What to do with your Kernel KiwiSaver once you turn 65

At 65 many Kiwis retire or start to wind down at work - and most are eligible for NZ superannuation. This is an exciting time, but it’s much more exciting if you’ve got your finances sorted.

To help you enter retirement with confidence, here's some things you should be considering about KiwiSaver, your investments, and NZ Super at 65.

At 65 you’re eligible to withdraw your KiwiSaver, provided you’ve been contributing for five years. There are three main options to consider, and which is right for you will depend mainly on your spending requirements (which we worked out in our approaching retirement guide), your funds outside of KiwiSaver, and personal preference.

1. Withdrawing part of your KiwiSaver

You can withdraw any amount from your KiwiSaver at any time once you’ve reached 65. Some people withdraw a year’s worth of living costs at a time, others pay themselves a monthly stipend to supplement NZ Super, other retirees even withdraw chunks to pay for large expenses like holidays.

You might choose to withdraw part of your KiwiSaver because it allows you to fund your ongoing living costs and withdraw as needed, while leaving the rest to continue earning returns.

2. Withdrawing it all and closing your account

You’re free to withdraw 100% of your KiwiSaver, but if you do it’s important that you have a plan to safeguard and grow your balance with other investments outside of KiwiSaver. These could include savings accounts, term deposits, or index funds.

3. Leaving your KiwiSaver alone (for now)

You don’t have to withdraw your KiwiSaver at 65. In fact, if you don’t need it, it could be a good idea to leave it invested and growing in the background. The important part is making sure you’re in a good fund for your age and stage, and not over-paying for fees. Read our guide on how to make the most of your KiwiSaver.

It’s important to make sure you have available cash sitting outside of KiwiSaver you can use for everyday living costs.

Ready to withdraw part or all of your Kernel KiwiSaver balance? Contact our team to request a retirement withdrawal form, fill it out and return it (along with proof of your bank account).

Turns out NZ Super doesn’t just show up in your account - you need to apply for it. You can do this up to 12 weeks before your 65th birthday. Importantly, if you apply after you’re 65, you will only be paid from the date you applied - meaning you’ll miss out if you apply late.

Another key part of retirement planning is creating a drawdown plan, or in other words a strategy for withdrawing from your KiwiSaver or investments. Whether you’re doing it inside, or outside KiwiSaver, the idea is the same - this is all about making your money last.

• How much will you need? To figure out a drawdown plan, you need to calculate how much you’ll spend in retirement. For more information, read our full guide: How much do I need to retire in NZ?
• The 4-6% rule: a common rule of thumb in New Zealand for retirement spending is between 4-7% of your starting balance each year.
• Super + investments: remember (if you’re eligible) you’ll get super to supplement any KiwiSaver withdrawals. That’s $28,867.80 a year for a single household, or $44,412.16 for a two-person household if you’re on the M tax code at 1 April 2026.

The above concepts will help you work out how much you’ll spend, but it’s also a good idea to consider how you can make your money go further. The fact is, we’re all living longer these days, so chances are your retirement nest egg will need to last for 20 to 25 years or longer.

One very popular way to do this in retirement is the bucket strategy - this allows you to keep investing in high growth assets, without risking your entire nest egg. Your money will be split into three buckets, based on when you plan to spend it:

Bucket one - 7+ years - High growth

The money you won’t need for seven or more years goes in here. This bucket is your growth engine - it’s full of stuff like high growth index funds and ETFs, and individual shares. The idea is that you can handle a bit more volatility with this bucket because you don’t need it for 7+ years - and as a result you have the potential to achieve higher returns.

Bucket two - 3-7 years - Balanced growth

The money you’ll spend in the next three to seven years goes here. It’s home to more balanced investments like balanced funds - options that have potential for some growth, but not too volatile.

Bucket three - 0-3 years - Conservative

The money you’ll spend in the next three years goes here. Because you’ll need it soon, you might not want to invest in volatile assets - many retirees stick to conservative funds, cash funds, and high interest savings accounts. For example, you might pop three months of spending money in a savings account, and the rest in a cash or conservative fund.

Refilling and rebalancing the buckets

Once you’ve got your buckets set up, the idea is that you should rebalance and refill them all regularly - perhaps annually or quarterly. That means you’ll need to take from bucket two, to fill bucket three back up to contain three years of spending money - and then top bucket two up from bucket three to contain around four years. Simple.

Once you’ve got your retirement strategy all set up, it’s time to keep an eye on your spending, check on your investments annually (at least), and look at estate planning and your will.

Read more about making your money last during retirement.

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.