Why older people may be left out of KiwiSaver

The Financial Markets Authority has highlighted a gap in financial advice for Kiwis reaching 65, with many struggling to make decisions about their KiwiSaver savings. Romil Ghelani, the head of financial advice, noted that managing one's savings in retirement is one of the most challenging financial transitions someone can face.

While products and services are available to assist, they are less common compared to other countries. Ghelani emphasized that the KiwiSaver system could do more to support those in transition, stating that professional financial advice is essential for a value-add. He observed that most guidance is directed towards higher-net-worth clients, leaving others to navigate complex decisions with limited professional assistance.

Major KiwiSaver providers are taking steps to help those nearing their retirement age. For instance, ANZ Investments plans to contact KiwiSaver members a year before they can access their funds, encouraging them to seek free financial advice tailored to their individual circumstances. Sian August, ANZ's general manager, explained that members can also set up regular withdrawals to generate a steady income stream.

Some individuals continue contributing to their KiwiSaver account after turning 65, either through salary payments or lump-sum contributions, which can be beneficial if they don't need the funds immediately. ASB acknowledges that members' needs change as they approach retirement and offers free advice sessions six weeks before members can access their funds, along with guidance and tools to help them make informed decisions about their retirement savings.

Milford Asset Management provides free access to financial advisers and digital tools to help clients explore various withdrawal options and scenarios.