What’s your post-65 KiwiSaver plan?

December 22, 2021

Looking forward to the day when you can finally tap into your KiwiSaver? Whether you’re nearing retirement or simply thinking about the long term, it’s good to have a plan in place to make your retirement nest egg last for as long as you need it to.

So, here are some key things to keep in mind.

To withdraw, or not to withdraw?

If that’s the question, it helps to consider all options here. Firstly, it’s important to note that you can usually start withdrawing from your KiwiSaver once you turn 65 – but you don’t have to.

Some people over 65 opt to stay in KiwiSaver, using it as a tool to manage their wealth. Although you won’t receive any annual government contributions, you can continue to save by making voluntary contributions. And being invested, your money is likely to keep growing over time. Also, you can stop making contributions anytime after you turn 65.

If you choose to remain invested in the scheme, depending on your needs and goals, you could:

  • Withdraw large lump-sum amounts every now and then. For example, you might want to use your KiwiSaver money to pursue some long-held goals or hobbies. The potential downside of this option is that you need to be careful not to spend too much, too soon. The end goal is to ensure you can enjoy the lifestyle you have worked so hard for – for as long as possible.
  • Trickle out your KiwiSaver funds to make them last a while. There are multiple key benefits to doing this: if you withdraw piece by piece, you can use your KiwiSaver as retirement income to supplement your NZ Super payments (which is likely not enough for a comfortable retirement lifestyle). Some people find it easier to manage their retirement funds this way. Plus, you can make your money continue to work for you, earning interest and returns to grow your funds even further.

However you choose to use your KiwiSaver money in retirement, remember: it’s never too early (or too late) to maximise your nest egg. Which brings us to the next point on our list.

Other ways to maximise your nest-egg

As we said, making your funds last is crucial, and it’s not just about spending mindfully during your retirement years. Planning ahead for a long life is also crucial, especially considering that the average life expectancy is getting longer.

If you’re still working towards your retirement, your money habits now can go a long way to shape your future (and they’re worth keeping for the long haul). So here’s a quick summary of some steps you can take before and during your golden years, to maximise your savings:

  • Aim for debt-free retirement: By paying off all your debts (consumer, mortgage or otherwise) before you leave paid employment, you’ll have more disposable income to enjoy in retirement.
  • Have a budget: Having a clear idea of what your spending looks like now, and may look like in the future, is key.
  • Check that you’re invested in a KiwiSaver fund that’s appropriate for your risk tolerance and time horizon. If you’d like to ‘protect’ your savings, you may want to invest in a lower-risk, less volatile fund. But again, it depends on how far off retirement is for you, and your attitude to risk. Get in touch to learn more.
  • Consider diversification: Investing in a mix of investment vehicles lets you spread the risk more widely than if you just keep ‘all your eggs in one basket’. Not sure where to start? Once again, we’re here to help you make an informed decision.

Like to know more?

Please don’t hesitate to contact us. As financial advisers, we can guide you on the road to a financially comfortable future.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.