How Do I Choose the Right KiwiSaver Fund?

The two things that usually matter most are how long until you will use the money and how comfortable you are with your balance rising and falling along the way. As a broad guide, the longer your timeframe, the more growth-focused a fund you can generally consider; the closer you are to needing the money, such as a first home or retirement, the more some people choose to protect it.

What are the main KiwiSaver fund types?

KiwiSaver funds are usually grouped along a spectrum, from more defensive or conservative funds through to balanced, growth and aggressive funds. The more growth-focused a fund is, the more it tends to move up and down in the short term, while aiming for higher returns over the long term. The more defensive a fund is, the steadier it tends to be, with lower expected returns.

How does my timeframe change the choice?

Timeframe is central. Money you will not touch for decades has time to ride out short-term movements, which is why long-term savers often consider more growth-focused options. Money you expect to use soon has less time to recover from a dip, so some people move towards steadier funds as the date approaches.

How do I know if I am in the right fund now?

Many New Zealanders are still in the fund they were first defaulted into, which may be more conservative than their timeframe calls for, or may simply no longer match their goals. Checking which fund you are in, and why, is a useful first step. Whether it still suits you depends on your circumstances.

Does the provider matter as well as the fund?

Fees, fund choices, online tools and service vary between KiwiSaver providers, and over a working life those differences can add up. That does not automatically mean switching is right for everyone, but it is one of the things people weigh up when reviewing their KiwiSaver.

When should I review my KiwiSaver?

A periodic review, and a look after major life changes such as a new job, a house purchase or nearing retirement, helps keep your KiwiSaver aligned with your goals. Reviewing it does not always mean changing anything; sometimes it simply confirms you are on track.

If you would like a hand reviewing your KiwiSaver, our KiwiSaver page explains how we can help you think it through.

The information in this article is general information only and is not intended as financial, medical, health, tax or other advice. It does not take into account any individual’s personal situation or needs. You should consider obtaining professional advice from a financial adviser and/or tax specialist in relation to your own circumstances and before acting on this information.