What happens to your KiwiSaver savings after 65?
For many KiwiSaver members, turning 65 can be a milestone that triggers a move into a more conservative fund and mindset to protect what you’ve built. But as our recent webinar explored, that idea might not be the best thing to do.
Hosted by Sarah Whitelock, the webinar featured financial advisers Nigel Ingham and Neil Johns, who brought a practical perspective to one of the biggest questions around retirement: what happens to KiwiSaver once saving turns into spending?
The discussion focused on three important ideas.
First, it challenged the assumption that “de-risking” at 65 is always the right move. While a more conservative approach can make sense for many people, KiwiSaver needs to support them for 20 or 30 years + after they stop working. That means the real question is not simply how to protect savings in the short term, but how to make sure they continue working over the long term.
Nigel Ingham, Head of Financial Advice and Education, said that becoming too conservative too early can create a different risk: not having enough growth to sustain income later in retirement. He added that, rather than relying on age alone, members should consider their own time horizon, spending needs, and how long their money may need to last.
The webinar also unpacked sequencing risk — the idea that the order of good and bad market years matters, especially when members are withdrawing money. Financial adviser Neil Johns explained that two people can have the same average return over time, but if one experiences market downturns early in retirement, their money may run out sooner because they may be forced to sell assets at lower prices. That makes planning especially important once withdrawals begin.
Practical strategies were also discussed, including keeping a cash buffer, using a bucket approach to separate short, medium and long-term money, and being flexible about withdrawals where possible.
Beyond the technical side, the webinar also addressed something many retirees struggle with: giving themselves permission to spend. After years of saving, it can feel uncomfortable to start drawing down KiwiSaver. But as Nigel and Neil both noted, retirement savings are there to support life in retirement — not just to be preserved indefinitely.
Retirement is not a one-size-fits-all stage. It requires a balance of strategy, flexibility and mindset. Members who understand their options, plan for withdrawals, and think carefully about how their savings will support their lifestyle are better placed to make confident decisions.
KiwiSaver after 65 is not simply about de-risking. It is about making sure your money continues to support you, in the way that best fits your retirement goals.
Key takeaways
- De-risking at 65 is not automatically the right answer for everyone
- Sequencing risk becomes more important once withdrawals begin
- A cash buffer or bucket strategy can help reduce the need to sell in a downturn
- Retirement savings are meant to be used, not just preserved
- Thinking about time horizon and spending needs matters more than age alone
Issued by Mercer (N.Z.) Limited. The information contained in this article is of a general nature only and does not take into account the personal objectives, financial situation or needs of individual investors. It is important that you consider these matters, read the relevant Product Disclosure Statement and obtain advice from an appropriately qualified financial adviser before making any investment decision.
