Unlocking the power of KiwiSaver when you’re past 65
Tuesday, 24 March 2026
Martin Hawes is a financial writer and presenter, and has written 25 personal finance books. He writes a weekly column.
OPINION: We think of KiwiSaver as a work-place based scheme, mostly for those who are saving for a future retirement. That is right, of course, but it does not mean that older people who are no longer working are precluded from joining KiwiSaver. In fact, many retired people now use KiwiSaver as their drawdown fund after they have reached 65.
KiwiSaver is often a very good solution for those in retirement who need their investments managed. People in retirement need a drawdown fund - a fund or a set of investments into which they put their savings, and from which they can then draw down a regular amount to fund their living costs.
Those with a lot of money in retirement can consult a financial adviser and will probably end up with a discretionary investment management service (Dims). That is a good solution– they will have a bespoke portfolio, tailored to their needs and may get some guidance regarding the amount that they can safely withdraw each fortnight.
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However, most Dims require a minimum amount to be invested – often about $250,000 (the average amount in Dims is $1 million). Dims are services mostly provided to the well off.
Those who do not have $250,000 for their retirement need to find other solutions: they could, for example, decide to manage their own investments. However, in the last 20 years or so DIY has become much less common as investment has become increasingly complex. In any event, managing investments is committing, and close to a real job if it is to be done well.
Alternatively, they might put all their money in a series of term deposits. This is easy and quite safe, but term deposits give poor returns and either the drawdown will need to be lower (with a poorer lifestyle) or the money may run out before they do.
KiwiSaver is often the solution. Although KiwiSaver is a work-place scheme and by definition the retired are no longer working, virtually anyone can join KiwiSaver.
When you hit age 65, working or not, KiwiSaver becomes a different beast: at age 65 you can draw as much or as little as you want. Unlike younger people whose money is locked in, over 65s have a fund that is liquid and available for withdrawal in whole or part. Most (if not all) KiwiSaver funds will allow over 65s to deposit money and take it out whenever they want.
At age 65, KiwiSaver can be treated almost like a bank account. Of course, it is not really - your KiwiSaver fund is likely to be fully diversified and give exposure to all of the major asset classes: shares (international and Australasian), commercial property, fixed interest and cash. As such, it should give better returns although with some volatility.
Most KiwiSaver providers are now awake to retired people using their KiwiSaver funds as drawdown funds and allow withdrawals of any size. Most allow regular withdrawals so that an amount can come into your account on the same day as your NZ Super to help meet living costs.
Of course, you could hunt around for another fund that is not KiwiSaver, but KiwiSaver funds do have some advantages:
You are likely to be familiar with your KiwiSaver and, assuming it gives good performance and good service it could be convenient to stay with it.
KiwiSaver funds are portfolio investment entities (Pies) and these are tax efficient.
Generally, the fees on a KiwiSaver fund will be lower than other comparable funds – it is written into the Kiwisaver legislation that fund fees must be “reasonable”.
There is plenty of information which compares KiwiSaver fund performance – for example, Morningstar does a quarterly survey of most KiwiSaver funds and gives readers performance going back 10 years.
KiwiSaver is well regulated and highly competitive.
Even those who have enough money to consider a Dims may use their KiwiSaver, given that tax efficiency (Dims are not Pie funds). Although I personally have a Dims, I also have a KiwiSaver which is my dedicated fund for healthcare.
With plenty of KiwiSaver funds available, you have a wide range of choices. Although you may not necessarily have to change providers, you could want to lower risk a bit (if you are in a growth fund you may want to move to balanced when you start to draw down).
With lots of options, KiwiSaver can be a very neat solution for retirees looking for a drawdown fund.
Martin Hawes is not a financial adviser and the information and opinions here should not be a substitute for financial advice.