Kiwis in retirement age continue to keep KiwiSaver funds

by Roxanne Libatique30 Jul 2020

More Kiwis still keep their KiwiSaver funds even after reaching the retirement age, according to specialist KiwiSaver provider AMP Wealth Management.

Blair Vernon, the chief executive of AMP Wealth Management, said fewer KiwiSaver clients withdraw their funds when they reach the retirement age.

Low-interest rates might have driven the recent statistics. However, KiwiSaver “offers more than just competitive returns to older Kiwis.”

“Nearly 7% less than this time last year, representing about $4 million in KiwiSaver investments,” Vernon said.

“Another compelling feature of KiwiSaver for members aged 65+ compared to some other savings products is the ability to withdraw partial amounts from your funds whenever you like, or need, without incurring any penalty. This can be especially important for this demographic as their needs change.”

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A recent survey by the AMP Wealth Management, which interviewed 1,000 KiwiSaver clients aged between 30 and 55, also revealed that more than 25% of the respondents said they would still work full-time when they reach the 65-year retirement age. Meanwhile, 40% said they might work part-time upon reaching the retirement age.

Michael Cave, a financial adviser and commentator at lifestyle website grownups.co.nz, commented that KiwiSaver members who have recently retired were most likely surprised at having an unexpected “nest egg.”

“We know that an increasing number of older Kiwis are struggling to save financially and many hadn't counted on getting to retirement having built up a good level of savings, but KiwiSaver is helping to change that,” he said.

“For those aged 65+, the fact that their KiwiSaver money is currently working harder for them compared to bank deposits for example, while also allowing greater flexibility, means it makes absolute sense for them to stay in KiwiSaver.”

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