Geekzone: technology news, blogs, forums
Guest
Welcome Guest.
You haven't logged in yet. If you don't have an account you can register now.




467 posts

Ultimate Geek


# 257359 28-Sep-2019 08:04
Send private message

My expectation is that when I retire I will be able to withdraw all the money and say put it in the bank, earning some interest.

 

Bank interest is always taxable.

 

My understanding is that I have been paying tax on my KiwiSaver over the life of my membership.

 

When I have to fill in an Income Tax Return, I assume I have to declare the proceeds from KiwiSaver as income.

 

What is the IRD going to tax me on. The Bank Interest or the KiwiSaver income (or both).





PC: HP ProBook 470G1 (Windows 10 Pro), Intel NUC7I5BNH (Windows 10 Home), Dell Inspiron 7591 2n1 (Windows 10 Pro)
Net: Ubiquiti Edgerouter Lite-3, 3 x Grandstream GWN7610
Storage: Synology DS216play NAS, 2 x 6TB
Media: HDHomeRun Connect, 5 x Amazon FireTV, Echo, Dot, Spot, Ambi Climate
TV: 2 x Samsung H6400 55" LED TV, Panasonic TH-P50G10Z 50" Plasma TV (Great picture, no smarts, just old), DMR-PWT530GZ Blu-ray Recorder
Mobile: Samsung Galaxy Note 5, Huawei P10 Lite
Wearable: Gear S3 Frontier


Filter this topic showing only the reply marked as answer Create new topic
4249 posts

Uber Geek


  # 2326256 28-Sep-2019 08:20
One person supports this post
Send private message

When I have to fill in an Income Tax Return, I assume I have to declare the proceeds from KiwiSaver as income.

 

What is the IRD going to tax me on. The Bank Interest or the KiwiSaver income (or both).

 

 

 

Your Kiwisaver provider and Bank both have your IRD number and should be deducting tax on your behalf, they then tell IRD how much tax you have paid.

 

All going well this should happen in the background and you will not have to account for it again.

 

 

 

 

 

 

 

 


514 posts

Ultimate Geek

Lifetime subscriber

  # 2326268 28-Sep-2019 09:20
4 people support this post
Send private message


My expectation is that when I retire I will be able to withdraw all the money and say put it in the bank, earning some interest.

 

Why would you do that?
Your KiwiSaver fund manager is almost certainly giving you a much better return than a bank deposit would, in fact if they aren't then it's time to change your KiwiSaver provider.

 

I would think that the better strategy would be to keep your money in your KiwiSaver account, drawing it down as needed for living expenses, trips & holidays etc

 

In the current interest rate environment, putting your money in a bank is pretty much a mug's game :(

 

 

 

BTW I am not a Registered Financial Adviser, this is not Financial Advice, etc., etc.


 
 
 
 


13767 posts

Uber Geek

Trusted
Lifetime subscriber

  # 2326274 28-Sep-2019 09:48
Send private message

PolicyGuy:

 


My expectation is that when I retire I will be able to withdraw all the money and say put it in the bank, earning some interest.

 

Why would you do that?
Your KiwiSaver fund manager is almost certainly giving you a much better return than a bank deposit would, in fact if they aren't then it's time to change your KiwiSaver provider.

 

I would think that the better strategy would be to keep your money in your KiwiSaver account, drawing it down as needed for living expenses, trips & holidays etc

 

In the current interest rate environment, putting your money in a bank is pretty much a mug's game :(

 

 

 

BTW I am not a Registered Financial Adviser, this is not Financial Advice, etc., etc.

 

 


Yes. For the record, it isn't compulsory to withdraw your money from KS at retirement or to withdraw any particular amount or, indeed, to stop paying into it as far as I am aware. I am not a financial advisor etc etc.






900 posts

Ultimate Geek


  # 2326279 28-Sep-2019 09:58
Send private message

Can I clarify, are you talking about returning the money you withdraw from KiwiSaver as income when you reach retirement age? If so this doesn’t need to be returned as income. If you take this out and put it in the bank, yes the interest will need to be returned.

Any income derived while the money is in your KiwiSaver will already be being taxed at your elected pir. It will not be taxed again when you withdraw it.

As others have said you do not need to withdraw the full KiwiSaver as soon as you turn 65.

28603 posts

Uber Geek

Moderator
Trusted
Biddle Corp
Lifetime subscriber

  # 2326282 28-Sep-2019 10:27
Send private message

Why would you want to withdraw the money and put it in a bank? With rare exceptions such as after a crash some sort of managed fund will typically always deliver a far better return than a bank.

 

 


919 posts

Ultimate Geek

Trusted

  # 2326291 28-Sep-2019 10:51
2 people support this post
Send private message

Upon retirement you will probably certainly decide you want a low-risk fund, which will be invested 100% in bank deposits (or close to it) anyway. Kiwisavers are PIE funds which mean lower tax than standard term deposits, but higher fees than doing it yourself.  You have to work out if those fees are worth it :-)





 



467 posts

Ultimate Geek


  # 2326529 29-Sep-2019 07:44
Send private message

JarrodM: Can I clarify, are you talking about returning the money you withdraw from KiwiSaver as income when you reach retirement age? If so this doesn’t need to be returned as income. If you take this out and put it in the bank, yes the interest will need to be returned.

