Saving for your retirement

While there’s no official retirement age in New Zealand, 65 years old is the target for many people. It’s the age when most superannuation plans begin to pay out your savings.

There are many other savings initiatives, including some that give you access to your money sooner. One of these is the government-legislated retirement plan called KiwiSaver.

KiwiSaver is a voluntary savings initiative run by the New Zealand government. It includes a number of benefits, and you can access your KiwiSaver savings after 5 years of contribution without penalty.

Some features of KiwiSaver:

• Eligibility: You can join KiwiSaver if you’re a New Zealand citizen, or entitled to live here indefinitely. People on temporary, visitor, work or student visas aren’t eligible.
   
• Government kick-start: The New Zealand government will start you off with a tax-free contribution of $1,000 towards your KiwiSaver savings.
   
• Government tax credit: Each year the government will give you a tax credit that matches the contributions you’ve made to your KiwiSaver account, up to $1,040.
   
• Employer contributions: If you’re making KiwiSaver contributions from your salary or wages, your employer will also make a tax-free 2% compulsory contribution.
   
• Making contributions: If you receive a salary or wage, your KiwiSaver contributions are automatically deducted from your pay at the rate of your choice: 2%, 4% or 8%. 

To learn more about KiwiSaver or to work out how much your KiwiSaver contributions will be depending on your salary, visit  KiwiSaver.

Other options
There are other savings options than KiwiSaver. Talk to a retirement adviser about these through your New Zealand bank. Or, to check out other ways to save for your retirement, or to find an adviser, visit the Institute of Financial Advisers website at www.ifa.org.nz.

Transferring your retirement savings to New Zealand

If you have a pension fund overseas and want to move it to New Zealand, you may be able to credit it to a pension fund here through your overseas funds holder. Check with your bank or investment organisation for more information.

• US-specific information:
  
  • Social Security benefits:  Unlike some countries, New Zealand does not have a reciprocal arrangement with the United States, which means you won’t be able to receive Social Security benefits after you leave. 
    Find more information about this on the Social Security website.
     
  • 401(k) savings account:  If you have a 401(k) savings account in the US, you can leave your funds in the account when you leave the country. In fact, if you withdraw your 401(k) savings, you’ll be subject to a tax penalty. By leaving your funds in your 401(k) you can collect them at retirement from wherever you are in the world, subject to US tax rates. Further, you can contribute to your 401(k) with any savings you make in New Zealand.
    For more detailed information about your 401(k), see the IRS website.
     
  • Transferring your US retirement funds to New Zealand
    Currently, there’s no simple plan to transfer your US retirement funds to KiwiSaver, but there are ways of crediting your funds to a pension fund in NZ. Find out more on the New Zealand Institute of Financial Advisors website.
     
• UK-specific information:
  The UK has a range of services to help you with your pension transfer to New Zealand. Check out the HM Revenue and Customs fact sheet (PDF, 467 KB) about Pensions and Individuals with International Interests.
  
  The HMRC acknowledges a number of New Zealand retirement schemes as a “qualifying recognised overseas pension scheme’ (QROPS) which means that you may be able to avoid a tax charge. For a full list of QROPS click here (PDF, 236 KB).
   

• Australia-specific information:
  New Zealand and Australia have recently set up a programme to make it easy to transfer your retirement funds from Australia to the New Zealand KiwiSaver scheme. 
  
  Find out more information about this arrangement here (PDF, 82 KB).

If you have complicated finances or think you’ll need some help with the transfer of your retirement funds, consider investing in an accountant. Ask your employer or New Zealand solicitor for a referral, or find an accountant on the NZICA website.