Turning 65 is significant for a number of reasons the least of which, it's when most people decide to stop working for a living.

While many seniors today are choosing to work past age 65, the ability to start taking NZ Super from 65, makes it an attractive time to wind down. An added incentive to move from the earning to spending and relaxing phase of life is KiwiSaver, especially for those who've padded their nest-egg.

The greater concern is knowing how much of that nest-egg you can safely spend and how to ensure a long-term comfortable retirement given the complexities of ageing.  

With NZ Super payments covering only the basics (ie. power, heat, phone and food; not rent or mortgage payments) many retirees need to think carefully about how they'll spend their private savings and manage their money, to make it last as long as they do.

A common misunderstanding among KiwiSavers is that once they turn 65, the funds need to be spent or else transitioned to a non-KiwiSaver fund. In fact, there is no requirement to move the funds or spend them. Your funds will remain invested as normal. 

If desired, you can make lump-sum withdrawals or set up auto payments to yourself from your funds.

The biggest change at 65, is that under the current rules of KiwiSaver, Government will no longer pay the $521 top up to your account and for most, their employer contributions will also cease. If you continue to work past age 65, you can continue to pay into your account to build up savings.

The strategy you choose for this 'decumulation' phase will depend on your financial needs, security and plans for retirement.

The risk to those with no plan and no savings other than KiwiSaver is that they'll outlive their funding source.

Retirement experts have long warned that NZ super is not enough to live on, not at least if you plan to retire in Auckland, Christchurch and Wellington where the cost of living is very high. (See Massey University Fin-Ed retirement expenditure research here).

Knowing how much of your KiwiSaver you can safely spend depends on a few factors: how long you live, your lifestyle, your health and your objectives in retirement.  No one has a crystal ball but looking at the longevity of family members can be a guide or else using longevity projections from Government actuaries. 

For Kiwi men, it's 79 and Kiwi women is 83. The projections for younger generations are much longer.

If you're uncertain about your situation, a financial advisor can be helpful. There are also some useful resources and calculators available including Sorted.org.nz's retirement planner. 

Understand there are options and piece together a plan that gives you peace of mind.

Whether you decide to leave your KiwiSaver fully in tact or set up partial withdrawals, it's important to review whether the fund type you're invested in is still appropriate for your risk appetite and age, to review your fees and consider some projections for the future.

Legislative change 

From July 1, 2019, KiwiSaver will open up to a whole new audience.

For the first time, those over 65 will be allowed to join KiwiSaver. While there is no longer a $1,000 kickstart and no Government contributions, a few employers are paying employer contributions past 65 although they're not legally required to do so.

Simplicity also has a Guaranteed Income Fund within KiwiSaver that is a one of a kind in KiwiSaver. From age 65, members receive a 5% income on the balance in their account at 65 or if they joined from age 60 and it was higher balance, the higher amount. The guaranteed amount is for life and comes from the investment capital.

Read more about that here and calculate how much you could receive.

Finally, if you'd like to join Simplicity's Retirement Planning classroom, you can sign up here.