Start the decade strong with these useful tips from Kiwi Wealth.
Here’s why the start of the decade is the perfect time for Kiwis to think about their investments
Like us, you’ve probably got a few resolutions ready for the new year. Whilst Kiwi Wealth can’t help too much with the health and exercise related ones, your investments are another story.
Joe Bishop, Kiwi Wealth General Manager Customer, Product and Innovation says that with a new decade, it’s a great time for Kiwis to review both their KiwiSaver funds as well as consider other investment options.
“KiwiSaver is an investment, and like any investment, people need to take a look at how it’s progressing and what changes they can make to get maximum value.”
“Fortunately, some of the most important things Kiwis can do don’t require a lot of time or effort, just a little bit of understanding.”
Here are Kiwi Wealth’s top four financial tips for 2020:
1. Make sure you’re in the right KiwiSaver fund for you
Investments should never be set and forget. As your circumstances change, so should your KiwiSaver.
“As a general rule, younger KiwiSaver members should opt for growth funds, while those closer to retirement age might look to manage or reduce their risk with more conservative options”, says Mr Bishop.
2. Check your KiwiSaver contribution rate
2019 introduced new rates to which you can contribute your salary towards KiwiSaver. You can now choose from 3%, 4%, 6%, 8% and 10% of your salary. Adjusting by a single percentage could make tens of thousands of dollars in difference over your working career.
“If the kids have left home, or the mortgage is getting smaller – using some of that surplus to invest in your KiwiSaver can really pay rewards by the time you make it to retirement”, says Mr Bishop.
3. Make a plan to save for your life goals
Savings accounts and term deposits are not the only way to achieve your financial goals. Whether it's working towards a holiday, house deposit, new car or even your kids' education, a Kiwi Wealth Managed fund offers another way to save.
"It's worth reviewing your options when saving towards those important life goals. If you have a longer investment time frame then a managed fund could be an alternative", says Mr Bishop.
4. Keep an eye on performance, and remember it’s a long game
Investments such as KiwiSaver and Managed Funds are subject to market trends – both up and down. When either is happening, there’s usually a lot of noise in all directions from commentators.
“What’s most important is to not panic or make rash decisions. Investment managers are always looking to manage risk and maximise returns given the conditions. Often ups and downs in the market can represent opportunities, so staying the course may deliver rewards in the long term”, says Mr Bishop.