Approaching retirement? Here's how to get financially sorted with Kernel

Retirement used to be a far off concept, but by your 60s it’s just around the corner. The way you set up your finances during this stage can profoundly affect the rest of your life - making good choices will mean more freedom and a better lifestyle. Who doesn’t want that?

To help you navigate this next stage, this article asks a series of portfolio health-check questions for you to think about.

You’re now five years or less out from retirement age so it’s worth doing a little health check on your investment strategy, here are some things to think about:

• What are your retirement goals? Working out what your desired retirement lifestyle is will help inform how much money you need to fund it and if you’re on track to achieving this lifestyle. Maybe you want to go travelling or sell up and move closer to the kids, everyone's lifestyle will look different and so will the cost of their retirement. We explain more and how you can work out how much retirement will cost in this guide.
• Has your risk tolerance changed now that you’re in your 60s? You may be less willing to take on riskier investments because you’re going to want this money sooner and your focus is more on preserving rather than growing. Maybe it’s time to consider more conservative investments, like bonds, or conservative funds.
• Does your KiwiSaver fund still reflect your time horizon till retirement and current risk tolerance? Your time horizon is now around five years or less so it's worth checking this against your current KiwiSaver fund recommended investment years. If you’re wanting to take on less risk with your KiwiSaver account, you might want to consider conservative or balanced funds.
• How are your investments being taxed? Different investments can have different tax treatments, which may affect your after-tax returns. By choosing the right structures and keeping your settings accurate, you can reduce "tax leakage" and ensure more of your returns stay invested, learn more about building a tax-efficient portfolio here.

As your income changes in the lead-up to retirement or once you stop working, your PIR may also change. If your PIR is set too high, you could end up paying more tax than necessary. Take a few minutes to check you’re on the correct PIR here.

Wherever you’re at with your planning, your 60s are the perfect time to do a detailed review of your investments. This is all about simplifying finances so that you know exactly how much you’ve got to work with, and so hopefully that it’s easier to draw down when you reach retirement.

• Track down any old investments you’ve made - whether that’s shares, crypto, managed funds, and consider consolidating them (or at least ensure you’re aware of them).
• Keep a note of term deposits and other bank savings accounts and consider consolidating them (or pop their end dates into a calendar).
• Check elsewhere for any unclaimed money from the NZ Government, sharebrokers, insurance companies and more. MoneyHub has a fantastic guide on unclaimed money, how to find it, and how to get it back.

The above is a bit like a roll call for your finances. Once you’ve done this, you’ll know exactly how much you’ve got and you’ll be able to simplify and consolidate a little if need be. Making it easier to keep track of your money in future.

Retiring before 65 is an appealing goal. Whether you want to finish work entirely or transition into part-time consulting or passion projects, stepping back early gives you more time for travel, family, and hobbies during what many call the energetic "Go-Go" years of retirement.

However, early retirement introduces a specific financial challenge in New Zealand: the gap before traditional safety nets of KiwiSaver access and NZ Super kick in at 65. If you choose to retire before 65, you must fund 100% of your living expenses without those two streams meaning you need an accessible bridge funded by non-KiwiSaver savings like high-interest savings accounts and investments like conservative funds.

Retirement is now just around the corner, so the focus should be on making sure your money is organised, accessible, and ready to support the lifestyle you want.

As you approach 65, make sure you:

• Review your KiwiSaver and investment settings to ensure they match your retirement timeframe and risk tolerance.
• Work out how much you'll need to spend in retirement and compare that with your expected income from NZ Super and your investments. Sorted has a great calculator and resources for navigating retirement here.
• Consolidate old accounts, investments, and savings so you have a clear picture of your finances.
• Consider whether downsizing, renting out part of your home, or other housing changes could improve your retirement income.
• If you're planning to retire before 65, make sure you have enough savings outside KiwiSaver to bridge the gap until NZ Super begins.
• Check your eligibility for NZ Super and understand the application process before you turn 65. You can usually apply up to 12 weeks before your 65th birthday, and applying early can help ensure your payments start on time. Work and Income has the latest information on eligibility requirements and how to apply.

It’s important to review your progress every year or so, then adapt your strategy as you get closer to retirement or things change.

Kernel Wealth Limited is the manager and issuer of the Kernel KiwiSaver Plan and Kernel Funds Scheme. Product Disclosure Statements for the Kernel KiwiSaver Plan and Kernel Funds Scheme are available at Kernel Wealth | Resources & Documents. Investing involves risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time. The information provided should not be relied upon as investment advice or recommendations and should not be considered specific legal, investment or tax advice.