How to make the most out of KiwiSaver when you turn 65

KiwiSaver offers great flexibility for over 65s, with generally lower fees and access to your savings whenever you need it.

4 minute read

Everyone's situation is different; there's no one-size-fits-all solution to managing your money during retirement. Turning 65 opens up new options for your KiwiSaver account, so it’s a good idea to consider what’s best for you as you approach this milestone and make a plan for your retirement journey. And while you become eligible to make withdrawals from your KiwiSaver account when you turn 65, it doesn't mean you have to.

You have choices

For over 65s, KiwiSaver provides a great way to keep saving with lots of flexibility around contributions and access.

Depending on your situation, you could continue your regular contributions, stop your contributions, or even make occasional lump-sum contributions. For example, if you have other investments maturing, you could consider adding these to your KiwiSaver account. This could simplify your investments by having them all in one place, with access when you need it.

Which withdrawal option is best for me?

There’s a misconception that you need to withdraw all of your savings when you turn 65, but that’s not the case. You can withdraw a lump sum or a regular amount, or leave your money fully invested and save it for a rainy day – the choice is yours.

When the time comes to start drawing down from your KiwiSaver account, you may like to consider setting up a regular withdrawal, if that works for your needs. When you’re making your plan, a key risk to be aware of is ‘sequencing risk’. You can find out more about sequencing risk here.

Sequencing risk exists because of market volatility - the natural ups and downs of financial markets. One thing that can help you to manage sequencing risk is to spread out your withdrawals, for example, by setting up a regular monthly withdrawal rather than making a withdrawal once a year. This is a way to reduce the timing risk of your withdrawals, because you aren’t at the mercy of the market at a single point in time.

What happens if I leave money in my KiwiSaver account?

Leaving some or all your savings invested in your KiwiSaver account after you turn 65 could mean that your money keeps working for you for longer. Consider that retirement is a journey, not a destination, and with average life expectancy around age 82 in New Zealand, many people have 15-20 years (or more!) of retirement to enjoy. Staying invested could help you keep growing your savings for the years ahead.

If you do decide to stay invested, it’s important to consider your time horizon, and make sure you’re in the right fund for your circumstances. After all, you don't need to invest all of your savings conservatively just because you’ve reached retirement age. You can learn more about choosing the right fund at retirement here.

What if I'm still working?

There are many reasons why you might stay in work after you reach 65. As well as keeping the cash coming in, there are also social benefits, and the value and satisfaction you gain from participating in meaningful work.

And you’re not alone. Almost one in four New Zealanders aged 65 and above are still working, as we progressively live longer and healthier lives. In the future, the over 65s age group is expected to make up an increasing share of the labour force in New Zealand.

Once you reach 65 you will no longer be eligible for Government contributions, but you may be eligible for NZ Super, which you can apply for up to 12 weeks before this milestone.

Many employers continue to make contributions for over 65s, although they aren’t required to, so it’s worth having a chat with your employer about this. If you’re eligible to access your KiwiSaver account for retirement and you’d like to stop making employee contributions, you can do this by completing a non-deduction notice and handing it to your employer. You can restart these later if you’d like to.

How can I safeguard my savings from inflation?

Inflation refers to the general increase in prices over time. This matters for KiwiSaver members because as living costs rise, the relative value of your savings can erode. Leaving your savings in a bank account – although considered a safer option – may mean you’re losing money in ‘real’ terms. Inflation has the potential to cut into your purchasing power unless your savings are growing faster than inflation rates.

This is one reason why you may like to consider leaving some of your KiwiSaver savings invested when you turn 65. You’re likely to have a long retirement ahead of you, and it’s important that your savings work just as hard for you in retirement as you worked to grow them. Staying invested in your KiwiSaver account may also provide you with diversified market exposure which could help to safeguard you from inflation over the long term.

Key takeaways

You have lots of choices and flexibility with your KiwiSaver account when you turn 65. It’s a good idea to make a plan that works with your situation, as you can keep building your nest egg and make withdrawals at any time. And there are many reasons why you may choose to stay invested in your KiwiSaver account after turning 65. Whether you’re still working, wanting to invest responsibly, or just looking for flexibility for the years ahead, the BNZ KiwiSaver Scheme has a range of options to suit your needs.

Choosing the right fund for your retirement timeframe

Being in the right fund is important for all KiwiSaver members – and it’s especially important when you’re close to retirement or already retired.

Managing your money when you retire

If you’re close to retiring or have already retired, then make sure you have a plan in place to stay on top of your finances.

When it’s time to start spending your retirement savings

There are no set rules on how you use your KiwiSaver money when you retire. However, there are a few important things to consider.

Related tools

KiwiSaver retirement calculator

Guide to YouWealth managed funds

BNZ KiwiSaver Scheme

Find out more

This article is solely for information purposes and is not intended to be financial advice. If you need help, please contact BNZ or your financial adviser. Neither BNZ nor any person involved in this article accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any information, representation, or omission, whether negligent or otherwise, contained in this publication.

BNZ Investment Services Limited, a wholly owned subsidiary of Harbour Asset Management Limited, is the Issuer and Manager of the BNZ KiwiSaver Scheme. Download a copy of the BNZ KiwiSaver Scheme Product Disclosure Statement PDF 1.1MB, or pick up a copy from a BNZ branch.

Investments in the BNZ KiwiSaver Scheme are not bank deposits or other liabilities of Bank of New Zealand (BNZ) or any other member of the National Australia Bank Limited group. They are subject to investment risk, including possible delays in repayment. You could get back less than the total contributed. No person (including the New Zealand Government) guarantees (either fully or in part) the performance or returns of the BNZ KiwiSaver Scheme or the repayment of amounts contributed. National Australia Bank Limited, the ultimate owner of BNZ, is not a registered bank in New Zealand but a licensed bank in Australia and is not authorised to offer the products and services mentioned on this webpage to customers in New Zealand.

BNZ Investment Services Limited (BNZISL) uses the BNZ brand under licence from Bank of New Zealand, whose ultimate parent company is National Australia Bank Limited. No member of the FirstCape group (including BNZISL) is a member of the NAB group of companies (NAB Group). No member of the NAB Group (including Bank of New Zealand) guarantees, or supports, the performance of any member of FirstCape group’s obligations to any party.