KiwiSaver withdrawal: Retirement, first home, hardship, and more

Withdrawing KiwiSaver when you retire

From age 65, you become eligible to withdraw your KiwiSaver savings. At this point, you have several options: 

• Continue your KiwiSaver contributions: This can be a smart move if you remain in employment or run a business, and allows your retirement savings to keep growing. It’s important to note, though, that government contributions usually end once you turn 65. Employers are also not legally required to contribute, unless they opt to
• Stop KiwiSaver contributions, but keep your account open and let your funds continue to grow via returns on your portfolio

• Withdraw all your contributions, including the government and employer contributions and investment returns

• Withdraw a portion and leave the rest invested so it continues to earn.  

Other retirees prefer to withdraw small amounts regularly to ensure their savings last throughout retirement. One popular strategy is the “4% rule,” wherein you withdraw 4% of your portfolio’s worth in the first year of retirement, from then on adjusting the withdrawal amount to keep up with inflation.

How to get your funds

To begin withdrawing, you need to contact your KiwiSaver provider directly. They’ll guide you through the process, provide the necessary forms, and explain available options.

First home withdrawal

KiwiSaver isn’t just for retirement. If you’re dreaming of owning your first home, you may be able to use your savings to help with the deposit. 

Eligibility criteria

To qualify, you must:

• have been contributing at least the minimum amount (3% of your total income) to KiwiSaver for at least three years
• be buying a home or land in New Zealand
• intend to live in the property (it cannot be an investment or rental property)
• have not made a first home withdrawal before.

If you’ve previously owned a home or land and are in the same financial position as a first-home buyer, you may still qualify under the second-chance withdrawal option.

What you can withdraw

• Your own contributions
• Your employer's contributions
• Government contributions
• Investment earnings
• Fee subsidies (if you received these).

You’re required to leave at least $1,000 in your KiwiSaver account. If you’ve transferred money from an Australian complying superannuation fund, those funds cannot be used for a first home.

How to apply

1. Contact your KiwiSaver provider to start the application.
2. Gather supporting documents and submit your application to your provider.
3. Your KiwiSaver provider will process the withdrawal and send the money to your solicitor’s account for settlement.

It’s important to apply well before your property purchase settlement date - most providers need at least 10 working days.

Second chance home withdrawal

If you’ve owned a home before, Kāinga Ora will check whether you meet the criteria for being in a similar financial position to a first-home buyer. To qualify, you must:

• not have previously used KiwiSaver for a home purchase
• have been a KiwiSaver member for at least three years
• no longer own any property (excluding Māori land).
• have realisable assets worth less than 20% of the house price cap in your area. Realisable assets include cash, investments, deposits, and high-value assets, such as extra vehicles, boats, caravans, or other individual assets valued over $5,000.

If approved, Kāinga Ora will provide a letter you can forward to your KiwiSaver provider in support of your application.

KiwiSaver withdrawal rules if you’re moving overseas

If you’re planning to move overseas permanently, you might be wondering what happens to your KiwiSaver fund. The rules depend on whether you’re heading to Australia or another country.

Moving to Australia

If you move permanently to Australia, you can transfer your KiwiSaver savings to an Australian complying superannuation fund. This is managed under the Trans-Tasman Retirement Savings Portability agreement.

• You cannot withdraw the money as cash, but you can consolidate it with your Australian super.
• Not all providers in New Zealand or Australia participate, so you’ll need to check with both your KiwiSaver provider and the Australian superannuation provider first.
• The transfer can be useful if you want to simplify your retirement savings and keep everything in one place.
• You also have the option to leave your KiwiSaver in New Zealand and let it keep growing.

Moving to other countries

If you’re moving anywhere else in the world, the rules are different:

• After you’ve lived overseas for at least 12 months, you can apply to withdraw most of your KiwiSaver balance.
• You can take out your contributions, your employer’s contributions, investment returns, and the $1,000 kickstart and fee subsidies if you received these.
• You cannot withdraw government contributions.
• In some cases, you may be able to transfer your KiwiSaver to an approved foreign superannuation scheme instead of withdrawing it.

How to apply

To get started, contact your KiwiSaver provider. They’ll ask for documents proving your permanent move, such as travel records or proof of residence overseas. The application process usually involves a statutory declaration, so make sure you allow enough time.

Withdrawing KiwiSaver due to bankruptcy and other life events

KiwiSaver is designed for retirement and first home purchases, but there are certain life events where you may need to access it earlier. 

Bankruptcy

If you are declared bankrupt, your KiwiSaver is considered an asset. However, while the money remains in your KiwiSaver account, it is protected from creditors. In some cases, you may be required to use it to help pay off debts, but this is managed through the insolvency process. Always update your provider with your new IRD number if one is assigned.

Separation

KiwiSaver savings may be treated as relationship property when a couple separates. This means they can be divided like other assets. It’s best to get legal advice if this applies to you.

Foreign tax liability and student loan payments

If you have transferred money from a foreign superannuation fund into KiwiSaver, you may be able to withdraw some of it to pay tax liability or foreign student loan obligations which arose due to the transfer. Your provider can help you with the process.

Death

If you pass away, your KiwiSaver balance becomes part of your estate. The executor of your will needs to contact your provider so the funds can be released. Make sure your family or the person handling your will knows which provider you’re with to avoid delays.

KiwiSaver withdrawals due to significant financial hardship

KiwiSaver is meant to support you in retirement, but there are times when life becomes financially pressured. If you are struggling to cover essential costs, you may be able to access some of your KiwiSaver early under significant financial hardship rules.

