KiwiSaver at 65: withdraw it or leave it invested?

At 65 your KiwiSaver unlocks: you can withdraw any amount, at any time, or leave it all invested. Most people do best by leaving it in and drawing what they need, because it keeps earning while you spend it. On the government's KiwiSaver statement assumptions (2.5% a year after 65, 2% inflation), each $100,000 gives about $81 a week until 90, or about $69 a week until 95, in today's dollars. Some things stop at 65: the government contribution, compulsory employer contributions and your annual projection. Rules checked 12 November 2026.

What changes on your 65th birthday

The withdrawal rule is in the KiwiSaver Act, Schedule 1, clause 4: once you reach the NZ Super qualifying age, currently 65, you may withdraw any amount up to your balance. The older subclauses that limited some withdrawals at that age were repealed on 31 March 2026.

Nothing happens automatically. Your money stays in the same fund until you ask your provider for a withdrawal or change fund.

Withdraw it all, or leave it invested?

You have three broad choices:

1. Take it all out. This makes sense for a specific use: clearing a mortgage, a planned renovation, or moving the money into another investment you prefer. Paying off debt at a mortgage interest rate is a guaranteed return. See retiring with a mortgage.
2. Leave it all in for now. If you are still working or have other money to live on, there is no need to touch it. It keeps earning.
3. Draw it down gradually. Many providers let you set up regular withdrawals, weekly, fortnightly or monthly, as a top-up to NZ Super. This is how most people turn a lump sum into an income.

The case for staying invested is simple arithmetic. With $200,000 and a steady income over 30 years in today's dollars, a 2.5% return gives about $138 a week, but a 1.5% return gives only about $118. Moving everything to a bank account at a low rate the day you turn 65 quietly cuts your income for life.

Taking it all out "to be safe" also loses the PIE tax treatment: returns inside KiwiSaver are taxed at your prescribed investor rate (PIR), capped at 28%, rather than your marginal rate. A retiree on NZ Super alone, with taxable income of $33,663.24, typically qualifies for a 17.5% PIR. Tell your provider your PIR; see tax on retirement savings.

How much income does a balance give?

The government's KiwiSaver statement rules (FMC Regulations Schedule 7A) turn a balance at 65 into a weekly amount using a 2.5% return after fees and tax and 2% inflation, until age 90. We show the same formula to 95, the age we plan to:

Those amounts rise with prices each year and use up the whole balance by the end age. Add NZ Super on top: $854.08 a week for a couple, $555.15 for a single person living alone.

If you draw more, it runs out sooner. At the same 2.5% return, $200,000 lasts about 21 years if you take $10,000 a year in today's dollars, but only about 14 years at $15,000 a year. Our drawdown strategies tool compares a steady amount, a fixed percentage, guardrails and spending down to an age.

Worked example: a couple with two accounts

Our example couple are both 55 today, earn $80,000 and $60,000, and have $150,000 and $100,000 in balanced KiwiSaver funds at the default contribution rate. On the Schedule 7A assumptions their accounts grow to about $235,200 and $163,400 at 65, in today's dollars: about $398,600 together.

Spread over 65 to 95 with the statement formula, that is about $274 a week in today's dollars, or about $325 a week if it only needs to last to 90. On top of NZ Super of $854.08 a week, the couple would have about $1,128 a week on fixed returns.

Our full engine, which adds their $50,000 of other savings and tests 1,000 markets, gives a retirement pay of about $1,052 a week that holds in 9 of 10 markets, and about $1,154 in a typical market. The gap between the fixed-return figure and the 9 in 10 figure is the price of protecting against poor markets.

The couple do not have to treat the two accounts separately. What matters is the total they take each year; they might draw from the larger account first, or from both in proportion.

Which fund to hold from 65

Many people move to a conservative or defensive fund at 65 because it feels safer. But retirement can last 30 years, so part of your money has a long time to grow. We tested a couple with $300,000 at 65 drawing a steady amount until 95 in each fund type. Mean returns are the Schedule 7A fund returns; the year-to-year swings are our own assumption.

This is the honest picture. On average returns, a growth fund pays far more. But if you need the money to last in poor markets too, the higher swings eat up most of that advantage, and the safe amount is much the same from conservative to growth. Defensive is lowest on both measures.

So the choice is less about the safe amount and more about what you do with the upside. A higher-growth fund gives a better chance of more money later, and of leaving something behind, at the cost of a bumpier ride. Some retirees split the difference: a year or two of spending in cash or a conservative fund, the rest in balanced or growth. Our guides to fund type in retirement and sequence of returns risk go further.

Practical steps at 65

1. Check your balance and fund a few months before your birthday. If you have been in a growth fund, decide whether to keep all of it there.
2. Ask your employer whether they will keep contributing after 65. If not, decide whether to keep your own deductions or stop them with a KS51.
3. Update your PIR once your income drops.
4. Decide on a draw rate and set up regular withdrawals if your provider offers them, or plan larger withdrawals once or twice a year.
5. Keep the projections going yourself. Your statement stops showing one after 65. Our retirement calculator takes your balance and shows a pay for life. Before 65, KiwiSaver Calculator NZ projects your balance on the same assumptions as your statement.
6. Update your will and beneficiaries. On death, a KiwiSaver balance is paid to your estate.

This is general information, not financial advice. A licensed financial adviser can help with fund choice and drawdown for your situation.

Questions

Can I take all my KiwiSaver out at 65?

Yes. From 65 you can withdraw any amount up to your full balance, in one go or in parts. Ask your provider for a retirement withdrawal.

Should I leave my KiwiSaver invested after 65?

Usually, unless you have a specific use for the money such as clearing debt. Invested money keeps earning while you draw on it; on the statement assumptions each $100,000 supports about $69 a week until 95.

Can I keep contributing to KiwiSaver after 65?

Yes. Your own deductions continue if you keep working, unless you stop them with a KS51. Your employer no longer has to contribute, and the government contribution stops.

Are KiwiSaver withdrawals taxed?

Returns are taxed inside the fund each year at your PIR, so withdrawals are not taxed again as income. That is why it is worth keeping your PIR correct.

Should I move to a conservative fund at 65?

Not automatically. In our tests the steady amount that lasts in 9 of 10 markets is much the same from conservative to growth, while growth gives more on average. Defensive was lowest on both.