How the 2026 KiwiSaver Changes Affect Over-65s Still Working

More New Zealanders than ever are working past 65. Whether it's because you love your job, need the income, or simply aren't ready to stop, you're part of a growing trend. According to Stats NZ, the proportion of people aged 65 and over in the workforce has steadily increased over the past two decades.

But here's where it gets complicated: you're eligible to withdraw your KiwiSaver balance at 65, yet you might still be earning a salary and contributing to the scheme. The April 2026 changes to KiwiSaver contribution rates have raised important questions for people in exactly your position. Do the new employer contribution rules apply to you? Can you keep contributing? What happens to the government contribution you used to receive?

Let's clear up the confusion.

The 2026 KiwiSaver changes increased both employee and employer minimum contribution rates from 3% to 3.5% of gross salary. For most working New Zealanders, this was straightforward: more goes in, more gets matched.

But the legislation around KiwiSaver and age 65 didn't change. Here's what still applies:

• You can withdraw your KiwiSaver from age 65 onwards, regardless of whether you're still working. This is called your KiwiSaver retirement withdrawal, and it's available once you've been a member for at least five years.
• You're not required to stop contributing just because you turn 65 or access your funds. Many people assume withdrawal means exit, but that's not the case.
• If you stay enrolled and keep working, your employer must still match your contributions at the current minimum rate (now 3.5% as of 2026).
• The government contribution (member tax credit) stops at age 65. Previously, you could receive up to $521.43 per year if you contributed at least $1,042.86. Once you turn 65, this benefit ends, even if you keep contributing.

The Inland Revenue guidance on KiwiSaver confirms these settings remain in place under the 2026 updates.

This is the most common misconception. Many over-65s believe that because they can access their KiwiSaver, employer contributions stop. They don't, as long as you remain a KiwiSaver member.

Under the KiwiSaver Act, if you're employed and enrolled in KiwiSaver, your employer is legally required to contribute. Age doesn't exempt them from this obligation. So if you're earning $60,000 a year and contributing 3.5%, your employer must also put in 3.5%, which works out to $2,100 annually (before tax).

However, there are two important nuances:

1. Employer contributions are subject to Employer Superannuation Contribution Tax (ESCT)

Your employer's contribution isn't free money, it's taxable. The ESCT rate depends on your income and can range from 10.5% to 39%. For someone earning over $180,000, that top rate applies, meaning a significant portion of the employer contribution goes to tax before it even hits your KiwiSaver account. This doesn't change at 65, it's been the case all along, but it's worth understanding when weighing whether to keep contributing.

2. You can opt out if you want

Once you turn 65, you're no longer locked into KiwiSaver contributions. You can take a contributions holiday (now called a savings suspension) indefinitely, or you can formally opt out. If you do either, your employer contributions stop as well. Some people choose this route, especially if they've already withdrawn their balance and don't see the benefit of continuing.

But if you remain enrolled and earning, those employer contributions keep flowing, and with the 2026 increase, that's now 3.5% instead of 3%. Over a year or two of continued work, that adds up.

There's no one-size-fits-all answer here. Your decision depends on your income needs, tax position, and how long you plan to keep working. Here are three common scenarios:

Scenario 1: You're working full-time and don't need your KiwiSaver yet

Perhaps you're 66, earning well, and enjoying your career. You've got other savings or investments, and you're planning to work until 68 or 70. In this case, leaving your KiwiSaver untouched and continuing to contribute might make sense. You'll keep receiving employer matching (now 3.5%), and your balance continues to grow and compound. When you do eventually retire, you'll have a larger pot to draw from. You've lost the government contribution, but the employer match still provides a solid return on your own contributions.

Scenario 2: You're working part-time and need income now

Maybe you've scaled back to 20 hours a week, and you're supplementing your income with NZ Super. You might choose to withdraw your KiwiSaver balance and either spend it gradually or park it in a term deposit or managed fund outside KiwiSaver. You could then pause your KiwiSaver contributions to maximize your take-home pay. Without the government contribution, the main incentive to keep contributing is the employer match, and if you're only earning $20,000 a year part-time, that's $700 a year (before ESCT). For some, that's worth it. For others, the cash flow today matters more.

Scenario 3: You're self-employed or a contractor

If you're running your own business or working as a contractor, there's no employer to match your contributions. The 2026 changes don't really affect you, because you never had compulsory contributions in the first place. Once you hit 65 and lose the government contribution, the main reason to keep contributing to KiwiSaver is convenience and tax treatment (KiwiSaver funds are PIEs, which can offer tax advantages). But there's no legislative requirement, and no matching incentive. You might consider whether continuing voluntary contributions to KiwiSaver makes more sense than investing elsewhere. For more on this, see our article on self-employed KiwiSaver in 2026.

This trips people up constantly: you can withdraw your KiwiSaver at 65 and keep contributing. They're not mutually exclusive.

When you turn 65 (and have been a KiwiSaver member for at least five years), you can apply to withdraw some or all of your balance. You can do this as a lump sum or in stages. Many providers now offer regular withdrawal options, essentially turning your KiwiSaver into a retirement income stream.

But let's say you withdraw $80,000 at age 65, and then keep working for another three years. If you remain enrolled in KiwiSaver, your contributions (and your employer's) continue to flow into your account. You're essentially rebuilding a balance from scratch, and when you finally finish work at 68, you might have another $15,000 or $20,000 in there, which you can withdraw again.

