This article was amended in December 2025.

Combine KiwiSaver and investment funds for the best of both worlds.

By Murray Harris, General Manager at Milford, KiwiSaver and Investment Funds.

As we approach 2026, it’s the perfect time to reassess your financial goals. It’s also a great time to make sure you’re not missing out on the option of having your cake and eating it too.

KiwiSaver is the best thing to have happened to Kiwis and our finances – turning more than three million of us into investors. With over $135 billion currently invested and forecasts which suggest that figure will rise to $213 billion by 2030, KiwiSaver is an incredibly important tool for our retirement savings.

Indeed, for many New Zealanders, it’s their single most important savings tool as they chase financial security and the retirement of their dreams.

Access is limited – and that’s by design

Of course, access to those hard-earned savings is a long way off for many of us. What if you need money before that?

Unless you’re using your KiwiSaver funds to buy your first home or you meet strict requirements under certain early withdrawal provisions, your funds are locked away until you turn 65.

That’s not necessarily a bad thing – KiwiSaver is intended to help fund your retirement, and how many of us are 100 per cent sure we could resist the temptation of dipping into our funds if we were able to?

But it does mean you have limited flexibility should you need to access money sooner.

The solution: use an Investment Fund alongside your KiwiSaver

Fortunately, it is possible to have your cake (long-term peace of mind) and eat it too (the ability to access funds before retirement). The key lies in placing some of your savings in Investment Funds which can sit alongside your KiwiSaver account.

Investment Funds, also called managed funds or unit trusts, generally have the same features as KiwiSaver funds, with the notable difference that your investment isn’t locked in until you turn 65.

As with a KiwiSaver fund, an Investment Fund will commonly incorporate a mix of shares, bonds and cash across local and overseas markets, and will be managed by a professional fund manager.

In some cases, the exact same fund you’re investing in for your KiwiSaver account may also be offered by your KiwiSaver provider as an Investment Fund.

What Investment Funds can give you

By placing some of your lump sum savings (or making regular contributions) into an Investment Fund, you benefit from:

• Diversification
• The skill and track record of the investment team
• The power of compounding investment returns

But unlike KiwiSaver, when you need to access your Investment Fund, you can.

Bear in mind, however, that most Investment Funds will have a minimum recommended investment timeframe you should commit to in order to give yourself the best chance of achieving your goals.

Whether you want to have some funds available for a rainy day, or you have a specific savings goal (such as tertiary education for the kids, a family holiday or a new car), Investment Funds provide the flexibility to save, grow and access your money.

KiwiSaver uptake continues to grow

As of March 31, 2025, there were 3,385,856 KiwiSaver members, representing nearly two-thirds of New Zealand’s population. At Milford, we are noticing more and more of our members partnering Investment Funds alongside their KiwiSaver funds.

We offer a range of Investment Funds from a low-risk Cash Fund to our higher risk Aggressive Fund. Depending on your savings goal, time horizon, and appetite for risk, we have a fund to suit.

If you’re not sure which Milford fund may suit your goals, there are a couple of easy ways to get support. You can use the Milford KiwiSaver Plan Digital Advice Tool for personalised KiwiSaver fund recommendations. If you want help choosing an Investment Fund, or you would simply prefer to talk it through, you can get in touch with our team online or over the phone and we can guide you through your options.

The best of both worlds

As KiwiSaver members, we have become familiar with the benefits of saving a little and often, of diversification, spreading our risk, professional investment management and the power of compounding investment returns over time.

By applying these same benefits to your other savings via Investment Funds, you can enjoy the fruits of your saving and investments before retirement.

And, by utilising both KiwiSaver funds and Investment Funds, you really can have your cake and eat it too!

Disclaimer: Milford Funds Limited is the issuer of the Milford KiwiSaver Plan and Milford Investment Funds. Please read the relevant Milford Product Disclosure Statement at milfordasset.com. This article is intended to provide general information only and does not take into account your personal circumstances. Should you require financial advice, please speak to a Financial Adviser. The disclosure statements of all Milford Financial Advisers contain more information and are available for free on request. Past performance is not a reliable indicator of future performance. Investment involves risk and returns may be negative as well as positive. Visit milfordasset.com/getting-advice to view Milford‘s Financial Advice Provider Disclosure Statement.