KiwiSaver still attractive in ‘retirement’
More people over the retirement age are choosing to keep their KiwiSaver funds active. That’s the increasing trend noticed by specialist KiwiSaver provider, AMP Wealth Management, across their 65+ year demographic.
“We’re seeing fewer KiwiSaver clients withdrawing all their funds when they reach retirement age,” says AMP Wealth Management Chief Executive, Blair Vernon.
“In fact, nearly 7% less than this time last year, representing about $4 million in KiwiSaver investments.”
Vernon points to low interest rates as one possible reason for the trend, but says KiwiSaver offers more than just competitive returns to older Kiwis.
“Another compelling feature of KiwiSaver for members aged 65+ compared to some other savings products is the ability to withdraw partial amounts from your funds whenever you like, or need, without incurring any penalty. This can be especially important for this demographic as their needs change.”
Further evidence of an increasing pool of active funds for the 65+ year bracket comes from both the Financial Markets Authority’s (FMA) annual profile of KiwiSaver members and a recent AMP Wealth Management survey:
• FMA annual profile of KiwiSaver members shows an 11% increase in members aged in their 70’s in the last two years.
• The AMP Wealth Management survey* revealed that more than 25% of respondents expect to still need to be working fulltime when they reach the 65-year ‘retirement’ age, and over 40% expect to be working part time.
Financial adviser and commentator for grownups.co.nz (New Zealand’s lifestyle website and social club for over 50 year olds) Michael Cave, says the current cohort of KiwiSaver members who have recently retired are most likely very pleasantly surprised at having an unexpected ‘nest egg’.
“We know that an increasing number of older Kiwis are struggling to save financially and many hadn’t counted on getting to retirement having built up a good level of savings, but KiwiSaver is helping to change that.
“For those aged 65+, the fact that their KiwiSaver money is currently working harder for them compared to bank deposits for example, while also allowing greater flexibility, means it makes absolute sense for them to stay in KiwiSaver,” says Cave.
AMP Wealth Management also recognises the importance of employers supporting the wellbeing of Kiwis who choose to, or need to, work beyond the age of 65. That’s why AMP Wealth Management continues to pay employer KiwiSaver contributions of 12% to its employees aged 65+, while in many cases employer contributions typically cease along with the regular government contributions.
* AMP Wealth Management recently surveyed 1000 KiwiSavers across New Zealand aged between 30 and 55.
AMP Wealth Management is New Zealand’s leading non-bank retirement solutions provider with about 225,000 KiwiSaver clients. The average member balance in the AMP KiwiSaver Scheme is $24,424, which is 21% higher than the industry average ($20,195). AMP Wealth Management was the first financial services provider to become a Living Wage Accredited Employer and is a proud community partner of Key To Life Charitable Trust and Dignity NZ. Read AMP’s Help Report for more information.