When thinking about fund selection, the timeframe you’re investing for is an important consideration. If you’re closer to retirement, it might be a good idea to have a more conservative approach to your fund choice as you need to start protecting the value of your investment against potentially bigger ups and downs that a higher risk fund produces.
You can use our online KiwiSaver Calculator to see how much you might have when you reach 65, and how your choice in fund or contribution rate might affect this.
You can also make voluntary contributions which can really add up in the long term.
What happens when you reach retirement age?
While you can access your funds when you reach retirement age, it doesn’t mean you have to! If you continue working, you can still contribute and continue to potentially grow your balance until you’re ready to start withdrawing. If you do retire, there may be no need to withdraw everything – so you can keep your money away from temptation until you do need it.
If you’re reaching retirement age and would like to make a withdrawal, you’ll need to contact your provider.
How is KiwiSaver different to some previous superannuation funds?
ASB Executive Wealth Manager, Rebecca Drummond explains:
“The difference with KiwiSaver to some historical superannuation funds is that it’s your money, and it’s held in a trust account in your name with the provider’s supervisor. This means if a KiwiSaver provider’s business were to fall over, your investments wouldn’t be affected. You contribute, as well as your employer and the Government and it’s your savings, to help you into a first home or to assist you with a better quality of life in retirement.”
While the Government may make small changes along the way, as it has in the past by removing the $1,000 kick-start, and raising the minimum contribution level, it’s in the country’s best interests for everyone to be saving more for their own retirement.
Look out for more in our 10 Years of KiwiSaver blog series.