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I recently found out that it can cost $300 per person in lawyer fees to withdraw KiwiSaver funds for a deposit on a house. The funds we deposit are taxed before they go in the fund, we pay fees to the fund manager, and tax on the interest, then fees to withdraw. I guess you can say we get a government contribution and employer contribution but even so it is not as good a deal for worker as the original scheme was, and it is locked in.

First, I do have sympathy for the argument that we don’t have enough incentives to get people investing in KiwiSaver in New Zealand. Lots of other countries offer tax breaks that can make saving for the future a lot more appealing.

But that aside, on your point about first-home withdrawals from KiwiSaver, lawyers usually handle a lot of the process of the application, and receive the money in their trust account before it’s paid out to the vendor.

They charge for their time in doing this. Sometimes, they bundle the cost of this into the overall cost of conveyancing for the purchase. The first-home withdrawal bit is usually quite small in comparison to the rest of the bill. I asked my lawyers about this and was told that they charge $325 including GST for an application.

This is specific to a first-home withdrawal, you wouldn’t be paying fees for taking your money out when you are 65, for instance.

I am retired since 2024 and IRD has recalculated my PIR at 10.5 percent. I was on 28 percent prior to the update. My partner is still working and on a 28 percent PIR. All our investments are held jointly. What will happen at tax time with the two different PIR?

It seems that this will depend on the type of investment you have. For things like term deposits and direct shares, you’ll have an ownership split, usually 50/50, and you’ll be each taxed on your proportion of the income, interest, gains and so on, at your own PIR.

But if you have a jointly held portfolio investment entity (PIE) investment, you’ll be taxed on that one at the higher of your two PIR rates.

In 15 months’ time I would like to retire. I am presently with an active manager KiwiSaver provider, paying high fees. However, having looked into fees and availability I’m seriously considering transferring to a passive index provider. Is it advisable, given looming retirement, to change to passive investment with overall lower fees or stay with an active manager with higher fees and moderate funds? I have a substantial amount in my KiwiSaver account and presently not making substantial gains given past down turns.

I was at an event this week where someone asked me the same question – is it better to be in a cheaper KiwiSaver fund, when you’re retired and potentially not making contributions to KiwiSaver any more?

I can’t give personalised financial advice, but here are some general thoughts. I would tend to say that people should not move provider simply for the fees, although they are one of the few things that are actually in our control as investors.

I can understand why, if your balance, isn’t growing as much through contributions, you might be particularly keen to make sure that it’s not being eroded by higher fees.

If it were me, I would compare after-fee returns over a number of years from a range of providers to get a sense of whether there are better options elsewhere.

Simplicity chief economist Shamubeel Eaqub recently conducted some research that showed what made the difference to outcomes was really the type of fund people were in, not the provider they chose or, overall, the fees they were paying.

On that basis, I would suggest the most important thing to do is to make sure that you have a good understanding of your risk profile and time horizon, and that your invsetment fund choices align with that. A year or so before retirement is a good time to get some personalised advice, if possible, to come up with a strategy to make your money last through retirement.

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