Choosing a KiwiSaver fund is not a one-time decision. As your income grows, your financial goals evolve, and your stage of life changes, the fund you’re in should reflect that.

While you might start off in a default fund when you first enrol, failing to review your fund choice can limit long-term growth or expose you to unnecessary risk as your circumstances change. 

Understanding fund choices

KiwiSaver funds are generally grouped by how much risk is associated with the investments they hold: 

• Conservative funds are lower risk. They hold more cash and bonds and aim for steady, but slower growth. These funds are suited to those nearing retirement or who need to access their funds soon – for example, if you are looking to use your KiwiSaver funds to buy your first home imminently. 
• Balanced funds combine bonds, shares and other investments. They aim for a balance between growth and income and offer a moderate level of risk and potential return.  
• Growth or aggressive funds typically invest heavily in growth assets like shares, property and derivatives. They are higher risk and can be more volatile but should offer the greatest potential return over time.  

Your choice should reflect how far away you are from retirement or purchasing your first home and how comfortable you are with ups and downs in the market. 

Key life stages should trigger a fund review 

There’s no one-size-fits all answer when it comes to KiwiSaver, which is why it is important to review your fund every couple of years or when: 

• You get a pay rise or change jobs
• You start planning to buy a home
• You buy a home or increase your mortgage 
• Your approaching retirement or plan to reduce your hours 
• You receive a lump sum or change your investment goals 

For example, if you’re in your 30’s or 40’s with no plan to withdraw your KiwiSaver for another 20-years, a growth or aggressive fund could help maximise your returns. But if you are getting close to buying your first home or if you’re in your late 50’s and want to reduce risk, shifting to a balanced or conservative fund may be more suitable. 

Other considerations

While fund choice is important, it’s just one piece of the puzzle. When considering what KiwiSaver you should also review, Fund type is just one piece of the puzzle. You should also review:

• Fees: Some providers charge significantly more than others for similar funds. High fees without high performance can eat into your returns over time. 
• Fund performance: While past performance is not a guarantee of future returns, consistent underperformance relative to similar funds may be a red flag. 
• Contribution rate: Could you afford to increase your contributions to build your savings faster? 
• Provider services: Are you getting clear communication, good digital tools and support when you need it? 
• Ethical alignment: Some professionals want to know their fund reflects their values. Ethical or sustainable KiwiSaver options can offer strong returns while aligning with personal beliefs.

Here to help

At Threefold, we’re here to help you make smart KiwiSaver decisions. If it’s been more than a year since you last looked at your KiwiSaver, or if you’ve had a change in circumstances, now is a great time to check-in and book a free review. 

We’ll help you assess whether your current fund type and provider still match your goals and guide you through any changes if needed. 

Plus, if you book a review this month you will also go in the draw to win a month’s free mortgage repayments on us! Click here to book your free review.

We also have a great new tool on our website that will help you assess your risk profile. To check yours, click here.

The content of this article should not be taken as financial advice, or a recommendation of any financial product. These insights are based on industry knowledge and our personal opinion. Threefold is not liable or responsible for any information, omissions, or errors present.