment entity KiwiSaver schemes

All the KiwiSaver default schemes are portfolio investment entities (PIEs). A PIE invests in different types of funds. Your scheme provider taxes your investment earnings using the prescribed investor rate (PIR) you choose.

Prescribed investor rates

A prescribed investor rate is a tax rate. It's based on your total taxable income in the last two income years (1 April to 31 March), for example income from salary, wages and any other income.

Source: https://www.ird.govt.nz/kiwisaver/kiwisaver-individuals/taxing-kiwisaver-income

Should I consult with a Financial Adviser about my KiwiSaver?

Consulting with a financial adviser about your KiwiSaver account can be very beneficial as they can provide expert advice and guidance on how to manage and grow your retirement savings.

  • Review your current KiwiSaver account and provide recommendations for changes, such as switching to a different fund or increasing your contribution rate.
  • Help you understand the different types of KiwiSaver funds available and the potential risks and returns associated with each one.
  • Provide advice on how to optimise your KiwiSaver fund for your specific financial goals, such as saving for a first home or retirement.
  • Help you understand the tax implications of your KiwiSaver contributions and withdrawals and how they may affect your overall financial plan.
  • Provide guidance on how to withdraw your KiwiSaver savings, such as under the first home withdrawal scheme or significant financial hardship withdrawal.
  • Help you create a comprehensive financial plan that takes into account your KiwiSaver savings, along with other investments and assets.
  • Provide ongoing support and review of your KiwiSaver account to ensure it aligns with your goals and risk tolerance.

Should I invest in KiwiSaver funds or a managed fund?

Whether you should invest in a KiwiSaver or a managed fund depends on your specific financial goals and risk tolerance. Both options can provide a way to save for retirement, but they have different features and potential risks and returns.

  • KiwiSaver is a government-supported retirement savings scheme in New Zealand.
  • Employers are required to make contributions to their employees' KiwiSaver accounts, and you can also make personal contributions.
  • You can choose from a range of investment funds with different levels of risk, including conservative, balanced and growth options.
  • You can get government contributions and first home withdrawal.
  • Convenient automatic contributions.
  • You will have to reach your retirement age to access KiwiSaver funds.
Managed Funds
  • Managed funds are professionally managed investment portfolios that pool money from multiple investors.
  • They can be invested in a wide range of assets, such as shares, bonds, property, and cash.
  • Managed funds can offer higher returns, but also carry higher risks.
  • You will have more investment options.
  • May require more active management on your part.
  • You can withdraw the money if you need to.

It's important to consider your investment goals, risk tolerance, and overall financial situation when deciding whether to invest in a KiwiSaver fund or a managed fund. It's also a good idea to consult with a financial adviser for personalised advice and guidance.

When should I consider switching KiwiSaver funds?

It is a good idea to switch your KiwiSaver fund, if:

  • Your risk tolerance has changed

    If you've become more or less risk-averse over time, it may be a good idea to switch to a fund that aligns with your new risk tolerance.

  • Your investment goals have changed

    If your investment goals have changed, you may need to switch to a fund that aligns with your new goals.

  • Your current fund has high fees

    If your current fund has high fees, switching to a fund with lower fees could help you save money in the long run.

  • Your current fund is no longer suitable for your current stage of life

    If you are in a different stage of life and your current fund is not suitable for your current stage, you may want to consider switching to a fund that aligns with your current stage of life.

  • You want to have a more diversified portfolio

    If you want to have a more diversified portfolio, it can be a good idea to consider switching to a fund that invests in different types of assets, rather than just one type of assets.

  • You are nearing retirement

    You may want to consider switching to a more conservative fund to protect your savings.

It's important to remember that switching funds can also have its own risks, such as losing out on potential returns if the new fund performs poorly. It's a good idea to consult with a financial adviser before making a decision to switch your KiwiSaver fund, they can help you understand the pros and cons of different schemes and help you make an informed decision that aligns with your goals and risk tolerance.

Who gets my KiwiSaver if I die?

If you die, your KiwiSaver savings will be paid to your estate. Your estate is the total of all your assets, including any cash and investments, property, personal possessions and any other assets you may own. Your estate will be distributed according to the terms of your will, or if you do not have a will, according to the laws of intestacy in New Zealand.

If you have nominated a beneficiary for your KiwiSaver account, the money will be paid directly to them. A beneficiary is someone you have nominated to receive your KiwiSaver savings in the event of your death. This can be done through your KiwiSaver provider.

It's important to keep your will and your beneficiary nominations up to date to ensure your assets are distributed as per your wishes. It's also good to review your will and beneficiary nomination regularly to make sure they are still aligned with your current wishes and circumstances.

Important information and disclaimer

  • Any advice on this publication is of a general nature only and has not been tailored to your specific circumstances. Before taking action on this information, please seek your personal advice. Past performance is not a reliable guide for future returns. The information on this page reflects our understanding of the existing legislation, standards, etc.

    In some cases, the information has been provided to us by third parties. While the information is believed to be accurate and reliable, but this is not guaranteed in any way.

  • Neither AIFP nor its responsible persons or employees give any warranty of accuracy, nor accept any responsibility for errors or omissions in the information provided on this page.