Find The Best KiwiSaver Scheme for you 30 Sep 2015
There are five types of KiwiSaver funds you are able to select when considering your contributions. When you put money into KiwiSaver, managers invest it in income or growth asset. Income assets pay interest and generally the KiwiSaver fund gets the money back at the end of the term. Similarly, growth assets pay dividends or rent and you will gain when these assets grow. Growth funds are more risky and are good for those who intend to leave their funds in KiwiSaver for ten plus years. If you intend on using your funds sooner, say in the next three years, you need to choose the best KiwiSaver scheme for that scenario. You can change your Kiwisaver quite easily using our website.
Below are the five types of KiwiSaver schemes. Compare these schemes and choose the best KiwiSaver scheme for you.
Defensive Funds: If you don’t want your KiwiSaver to ever go down this is the right scheme to select. It has little risk and is good for those people who intend on withdrawing their funds in the next three years. If purchasing your first home is on the horizon, this is a good KiwiSaver scheme for you.
Conservative Funds: This has more risk than the previous KiwiSaver scheme above but is still a low risk option. A good option for those people who are seeking average long-term returns. This is a valid KiwiSaver scheme for those who intend on using their funds in the next three to six years.
Balanced Funds: This is a fairly a middle of the road option and sits on neither side of the fence being, low or high risk. It is a middle choice. Occasionally your account will fall, and then you will see mid-range long-term returns. This is a scheme that is a good option for those who plan on using their money in the next 5/6 to 12 years.
Growth Funds: The name says it all. Your account will fluctuate a reasonable amount. Don’t panic and switch to a lower-risk fund when you see this. Over time this will bring fairly high growth over the long term. This option is valid for people who intend on leaving their funds untouched for 10 years or more.
Aggressive Funds: As the name suggests, this is the riskiest option with 90% to 100% of funds used in growth assets. This is the best KiwiSaver scheme if you are looking for strong long-term growth and you know you will stick with the fund even when your balance falls fast (temporarily). This option is only recommended to those who will leave their money in KiwiSaver for at least ten years.
Got through your options and compare the KiwiSaver schemes and choose the best one for you. Changing your KiwiSaver plan is easy and free with most providers.