Can you withdraw all of your KiwiSaver when you retire?
Exploring KiwiSaver Flexibility at 65
When you turn 65, your KiwiSaver fund becomes incredibly flexible. You can withdraw as much or as little as you want, stop or start contributing whenever it suits you, or even join for the first time. This flexibility means you can really tailor your KiwiSaver strategy to fit your unique needs as you move into retirement.
What Happens with Contributions?
One important thing to note is that once you reach 65, you no longer receive government contributions. Also, your employer isn’t required to keep contributing either. However, some employers might still choose to add their 3%. If that’s your situation, it’s worth thinking twice before opting out or stopping your own contributions. After all, those employer contributions are like getting an extra 3% in pay, which you can access whenever you need it.
Managing Your KiwiSaver Withdrawals
When it comes to accessing your KiwiSaver savings, you have plenty of choices. Whether you prefer to set up regular withdrawals (starting from $100 a month) or take out lump sums (with a minimum of $500), it’s up to you. Just remember, there are some forms to fill out, but there are no penalties for making withdrawals.
If you’re considering withdrawing a significant portion—or even all—of your KiwiSaver savings, you might think about where to put that money next. Savings accounts and term deposits could be good options, especially if you’re looking for a safe place to keep your funds. However, in a low-interest environment, you might miss out on potential growth opportunities that KiwiSaver can still offer.
Balancing Risk and Returns
For those who rely on KiwiSaver to cover daily expenses, you might want to prioritize stability in your returns. On the flip side, if you’re using KiwiSaver as a longer-term investment—thinking five years or more—a balanced or growth fund could be more suitable. Comparing different funds can help you decide which one fits your needs best. We are KiwiSaver specialist’s so please chat to us if you’re unsure.
Planning for a Long Retirement
With life expectancy in New Zealand on the rise, there’s a good chance you could spend a third of your life in retirement. Many people choose to work for some of that time, but typically, your spending is highest right after you stop working and decreases as you age. Travel and other activities can become more challenging in your later years, so you’re likely to spend less as time goes on.
That’s why it’s crucial to have a plan for managing your income sources in retirement. This includes KiwiSaver, other investments or savings, and potentially your home. To ensure your money lasts throughout your retirement, consider developing a solid strategy such as the bucket approach.
Whether you consult a financial adviser or work on a plan yourself, having a clear roadmap for spending and investing can help you enjoy your retirement with confidence.
If you want to know if your retirement strategy is suitable for your personal situation, please follow the link below to complete our Retirement Quiz or book a time to chat to us about your situation.
Compound Wealth are based in Mount Maunganui, Tauranga and offer KiwiSaver, Investment & Retirement Financial Advice to clients all over New Zealand.