Earlier in the year I wrote about goal setting and in particular, its importance to KiwiSaver. Specifically, I discussed the role that KiwiSaver can play in either purchasing your first home or setting yourself up for a comfortable retirement – for many, it will play a part in both. But how many of us know exactly what happens to our KiwiSaver when we retire?
Age 65 is widely regarded as the age of retirement in New Zealand and is considered an ideal time to “down tools”. This is the age that New Zealand Superannuation will start to be paid (if eligible) and you can begin to access your KiwiSaver – so how does the withdrawal process work?
Withdrawals, although not mandatory, can be set up to suit your individual needs. Many of our clients opt to withdraw a regular income to supplement their lifestyle whilst others prefer to withdraw lump sums as and when needed for things like a new car, holiday, renovations etc.
To make your first retirement withdrawal, simply contact Milford and we’ll provide you with a retirement withdrawal form. Once completed, return to us with certified identification and proof of residential address and we’ll have this processed for you. We recommend getting this done shortly after turning 65 so that it’s out of the way. Subsequent retirement withdrawals can be completed without the need for certified documents and in most cases, can be actioned via your client portal.
Many Kiwis are not slowing down and continue to work beyond age 65. In fact, a recent government study shows that one third of our workforce are aged 50 or older and half of this group remain employed into at least their late 60’s.
Whilst continuing to work beyond 65 may not be ideal for all, it does present a great opportunity to further add to your retirement nest egg via employee KiwiSaver contributions. Furthermore, whilst employers are not obligated to continue with their contributions, some do.
How much will I need?
Retirement is a great milestone and should be something that we look forward to! However, it can be difficult to plan for and each of us will have different requirements in our golden years. If you’re looking for help, the recent ‘New Zealand Retirement Expenditure Guidelines’ produced by Massey University could be a good place to start.
If you’re wondering whether you’re in the correct fund, whichever stage in the retirement planning cycle you may be in, help is also available at Milford. Digital advice can be accessed easily via our website, if you aren’t already a Milford KiwiSaver Plan member, or your Client Portal or Mobile App if you are. For those members aged 65 or older, we also have a Spend my KiwiSaver tool available which will give an indication of how much you could spend in each year of your retirement.