Need help to choosing the right KiwiSaver fund?
KiwiSaver funds are usually categorised in Conservative, Balanced and Growth funds.
Conservative funds – Designed for people who are saving for the short-term and will need access to their savings in the near future – up to 4 years. The idea is your savings balance is less likely to fluctuate significantly but won’t make as much in the way of returns.
Balanced funds - Designed for people who are saving for the medium-term and will want access to their savings in about 5-6 years. The idea is your savings may fluctuate from time to time but over the medium term will potentially make higher returns than a conservative fund.
Growth funds – Designed for people who are saving for the long-term and will want access to their savings further down the track - in 7-15 years’ time. The idea is your savings may go up and down due to the nature of the market but will potentially make higher returns than a balanced fund in the long-run.
So, what should I do from here?
Making sure you’re in the right fund is probably one of the best things any of us can do to make sure we’re on track. After all, every bit counts when aiming for a relaxing, financially resilient life in retirement.
And if it means the difference between tens or even hundreds of thousands of dollars, it’s probably worth taking a few minutes now to check if you’re in the right fund.
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Note – This blog provides general information only and doesn’t provide personalised financial advice.
*Calculation Assumptions
- Industry-standard forecast rates of annual return (after fees and tax at 28%) as set by the FMA, across four main fund types – Conservative 2.5%. Balanced 3.5%, Growth 4.5%
- No savings suspension or withdrawals take place
- We’ve assumed an annual salary increase of 3.5%, a 3% employee contribution rate and a 3% employer contribution rate.
- Your annual government contribution entitlement amount is received each year, up to a maximum of $521.43. This figure is not adjusted for inflation.
- Fees, tax rates and government contributions are assumed to continue unchanged until you reach age 65.
- All projected balances are in today’s dollar terms (by adjusting for the impact of inflation at 2% per annum).
Booster Investment Management Limited is the issuer of the Booster KiwiSaver Scheme (Scheme). The Scheme’s Product Disclosure Statements are available at www.booster.co.nz or by contacting your financial adviser.