Any income derived while the money is in your KiwiSaver will already be being taxed at your elected pir. It will not be taxed again when you withdraw it.

As others have said you do not need to withdraw the full KiwiSaver as soon as you turn 65.

 

 

 

My post was never about whether I should withdraw the money and put it in the bank.

 

It was about what would happen about the money and the IRD, if I put it in the bank.

 

I think this post answers my question.





PC: HP ProBook 470G1 (Windows 10 Pro), Intel NUC7I5BNH (Windows 10 Home), Dell Inspiron 7591 2n1 (Windows 10 Pro)
Net: Ubiquiti Edgerouter Lite-3, 3 x Grandstream GWN7610
Storage: Synology DS216play NAS, 2 x 6TB
Media: HDHomeRun Connect, 5 x Amazon FireTV, Echo, Dot, Spot, Ambi Climate
TV: 2 x Samsung H6400 55" LED TV, Panasonic TH-P50G10Z 50" Plasma TV (Great picture, no smarts, just old), DMR-PWT530GZ Blu-ray Recorder
Mobile: Samsung Galaxy Note 5, Huawei P10 Lite
Wearable: Gear S3 Frontier


 
 
 
 


1982 posts

Uber Geek

Trusted
Subscriber

  # 2326548 29-Sep-2019 09:03
4 people support this post
Send private message

alisam:

 

My post was never about whether I should withdraw the money and put it in the bank.

 

It was about what would happen about the money and the IRD, if I put it in the bank.

 

I think this post answers my question.

 

 

Yep - as others have said, you're taxed all along the way with Kiwisaver (in fact nearly everything), with the notion being once you need it, no more tax to pay.

 

So if you spent a lifetime saving into Kiwisaver, it's been from your after-tax income. Any gains it's made on the way to your retirement have been taxed as well.

 

When you come out the other end and drawdown those funds, there is no more tax to pay.

 

But if you took say $100k out, and then put it into a new investment that earns income, the new earned income is liable for tax. doesn't matter where the source came from.

 

 





________

 

Antonios K

 

Click to see full size


618 posts

Ultimate Geek


  # 2326675 29-Sep-2019 12:33
Send private message

Banks withhold tax from deposit income as well. I suggest the OP:

 

- check he/she is on the correct PIR

 

- not in one of the default KiwiSaver scheme, but in one that suits their investment goals

 

When filling out an income tax return, one only needs to declare untaxed income, or income taxed at the wrong taxation rate.





BlinkyBill


15350 posts

Uber Geek


  # 2326703 29-Sep-2019 13:35
Send private message

sbiddle:

 

Why would you want to withdraw the money and put it in a bank? With rare exceptions such as after a crash some sort of managed fund will typically always deliver a far better return than a bank.

 

 

 

 

 

 

Although crashes maybe rare, it all still comes down to timing, and the cycles. A lot of the experts say shares at the moment are way over valued, and a lot of people have taken their money out of the bank into shares, which appears to have pumped up the prices. The finance company sector crashing was also a rare event, but that didn't stop many losing a lot of their savings.


Filter this topic showing only the reply marked as answer Create new topic



Twitter and LinkedIn »



Follow us to receive Twitter updates when new discussions are posted in our forums:



Follow us to receive Twitter updates when news items and blogs are posted in our frontpage:



Follow us to receive Twitter updates when tech item prices are listed in our price comparison site:





News »

Vodafone New Zealand starts two year partnership with LetsPlay.Live
Posted 28-Jan-2020 11:24


Ring launches indoor-only security camera
Posted 23-Jan-2020 17:26


New report findings will help schools implement the digital technologies curriculum content
Posted 23-Jan-2020 17:25


N4L to upgrade & support wireless internet inside schools
Posted 23-Jan-2020 17:22


Netflix releases 21 Studio Ghibli works
Posted 22-Jan-2020 11:42


Vodafone integrates eSIM into device and wearable roadmap
Posted 17-Jan-2020 09:45


Do you need this camera app? Group investigates privacy implications
Posted 16-Jan-2020 03:30


JBL launches headphones range designed for gaming
Posted 13-Jan-2020 09:59


Withings introduces ScanWatch wearable combining ECG and sleep apnea detection
Posted 9-Jan-2020 18:34


NZ Police releases public app
Posted 8-Jan-2020 11:43


Suunto 7 combine sports and smart features on new smartwatch generation
Posted 7-Jan-2020 16:06


Intel brings innovation with technology spanning the cloud, network, edge and PC
Posted 7-Jan-2020 15:54


AMD announces high performance desktop and ultrathin laptop processors
Posted 7-Jan-2020 15:42


AMD unveils four new desktop and mobile GPUs including AMD Radeon RX 5600
Posted 7-Jan-2020 15:32


Consolidation in video streaming market with Spark selling Lightbox to Sky
Posted 19-Dec-2019 09:09



Geekzone Live »

Try automatic live updates from Geekzone directly in your browser, without refreshing the page, with Geekzone Live now.


Support Geekzone »

Our community of supporters help make Geekzone possible. Click the button below to join them.

Support Geezone on PressPatron



Are you subscribed to our RSS feed? You can download the latest headlines and summaries from our stories directly to your computer or smartphone by using a feed reader.

Alternatively, you can receive a daily email with Geekzone updates.