Tag Archives | retirement income

25 June 2012

Retiring on KiwiSaver

Filed under: Retirement - Tags: , - @ 2:53 am

Retiring on KiwiSaver

A KiwiSaver milestone will be reached in July this year, five years after KiwiSaver was first introduced. When a KiwiSaver member reaches the official age of retirement (currently 65) and has been in the fund for a minimum of five years they can choose to withdraw their funds or leave them invested in KiwiSaver.  

When you have access to your KiwiSaver funds, your provider or adviser should let you know what your options are. These should include:

  • Leaving your funds invested until you need them
  • Continuing to make contributions to your fund
  • Making a full withdrawal
  • Setting up a regular withdrawal from your fund
  • Making lump sum withdrawals from time to time as your need funds

If funds are left in KiwiSaver, you will no longer receive a Government tax credit and your employer will not be obliged to make a contribution. KiwiSaver providers offer a range of different funds, including conservative, balanced and aggressive funds. Conservative funds are more heavily invested in fixed interest and aggressive funds are more heavily invested in shares while balanced funds are somewhere in between. Your investment can be switched at no cost from one type of fund to another.  You should ensure that your chosen fund is appropriate for your financial situation.

Your decision about what to do with your funds will depend on a number of different factors, including:

  • Whether you need income from your investments
  • The amount and nature of other investments you have.
  • Your attitude towards risk and return
  • Your time frame for investing

It will be interesting indeed to see how eligible members respond in July to suddenly having access to their funds, which in some cases could be substantial. The more sensible will obtain professional advice before making decisions.

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31 August 2010

Don’t Just Retire: Reformat!

Filed under: Retirement - Tags: , , - @ 11:05 pm

Dont’ Retire: Reformat!

The word ‘retirement’ conjures up a range of confusing or even contradictory feelings for people these days. Once upon a time, retirement was a defined day, usually marked by a birthday, after which any form of paid employment ceased immediately. A combination of factors, including the end of compulsory retirement and increased longevity, mean that people are now working well past the age of eligibility for their pension. For some, this means just continuing on with their career as it was, either full time or part time, but an increasing number are seeing retirement as an opportunity to do something completely different in life. What better time in life to experiment, with a modest standard of living guaranteed by pension income, no mortgage payments and no dependent children to worry about?

There are many famous examples of people who have started businesses late in life, including Ray Croc, founder of McDonalds and Colonel Sanders, founder of KFC who had both celebrated their 65th birthdays before they created their global empires. For some, the motivation to try something new is driven by the desire to have a higher income in retirement, while for others, it is all about the excitement of trying new things; perhaps things they have always secretly wanted to do.

There is a great little book called ‘Don’t Just Retire: Reformat’ written for such people by Dr Lynda Falkenstein (Niche Press, 2005), full of ideas for how to reinvent yourself in retirement. Lynda suggests three important questions to ask yourself: If you could, with a wave of a wand, be doing anything you want, what would it be? What is it that gives you the greatest personal joy and fulfillment? What are you doing to ensure ‘it’ is an enduring feature of the rest of your life?

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