There's no restriction on how many times you can withdraw after 65. Once you're eligible, your KiwiSaver functions more like a flexible retirement account than a locked box. Some people use this strategically: withdraw a portion at 65 to clear a mortgage or fund a specific goal, then let new contributions accumulate for a few more years before taking another withdrawal.

The key point: turning 65 gives you access, but it doesn't stop the account from functioning if you choose to keep it active.

Even after 65, the tax treatment of KiwiSaver doesn't change. Two tax elements still apply:

ESCT on employer contributions

As mentioned earlier, your employer's contribution is taxed at your ESCT rate before it enters your KiwiSaver account. If you're earning $70,000 a year, your ESCT rate might be 17.5%. On a $2,450 employer contribution (3.5% of $70,000), you'd pay about $429 in ESCT, leaving $2,021 actually credited to your account. This is withheld by your employer and paid to Inland Revenue, you don't see it on your payslip as a deduction, but it does reduce the net benefit.

PIE tax on investment earnings

Your KiwiSaver fund is a Portfolio Investment Entity (PIE), which means earnings (interest, dividends, gains) are taxed within the fund at your Prescribed Investor Rate (PIR). Your PIR is based on your taxable income over the previous two years, and it caps at 28%, even if your marginal tax rate is higher. If you're still working and earning good income, your PIR is likely 28%. If you've retired and your income has dropped, your PIR might fall to 17.5% or even 10.5%, which means your KiwiSaver earnings are taxed more lightly. This is one advantage of keeping money in KiwiSaver even after you've withdrawn your balance and stopped contributing, the PIE tax treatment can be favorable compared to holding investments in your own name.

For a deeper look at how to think about different investment structures in retirement, our guide on structuring retirement savings across KiwiSaver, shares and cash covers the key trade-offs.

Let's address a few persistent myths:

Myth 1: You have to withdraw your KiwiSaver at 65

No. Withdrawal is optional. You can leave your balance invested indefinitely. Some people never withdraw, they just let it grow and eventually it becomes part of their estate.

Myth 2: If you withdraw, you can't contribute anymore

Wrong. You can withdraw and keep contributing simultaneously. Your account stays open.

Myth 3: Employer contributions stop at 65

Only if you opt out or take a savings suspension. If you stay enrolled and employed, they continue.

Myth 4: The 2026 changes don't apply to over-65s

The 3.5% rate applies to everyone who's contributing, regardless of age. If you're 67 and still working, both you and your employer contribute at the new 3.5% minimum (or higher, if you've chosen a higher rate).

Myth 5: You lose money by staying in KiwiSaver after 65

Not necessarily. You lose the government contribution, yes. But you still get employer matching, and your funds still grow tax-efficiently as a PIE. Whether that's better than investing outside KiwiSaver depends on your situation and goals, topics worth discussing with a licensed adviser.

If you're over 65 and still working, here are some questions worth considering:

• Do you need your KiwiSaver balance now, or can you leave it invested? If you don't need the cash, leaving it in KiwiSaver keeps it growing in a tax-effective structure. If you do need it, you can withdraw as much or as little as you want.
• Are you still getting value from contributing? Without the government contribution, your main benefit is the employer match. If you're employed, that's still a 100% return on your contribution (before tax). If you're self-employed, you might weigh KiwiSaver against other investment options.
• How long do you plan to keep working? If it's just another year, it might not matter much either way. If it's five more years, continuing to contribute could add meaningfully to your retirement savings, especially with the 3.5% employer match.
• What's your tax position? If you're earning high income, ESCT eats into your employer contribution. If your income is moderate, the after-tax benefit is better. Understanding your effective rate helps you model the real value.
• Have you reviewed your KiwiSaver fund type? If you're planning to withdraw soon, you might want to shift to a more conservative fund to protect against market volatility. If you're leaving it invested for several more years, your current fund choice might still be appropriate. Our article on reviewing your KiwiSaver fund after the 2026 changes walks through the factors to consider.

These aren't decisions to rush. The beauty of the post-65 KiwiSaver rules is that they're flexible. You can withdraw today and change your mind tomorrow (in terms of future contributions). You're in control.

The question of KiwiSaver contributions over 65 sits within a broader context: what does retirement actually look like for you?

For some, 65 is just a number. You're healthy, engaged, and earning. Retirement might be 70, or 75, or never in the traditional sense. For others, you're working because you have to, not because you want to, and every dollar of take-home pay matters.

KiwiSaver is just one piece. You've also got NZ Super (which you're likely receiving), any other savings or investments, your home equity, and your income from work. The 2026 changes to contribution rates are a detail, not a determining factor. What matters more is how all these pieces fit together.

If you're still working and drawing NZ Super, you're in a relatively strong position financially, at least compared to someone living on NZ Super alone. That might give you the flexibility to keep contributing to KiwiSaver and let that balance grow for later. Or it might mean you can afford to pause contributions and maximize your current lifestyle.

There's no right answer, only the answer that fits your circumstances and priorities. And those might change year to year. That's fine. The system allows for it.

For a broader perspective on the transition into and through retirement, including how to think about phased work arrangements, see our guide on phased retirement in New Zealand.

This article is general information only and does not constitute personalised financial advice. For advice tailored to your situation, speak with a licensed Financial Advice Provider. You can find a registered adviser at fma.govt.nz.