Compared to other investments, a KiwiSaver plan is pretty straightforward, but unlike many people think, this doesn’t mean that the scheme is a set-and-forget solution. If you’d like your KiwiSaver account to work harder and ‘smarter’ for you, taking a proactive approach is key.

So, here are a couple of important steps to take – the sooner, the better.

Are you in the right fund for your ‘risk profile’?

Now is a good time to check and make adjustments if needed. So, what does ‘risk profile’ mean and, most importantly, what does it have to do with your KiwiSaver plan?

Like any other investment, a KiwiSaver plan entails a certain degree of risk in exchange for potentially higher returns and faster growth. From lowest to highest risk, funds fall into five types: defensive, conservative, balanced, growth, or aggressive.

Generally speaking, the longer you have until you plan to access your money (until age of retirement entitlement or your first-home purchase), the more risk you might be able to take. This consideration, coupled with how you personally feel about money losses, is what makes up your ‘risk profile’.

Now, if you’ve never chosen your KiwiSaver plan (or you don’t remember doing it), you may be invested in a default fund, with a balanced risk level. And especially if you don’t need your money within the next 10 years or so, a balanced fund may not be appropriate for you, whereas a growth or aggressive fund may be a better long-term option. This is because your fund has time to recover from a downturn.

On the other hand, if you need your money in the short term for a first-home purchase, a lower-risk fund may be more appropriate, as you may like to protect your hard-earned money from sudden volatility.

Not sure what fund you’re in?

Knowing where your money is invested is important. So, if you’re not entirely sure what your fund is like, the best way to find out is to check your KiwiSaver account statement or call your KiwiSaver provider and ask them.

Remember, being invested in the ‘wrong’ fund for your risk profile may see you either miss out on key growth opportunities, or stress out because of KiwiSaver movements way too often.

So, get in touch if you’d like to get a closer look at your options: we can help you understand your risk profile, and whether changing funds or provider is a good idea at this time.

Check your contribution rate

Are you contributing just 3 per cent or 4 per cent to your KiwiSaver account? It may not be enough for a comfortable retirement, especially if you’re largely relying on the scheme to build your nest egg.

There are plenty of great calculators online to run some projections, and estimate how much different contributions rates or funds can give you in retirement. Add NZ Super to that and see how close you are to replacing 70 to 100 per cent of your current income in retirement. If you’re not close enough, and you can afford increasing your contribution rate, it may be something worth considering (you can change it again anytime you like).

Please don’t hesitate to contact us if you’d like to know more.

We’re here to help

Looking for quality financial advice and investment planning services? Our team at Pension Transfers are here to answer any questions you might have about UK pension transfers, managed funds, or your KiwiSaver plan.

Click here to contact us or give us a call on 0800 UK 11 NZ to book a review. Over the past 20-plus years, we have helped thousands of clients make informed decisions about their future financial needs.

Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current developments or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance. Past fund performance is no guarantee of future returns.