SuperLife

Time is on your side

Retirement feels a long way off. It is. That's actually the point. Time is actually your biggest advantage - and right now, you have more of it than anyone.

The reason time is the most powerful force in investing, is because of compounding - the way returns build on returns and on your contributions, year after year.

The earlier you start, the harder your money works, and the less you have to contribute later to reach the same outcome.

What this means for you:

KiwiSaver is generally locked until age 65 with limited exceptions such as first home withdrawals.

1. If you’re saving to purchase a first home in the near future, you’ll have a shorter time horizon, and you might value stability of knowing how much you’ll have available for that purchase.
2. If you are investing for retirement, that long horizon means you have time on your side to ride out market ups and downs.

A simple way to think about it is balancing growth and stability.

If your money is invested too aggressively, you may experience larger ups and downs and uncertainty for your KiwiSaver amount when you need to draw it down. However, too conservatively over the long term will result in lower growth potential, where your KiwiSaver savings may struggle to keep up with rising costs.

• Income assets tend to be more stable but generally grow more slowly.
• Growth assets such as shares can move up and down more, but over long periods they have historically delivered higher returns.

The longer you have before you need your money, the more time you have to ride out market ups and downs. If your timeframe is shorter, stability matters more.

It comes down to two things: when you're likely to need access to your money, and how comfortable you are with your balance going up and down along the way.

While age is a useful guide, your fund choice should also reflect your personal circumstances, goals and comfort with risk.

What to focus on in your 20s:

• Review your contribution rate - The default rate is 3.5% but you can choose to contribute more. Even small increases can make a big difference over time as future returns are calculated on a larger balance - not just what you originally put in.
• Maximise your KiwiSaver through government contributions – if eligible*, the Government contributes 25 cents for every dollar you save, up to a maximum of $260.72 per year. To get the maximum amount, you need to contribute at least $1,043 before 30 June each year.
• Choose a fund that reflects your time horizon – if looking to purchase a first home soon, you might value stability, or if your focus is on retirement which is 40+ years away, you can generally afford more growth exposure.

The key action is being in the right KiwiSaver fund and contributing consistently.

With SuperLife, you can choose a fund, or funds that match where you are now - and change at any time with no switching fees. You can choose from diversified funds or build your own portfolio from over 40 funds or choose Age Steps, which automatically adjusts your mix of growth and income assets as you get older.

Help me choose KiwiSaver

Life gets complicated, but don't pause

Your 30s are often when life gets busy - careers, children, competing financial priorities such as a mortgage. It's also when KiwiSaver can quietly slip down the priority list.

But what you do in this decade can have a real impact over time. Compounding works best when it isn't interrupted - so gaps in contributions, while sometimes unavoidable, are worth making up when you can.

If you've taken a KiwiSaver withdrawal for your first home, it's worth getting contributions back on track as soon as you can. If you’ve chosen a more stable fund choice leading up to your first home purchase, it’s a good time to review your fund options as you start saving for retirement.

If you took a savings suspension - perhaps during parental leave or a career change - consider whether you're ready to restart. Even a small voluntary top-up can make a big difference over time.

What to focus on in your 30s:

• If you withdrew KiwiSaver savings for a first home, restart contributions as soon as you're able.
• Consider whether a higher contribution rate is possible -the long-term difference is significant.
• Check your fund choice - think about the trade-off between risk and return, and make sure you're not in a fund that's more conservative than you actually need.

Time to take stock

By your 40s, most people start paying more attention to their KiwiSaver. Retirement might still be a while away, but the decisions you make now carry real weight.

This is a good decade to sit down and do some planning. How much do you have? What might you need? What are your options between now and 65?

What to focus on in your 40s:

• Consider increasing your contribution rate if you've had periods of lower contributions.
• Think about what retirement might look like for you, and roughly what kind of income you'd want.
• Make sure you’ve reviewed your fund choice and it reflects your investment timeframe to retirement.

Getting focused

Retirement might not be a date yet, but it isn't just a vague concept anymore.

With retirement potentially 10 -15 years away, you still have time for your money to grow.

This is often the decade where it might make sense to regularly review your fund mix as you get closer to retirement age. There is no single “right” option - it's about what best fits your situation and how comfortable you are with market ups and downs. Your investment strategy can be changed at any time, with no switching fees.

For many investors, keeping your savings invested and growing after reaching retirement age may help ensure you’ve got a steady retirement income from your KiwiSaver for a longer period rather than drawing it down all at once when you can.

What to focus on in your 50s:

• Review your fund choice with your retirement timeline in mind.
• Make sure you're not leaving money on the table - are you getting the full government contribution each year?
• Think about whether you want to make any voluntary top-up contributions in the years ahead.

Knowing your options

KiwiSaver doesn't end at 65 - it simply changes.

From age 65, you're eligible to access your savings. However, people are often living for 20 - 30 years past age 65. Keeping your funds invested rather than withdrawing everything at once can help ensure your money lasts longer in retirement.

This can make good sense. Your money continues to be managed by the same investment team, in the same funds, with the same low fees. And unlike NZ Super - which is fixed - your KiwiSaver balance can continue to grow.

Since your KiwiSaver investment is ‘unlocked’. You can take regular or occasional withdrawals as needed while keeping your remaining KiwiSaver savings invested and growing.

If you are approaching 65, it's worth thinking about:

• How much you might need in the short term versus the long term
• Whether you want to switch to a more conservative fund to reduce volatility as you draw down,
• Whether a regular withdrawal or lump-sum approach suits your retirement income needs
• Whether you want to keep some of your balance invested while drawing from the rest

SuperLife gives you flexibility here. You can withdraw what you need, when you need it, while leaving the rest invested in funds of your choice.

SuperLife's regular withdrawal option: You can keep growing your savings in retirement, and still draw an income. You can use the SLKS Initial Retirement Benefit Request if you are withdrawing from your KiwiSaver for retirement for the first time.

We’re here to help: Fill out our contact form or call us on 0800 27 87 37, to talk through your options.