You can’t access your KiwiSaver investment till 65 – but here’s how you can retire before then.
Do you wish you could retire right now? Quit your job, bin your alarm clock and spend your time doing the things you REALLY care about?
It might seem like a dream, but early retirement could be within your reach if you take the right steps to make it happen.
Start planning NOW
“Want to retire early? Then you’ll need a plan,” says Glen Macann, Kiwi Wealth’s Head of Advice.
“You won’t be able to access your KiwiSaver investment until you turn 65, which is when you’ll also be eligible for NZ Super.”
“If you want to knock off work earlier than 65, you’ll need to find another way to do it.”
How to retire faster
Having the freedom to retire early involves earning, saving and investing as much as you can.
You’ll need to identify how much money you’ll need in retirement, and then make smart investments to help you achieve your goal.
So what are your options?
You could choose term deposits, which have traditionally been seen as ‘safe’ places to grow wealth.
Term deposits are popular with savers who want to lock away their money and earn fixed returns.
But term deposits can earn relatively low interest rates. You might be prepared to take more risk in the hope of higher returns.
You might also want more choice about how much you can withdraw, and when.
If flexibility, accessibility and the potential to gain higher returns are important to you, you could opt for Kiwi Wealth managed funds.
Setting up an early retirement fund through Kiwi Wealth's managed funds.
What’s a managed fund?
Simple – it’s a fund that pools investors’ money in lots of different types of assets, such as shares, cash, bonds and property.
You can choose a Kiwi Wealth managed fund that suits your early retirement goals and attitude to risk, and withdraw money from your account when you need to.
Over the long term, you’re expected to get better returns than you would with a savings account or term deposit.
If you’ve got $500 to kick-start your journey to early retirement, you can open an account with Kiwi Wealth Managed Funds. It’s one of the most accessible actively-managed funds in New Zealand and you can make regular contributions for as little as $50.
KiwiSaver AND Kiwi Wealth’s managed funds
You don’t have to choose between KiwiSaver and managed funds – you could have both.
“If you retire early, managed funds could keep you going till you get your KiwiSaver funds at 65,” says Glen.
“You could also work part-time from, say, 55 or 60, and draw on your managed fund whenever you need it.”
“With Kiwi Wealth managed funds you can even set up a regular withdrawal for $100 or more as an income stream from your managed funds account.”
Here’s one strategy:
- keep contributing to your KiwiSaver investment, benefiting from your employer contribution and your $521 free money from the government
- put the rest of your savings into an early retirement fund through Kiwi Wealth managed funds, benefiting from the freedom to access your money when you need it
Are you ready to take the next step towards financial freedom? You’ll find more jargon-free resources – including online tools to help you work out how much you’ll need for retirement – on our Investor 101 centre.