You Don't Need to Withdraw Your KiwiSaver at 65
If you're nearing 65, you’re probably starting to think about what to do with your KiwiSaver savings. While it’s exciting to know that you can access your funds once you hit 65, there’s a common misconception that you need to withdraw everything all at once. Before you rush into any decisions, it’s worth understanding the flexibility that comes with managing your KiwiSaver balance — there’s a lot more to it than just cashing out.
The Common Misconception: You Have to Withdraw It All
A lot of KiwiSaver members believe that once they’re 65, they have to take out the full amount — but that’s simply not the case. Sure, you can withdraw your money in a lump sum if that suits you, but that might not always be the best move for your financial future.
Your KiwiSaver isn’t just for your retirement right away; it can continue to grow if you don’t need the full amount immediately. Many people could benefit from leaving part of their KiwiSaver invested for longer, especially if you’re going to slowly need the funds overtime.
The Power of Splitting Your KiwiSaver Funds
Here’s where things get interesting: you can split your KiwiSaver savings between different types of funds to suit your needs. This means you can take a portion for immediate use (perhaps to cover your lifestyle or healthcare costs in the short term), and leave the rest to keep working for you in a growth fund or balanced fund.
For example, let’s say you’ve got $500,000 in your KiwiSaver. If you need $100,000 for immediate expenses, you could withdraw that and leave the remaining $400,000 invested.
You might put $250,000 in a growth fund, allowing it to grow over the next 10-15 years.
You could allocate $150,000 to a balanced fund, which offers a bit more stability over the medium term (4 - 7 years)
The $100,000 could then be invested in a Cash or Convective fund to protect it while you need it, while still recieving some return.
This strategy ensures that your money is tailored to suit your short, medium and longterm retirement goals, enabling your funds to works harder for you, even in your later years.
Why This Strategy Works
Here’s the thing: KiwiSaver is designed for long-term investing, and you can still benefit from its growth past 65. If you plan on having a comfortable retirement, that extra growth could make a big difference, especially in the face of inflation and the rising cost of living.
By splitting your savings across different funds, you can balance both immediate financial needs with long-term wealth-building. The best part is, you’re in control — you get to decide how much of your KiwiSaver to withdraw and how much to leave invested.
Ideally you will only withdrawal from your need KiwiSaver fund what you need to top up your pension. For some this may be $200 per week, others might be $1,000. It all depends on your lifestyle.
How to Figure Out What’s Right for You
Figuring out the right balance between withdrawing funds and leaving them invested can be tricky, especially as your needs evolve over time. That’s where a financial adviser who specialises in KiwiSaver can really make a difference. They’ll help you assess your goals and choose the best fund options tailored to your unique circumstances.
If you’re unsure about how to split your KiwiSaver funds, or need guidance on the best provider and fund for your situation after 65, don’t hesitate to get in touch with a trusted KiwiSaver adviser. The right advice could have a huge impact on your financial future.
At MoneyGuide, we help Kiwis just like you navigate KiwiSaver with clear, straightforward advice that’s personalised to your goals and priorities. Let us take the guesswork out of your retirement planning.
