If you’re over 65 and still working, you’ve probably started receiving your NZ Super payments. But have you considered what to do with it if you don’t actually need it for day-to-day living?
One smart option could be to invest your NZ Super (or any additional funds you might have available) straight into your KiwiSaver account. This allows you to continue saving while you’re earning, then access those funds when you stop working, or whenever you choose.
KiwiSaver typically offers higher returns than a standard savings account and also has a lower tax rate because it’s a PIE scheme. That means you can grow your long-term wealth more efficiently while keeping your investment strategy working for you. Even small, regular contributions can make a meaningful difference over time.
Once you turn 65, your KiwiSaver savings are “on call” and available to you at any time.
This means you can choose to keep your funds invested in KiwiSaver and earning potential returns, while still having the freedom to withdraw all or part of your balance whenever you like. It’s a level of flexibility that term deposits don’t offer, as those are usually locked in until the term ends.
So instead of your NZ Super sitting in a low-interest bank account, it could be:
Staying invested after 65 can be a smart strategy, but it’s important to remember that government contributions stop once you reach 65, and investment returns can fluctuate. The level of return you might earn, along with the level of short-term risk you take, depends on the type of KiwiSaver fund you choose. That’s where understanding your risk profile becomes essential.
Every investment involves some level of risk, but that’s also what gives your money the opportunity to grow. KiwiSaver funds range from defensive to aggressive, and the right choice for you will depend on how much risk you’re comfortable with and how long you plan to keep your money invested.
If you’re still working and don’t need your NZ Super immediately, you may be comfortable taking on a little more risk for the potential of higher mid-to-long-term returns. A growth or balanced fund might help your savings keep pace with inflation and continue to grow.
However, if you value stability and certainty, a low-risk fund may suit you better. The two main low risk options are called Conservative & Moderate funds. You won’t see the same level of growth, but your balance will be less affected by short-term market ups and downs, and you’re still likely to earn returns that exceed those of a standard savings account.
The key is finding a risk level that feels right for you, balancing your comfort with volatility, your spending plans, and how long you intend to keep investing. In some cases, you can even split your KiwiSaver across multiple fund types, helping you spread your investments across different risk levels and timeframes.
Because your KiwiSaver is fully accessible after 65, you can still adjust your fund type or strategy as your needs change. You can make regular or lump-sum contributions from your NZ Super payments (or any other source) and withdraw money whenever you need it – whether for travel, home improvements, or additional retirement income. Once you’re 65, KiwiSaver gives you the best of both worlds: your investment keeps working for you, while you remain in control of how and when you use it.
If you’re interested in discussing whether staying invested in KiwiSaver is worthwhile for you, we’re here to help. You can book a free KiwiSaver review by clicking here, and our team will help you choose the right KiwiSaver strategy for your goals and lifestyle. Plus, when you complete a review this month, you’ll go into the draw to win $5,000 to spend, save or invest as you please.
The content of this article should not be taken as financial advice, or a recommendation of any financial product. These insights are based on current economic commentary, market pricing for interest rates, and our personal opinion. Threefold is not liable or responsible for any information, omissions, or errors present.