Ask Susan: Are there age limits on KiwiSaver?
Is there an age limit on KiwiSaver?
There’s no age limit. But after 65, your employer does not have to give you its contribution any longer – although some may choose to – and you won’t get the member tax credit from the government, of $521 a year.
That’s pretty much the same situation as for people who are under 18 when they join the scheme.
Even if you are no longer working and contributing to KiwiSaver, you can keep your KiwiSaver account active. Sometimes, it can be a cost-effective way of accessing managed funds.
It’s usually not a good idea to put all your money into cash the minute you retire because you may still have roughly three decades of life left to fund – investing with some exposure to growth assets is a way to help make your money last and stay ahead of inflation.
This is something you could ask your KiwiSaver provider for help with.
We are looking to downsize and want to know if we could act quickly with a cash offer if the perfect property comes along. Husband and I are both retired. We own two properties mortgagefree, the family home worth around $1.6 million and an investment property around $800,000. We have cash of about $1.3m in investments and term deposits. While all that sounds very good, we feel we may have to spend more than the $1.3m we can liquidate quickly to get our dream retirement home. It would take a couple of months to get our family home sale-ready and I would like to know if we could, or should, take out a reverse mortgage for the shortfall should our savings not be enough, and then repay it as soon as our home sold, which could be two to three months. Apart from the government super and a small bit of rent, we have no other income so I can’t imagine we’d get bridging finance any otherway.
Without delving into the details, I can understand why this plan sounds like something that could work – but there are a few things I’d think about first.
David Cunningham, chief executive of Squirrel, said he would not recommend, in general, a reverse mortgage in this situation because it is usually for longer-term situations.
He said you might be able to get a bridging loan even if you don’t meet the normal serviceability tests, because banks and non-bank lenders are allowed to “look through” these sorts of problems if there is a clear exit strategy.
“The best option, if a loan is required, is likely to be putting the loan on the investment property and keeping the existing and new home debt-free. The loan can be repaid when the property is sold.”
He said short-term borrowing would normally have fees involved – if that was from a non-bank that might be about 2%, with an interest rate of around 10% that could be capitalised.