I am 65 years of age and working fulltime. I am still contributing to KiwiSaver and my employer will continue to contribute until I am 68 years of age. Our mortgage and KiwiSaver savings are similar balances. I wonder - should I pay the mortgage off now with what I have got in my KiwiSaver, or do I keep paying it off whilst I am still working? I have until July 2019 to pay off my mortgage. I have been in KiwiSaver for more than five years, so now that I am 65 I can apply to withdraw the money if I want to.
You are fortunate that your employer is willing to continue making their contributions until you are 68, as they are not obliged to do so (except for those members who join KiwiSaver between the ages of 60 and 65 - their employers should contribute for five years).
You are asking a good question. Many people would say it is a good idea to pay off your mortgage as you can't guarantee that your KiwiSaver will give you a better return.
You know what your mortgage is costing you in interest, but you don't know what you will get from your KiwiSaver. But mortgage rates are at record lows, so wouldn't your KiwiSaver give you a better return?
Conservative KiwiSaver funds have averaged 5.25 per cent per annum after fees and tax at 28 per cent for the five years to June 30, 2016 (according to the Sorted FundFinder tool).