Yes, there are situations where you can withdraw your money before reaching retirement age. If you are buying your first home, facing financial hardship, dealing with a serious illness or permanent disability, or moving permanently to another country, early withdrawals can be made under certain conditions according to New Zealand regulations.
KiwiSaver is a saving scheme in New Zealand that helps people save for their future retirement. While the main goal of KiwiSaver is to provide financial security during retirement, there are some situations where you can take out your money early. In this article, we will explain the conditions and circumstances under which you can withdraw your KiwiSaver money before you reach retirement age.
1. Buying Your First Home
If you’ve been a member of KiwiSaver for at least three years, you may be able to withdraw a portion of your savings to contribute towards buying your first home. The specific amount you can withdraw depends on various factors, such as whether you are purchasing alone or with a partner. However, it is important to maintain a minimum balance in your KiwiSaver account to meet the required threshold. You can use the withdrawn funds for the deposit on your home or to cover related expenses like legal fees, building inspections, or real estate agent fees.
2. Facing Financial Hardship
In situations of significant financial hardship, such as losing your job or facing a major illness, you may be able to access your KiwiSaver funds early. Financial hardship refers to facing severe financial difficulties, such as being unable to cover basic living expenses or facing the risk of losing your home. To be considered for a financial hardship withdrawal, you must meet specific criteria and provide evidence to support your application. Each case is assessed individually, and the final decision is made by your KiwiSaver provider, adhering to New Zealand regulations. If your application is approved, you can use the withdrawn funds to help cover essential living expenses or to manage outstanding debts.
3. Serious Illness or Permanent Disability
If you experience a serious illness or have a permanent disability in New Zealand, you may qualify for an early withdrawal of your KiwiSaver funds. This provision aims to provide financial support for medical treatment, rehabilitation, or adjustments to your living arrangements due to your health condition. To be eligible, you will need medical evidence confirming the nature and extent of your illness or disability. It is crucial to consult with your KiwiSaver provider and provide the necessary documentation as per the guidelines established in New Zealand. The withdrawn funds can be used to cover medical expenses, ongoing care, or necessary modifications to your home.
4. Moving Abroad
If you plan to permanently leave New Zealand and reside in another country, you may be eligible to withdraw your KiwiSaver funds. This recognizes that KiwiSaver primarily serves individuals during retirement in New Zealand. To initiate an early withdrawal, you will need to provide evidence of your intention to emigrate permanently, such as an overseas visa or proof of residence in another country. It is advisable to check with your KiwiSaver provider for any specific conditions or requirements they may have. The withdrawn funds can be transferred to your new country or used to support your settlement in the new location.
5. Dealing with Death
In unfortunate circumstances involving the death of a KiwiSaver member in New Zealand, their funds can be withdrawn by their estate. The funds will be distributed according to the member’s will or the laws of intestacy if there is no valid will. The executor of the estate will be responsible for providing the necessary documentation to the KiwiSaver provider. The funds can be used to settle outstanding debts, cover funeral expenses, or be distributed to the beneficiaries named in the will.
6. Bankruptcy
In cases of bankruptcy in New Zealand, your KiwiSaver funds may be accessible to creditors. The amount that can be claimed by creditors will depend on the specific bankruptcy laws and regulations in New Zealand. It is important to seek professional advice to understand how bankruptcy may affect your KiwiSaver funds. In some instances, a portion of your funds may be protected from creditors, ensuring you have some financial resources during and after the bankruptcy process.
Conclusion
Although KiwiSaver is designed as a long-term retirement savings program, there are situations where you can withdraw your money before reaching retirement age in New Zealand. Whether it’s for buying your first home, facing financial hardship, dealing with a serious illness or permanent disability, or moving permanently to another country, early withdrawals can be made under certain conditions according to New Zealand regulations. It’s important to understand the eligibility criteria and requirements set by your KiwiSaver provider, as they may vary. To explore the possibility of early withdrawal, contact your KiwiSaver provider directly and seek advice to make informed decisions about your financial future within the framework of New Zealand laws and regulations.
