KiwiSaver will reach a milestone next month, when it will be five years since it was introduced.
When members reach the official age of retirement, at present 65, and have been in the fund for a minimum of five years they can choose to withdraw their funds or leave them invested in KiwiSaver.
When you have access to your KiwiSaver funds your provider or adviser should let you know what your options are. These should include:
Leaving your funds invested until you need them.
Continuing to make contributions to your fund.
Making a full withdrawal.
Setting up a regular withdrawal from your fund.
Making lump sum withdrawals from time to time as your need funds.
If funds are left in KiwiSaver you will no longer receive a Government tax credit and your employer will not be obliged to make a contribution.
KiwiSaver providers offer a range of different funds, including conservative, balanced and aggressive funds.
Conservative funds are more heavily invested in fixed interest and aggressive funds are more heavily invested in shares while balanced funds are in-between.
Your investment can be switched at no cost from one type of fund to another.
You should ensure that your chosen fund is appropriate for your financial situation.
Your decision about what to do with your funds will depend on different factors, including:
Whether you need income from your investments.
The amount and nature of other investments you have.
Your attitude towards risk and return.
Your time frame for investing.
It will be interesting to see how eligible members respond in July to having access to their funds, which in some cases could be substantial.
The more sensible will obtain professional advice before making decisions.
Liz Koh is an authorised financial adviser. The advice given here is general and doesn't constitute specific advice to any person. A free disclosure statement can be obtained by calling 0800 273 847.