What counts as significant financial hardship

You may qualify if you:

• can’t meet minimum living expenses, such as food, basic transportation costs, power, water, and other utility bills
• can’t pay rent or board
• can’t catch up with mortgage repayments on the home you’re living in (especially if the bank is enforcing the mortgage)
• have a serious illness
• need to pay for your own or a dependant family member’s medical treatment, palliative care, or special needs home modifications
• need to pay for a dependant’s funeral costs.

How much can you withdraw?

If approved, you can withdraw your contributions and your employer’s contributions. Government contributions cannot be withdrawn. The amount you receive is limited to what is needed to cover your shortfall.

The application process

To apply, contact your KiwiSaver provider for their hardship form and other required documents. You’ll need to provide:

• Details of your income, expenses, assets, and debts
• Evidence of your hardship, such as overdue bills or medical invoices
• Proof you’ve already explored other options, like help from Work and Income (WINZ) or your bank.

You’ll also need to complete a statutory declaration, signed in front of an authorised witness. The scheme’s supervisor then reviews your application and decides whether to approve it.

If you are making a hardship withdrawal within the first two months of your KiwiSaver membership, apply to Inland Revenue. You need to fill out their form, provide necessary documents, and submit them to the IRD or online through myIR.

Other things to try first

Because withdrawing from KiwiSaver affects your long-term retirement savings, it’s considered a last resort. Before applying, check if you can:

• ask your bank for repayment flexibility
• access assistance from WINZ
• use other savings or investments
• seek help from budgeting services.

Tip: Use insurance as a safeguard

Early KiwiSaver withdrawals may provide short-term relief, but they can significantly impact your retirement fund. Depending on your circumstances and insurance cover - life, health, trauma, disablement, income protection, or mortgage protection - you could get help with living costs, mortgage or rent payments, medical bills, home modifications, or end-of-life needs. 

Some policies even keep up your KiwiSaver contributions if you’re unable to work due to illness or disability, helping protect you now and into the future.

To learn more, talk to a Policywise adviser or jump to the section “How insurance helps protect your KiwiSaver funds during tough times” below.

Withdrawing KiwiSaver due to serious illness

KiwiSaver is usually locked in until you turn 65, but there are special rules for those facing serious health issues. If illness, injury, or disability has changed your life, you may be able to access your KiwiSaver early.

What counts as a serious illness

You may qualify for an early withdrawal if you have an illness, injury, or disability:

• that results in being totally and permanently unable to do work suited to your education, skills, or experience, or any combination of those things, or 
• a condition that poses a serious and imminent risk of death
• a life-shortening congenital condition that means you are unlikely to live to the age of superannuation eligibility (65 years old). Note that if you withdraw your KiwiSaver for this reason, your employer and government contributions will stop.

What you can withdraw

If your application is approved, you can usually withdraw all of your KiwiSaver savings. This includes:

• Your contributions
• Your employer’s contributions
• Government contributions
• Fee subsidies (if you received these)
• Investment earnings.

How to apply

For withdrawals due to serious illness, the process depends on how long you’ve been a member:

• If you’ve been in KiwiSaver for less than two months, you apply through Inland Revenue.
• If you’ve been a member for longer, contact your KiwiSaver provider directly.

For withdrawals due to a life-shortening congenital condition, contact your KiwiSaver provider.

In either case, you’ll need to provide medical evidence, such as a doctor’s declaration confirming your illness or condition.

How insurance helps protect your KiwiSaver funds during tough times

Your KiwiSaver is designed to provide for your retirement, but life doesn’t always go as planned. Serious illness, disability, or sudden loss of income can pressure you into withdrawing from it early. The right type of insurance can reduce this risk, helping protect the retirement nest egg you’ve worked so hard to build.

• Medical insurance: Pays for private hospital treatment, surgery, cancer care, and non-Pharmac drugs. Some plans also include funeral support.
• Life, trauma, and disablement insurance: Provides lump sums if you or another insured family member suffers a critical illness or injury, terminal condition, permanent disability, or passes away. The funds can be used for anything the patient and family members need: housing and living expenses, debt payments, medical bills, home modifications, palliative care, or funeral expenses.
• Income cover or mortgage protection insurance: Provides monthly payments if you cannot work due to illness or injury. Some providers offer a retirement protection option wherein they will continue contributing to your KiwiSaver while you’re receiving insurance benefits.
• Business insurance: Helps safeguard business owners from risks such as illness, disability, or losing a key team member, so they can cover costs without dipping into KiwiSaver.

A real-life example

James, a 50-year-old husband and father of two, is diagnosed with a serious illness that requires costly treatments and several months off work. Without insurance or sufficient savings, he might have to dip into his KiwiSaver (which had reached $50,000 at the time) to pay for private medical costs, mortgage, and the family’s living expenses.

Fortunately, his health insurance covers his treatments, and income protection replaces part of his salary. His insurer also continues contributing to his KiwiSaver while he is unable to work and receiving income cover benefits. This allows James to focus on recovery without eroding his or his wife’s KiwiSaver savings.

How Policywise helps

Finding the right insurance cover doesn’t have to be complicated. At Policywise, we compare plans from New Zealand’s most trusted insurers to help you find affordable solutions that fit your priorities. The goal is to give you peace of mind while protecting the KiwiSaver funds you’ve worked so hard to build. Contact us today to discuss your insurance needs and options to suit. 

Why choose Policywise as your retirement partner

At Policywise, we make it easy for you to protect your retirement funds. If critical illness, injury, disability, or death impacts your personal or family income, your long-term financial plans shouldn’t fall apart.  

That’s why we set you up with the right insurance cover, so your KiwiSaver contributions stay on track and your retirement savings stay intact.

Check out the reviews on our homepage for how other New Zealanders have found our service, because now is the time to get your retirement and insurance plans sorted. Give your family or someone you love the most outstanding financial support possible. Book a 5-minute callback with Policywise today; our service is fast and free.