KiwiSaver Default Fund Mistakes

At Super-Advice we are about all things financial, but more importantly, helping people understand so they can get ahead financially.

In today’s blog post we share with you our experience with KiwiSaver and how you can make sure you are getting the most out of your investment.

Why KiwiSaver is so good

When we have our advice conversations with many of you. Too many people seem to be sitting in a default fund with KiwiSaver.

Now we are real advocates of KiwiSaver. It’s a wonderful thing. And very quickly I’ll tell you why, it’s forced savings and we love savings.

There’s nowhere else where you can put in some money, like a hundred bucks and someone else puts in a hundred bucks, that would be your employer. You also get contributions every year from the government.

It utilises compounding interest and it just grows over the years. That means that a lot of people when they hit retirement will have a lot more money than they would have otherwise had.

That’s the financial freedom that we want you to have.

There are a few things you can do to make sure you are getting the best out of your KiwiSaver.

Your KiwiSaver Decisions

The first decision with KiwiSaver is you need to decide to go in it.

For all those that have that, the next decision is where would you like your KiwiSaver to be?

Who do you want to manage your KiwiSaver and why do you want them?

We see a lot of people saying, “oh, I want my KiwiSaver with the bank so I can see it on my internet banking”.

That’s handy, but you should be wanting the MOST MONEY, not the fact that you can look at it on your phone.

Check which fund you are in

The problem today or the issue today is that a lot of you have made the decision to go into KiwiSaver but you haven’t chosen who you’d like your KiwiSaver provider to be, or selected how you want your money invested.

There are a lot of options to choose from.

Some KiwiSaver providers might have three, some might have five, and some might have 35, but there are so many options for you on how you would like your money invested.

When you don’t make a decision, you just get put into a default fund.

Now for the first 12 years of KiwiSaver, the default fund was a conservative fund.

That means super duper, low risk, and super duper low returns, and if you are 25 and you are in a default fund, you are absolutely boom! Shooting yourself in the foot.

You will miss out on hundreds of thousands of dollars. And that’s no lie.

Recently, there were some changes made to KiwiSaver and the default fund is now a balanced fund.

Conservative funds essentially are for timid investors and older people.

The next level up, and now the default fund is a balanced fund, which is so much better.

If you are 25 or 35 and you’re in a balanced fund and you already own a house you are in the wrong fund.

I just want you all to know that because it will ultimately cost you lots and lots of money.

How Super-Advice can help

We want to teach financial freedom here, that does not mean that you’re a Mark Zuckerberg, Facebook-owning billionaire. It means that you’ve just got no money worries.

Knowing that your future’s gonna be taken care of cash-wise is a big weight off your shoulders.

If you’re in a default fund and you’re not sure what you should be in, come through to us. We’re here to help.

That’s a wrap

So what do you think? Will you be checking what KiwiSaver fund you are in?

If you need any financial help or advice please get in touch with us at Super-Advice.

Contact Us

" " indicates required fields