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Want to retire before 65?
Conventional wisdom holds that we work until the age of
65, at which point we can retire, receive NZ Super and
access the funds we have invested in our KiwiSaver accounts.
But what if we wanted to retire early?
“Retiring before the age of 65 might sound a bit pie in the sky,” says Joe Bishop, Kiwi Wealth General Manager Customer, Product & Innovation.
“But by arming yourself with a long-term plan, maintaining financial discipline and choosing the right investments, an early retirement is an attainable goal.”
Below are Kiwi Wealth’s tips and strategies on how to make the most out of your investing so that you can retire before 65.
Start planning now
“If you want to retire early, you’ll need a plan” says Bishop.
Retiring before the age of 65 means you will not have access to your KiwiSaver limits or be receiving NZ Super. Knowing how to fund an early retirement will require forward planning, a lot of scrimping, saving, and sound investment decisions.
How to retire faster
“People looking to take an early retirement will need to identify how much money they will need during retirement and make smart investment decisions to achieve their goals.”
Term deposits have traditionally been seen by Kiwis are a safe place to slowly and steadily grow wealth. But with interest rates at historic lows, returns on term deposits are not what they used to be – and Kiwis are beginning to look for other options.
What are your options?
“For savvy investors looking to retire before 65, KiwiSaver is just one of the investment options they will be looking to use in combination with others. Managed funds offer a range of risk and return profiles, just like KiwiSaver, with the advantage that investors are able to access their funds at any time.”
One strategy
One strategy employed by people looking to retire early is to keep contributing to their KiwiSaver accounts to take advantage of the $521 annual payment from the government, while also opening up an early retirement fund through Kiwi Wealth managed funds.
“If you retire early, managed funds could keep you going till you get your KiwiSaver funds at 65,” says Bishop.
“The sooner you start thinking and planning for your retirement, the better.”
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