It might be tempting to take the full amount out straight away and spend it all in year 1 of your retirement. And believe us we have seen an occasional investor do this and buy a great new boat. This can be fun, but we would generally advise a less extreme approach.

If you stop working at the age of 65 it is a good time to work out what your general living expenses are. The NZ government super will cover part of your living expenses but no more than the basics. Some of your expenses may need to be covered from investments, such as KiwiSaver.

You can set up a regular withdrawal from your KiwiSaver investment to cover these expenses. Your financial adviser can help you work out how these drawings will impact your long-term retirement savings.

In some cases, investors only take the investment returns, leaving a nice inheritance legacy for their children or grandchildren. Lucky kids. In other cases, the investor will eat into their capital slowly and use their retirement nest egg to cover their retirement expenses throughout retirement.

However, do not feel rushed to decide straight away, we will keep investing your KiwiSaver funds over the age of 65 just like we did before you turned 65. So, if you need a bit of time to work out your plans that is fine. Also, if you choose to continue to work after the age of 65 you can continue to invest as you have been doing. There is a lot of flexibility.

Finally, another important tip to remember is that just because you may be entering retirement this does not mean you necessarily have to have 100% of your investments in conservative assets. Depending on how long you expect to continue investing, having a good balance between conservative and growth assets is still important, especially as your retirement investment timeframe can and hopefully will be a long and healthy one.