What makes up your KiwiSaver?
Understanding how KiwiSaver works doesn't have to be complicated. Here we outline what's inside your KiwiSaver fund and why it should change over time.
No matter your KiwiSaver provider, your KiwiSaver fund will be made up of a mix of investments. The mix will vary depending on your type of fund and should change over time as your goals do as well.
We break it all down in the video below:
Handy tip: If you are using KiwiSaver to save for a first home, you should double check your fund type. The balance of growth funds can quickly change potentially leaving you with less than you need when you're ready to buy.
A KiwiSaver fund usually consists of different types of investments including:
Each fund has a different mix of these investments and most KiwiSaver providers offer a number of mixes (e.g. Growth, Balanced and Conservative funds).
As you get older, or if things change, so should the mix of your KiwiSaver.
Did you know? Most KiwiSaver providers will buy shares from companies across the world. Your KiwiSaver fund could have shares in anything from Tesla to Spark. What shares and how many they buy of each depends on your provider and fund type.
Similar to a personal savings account, KiwiSaver providers put a portion of cash into a savings or transactional account that earns interest.
Cash is a low-risk investment and as you get older, you want more of your KiwiSaver invested in it.
Shares are a piece of a company. As they make money, you get some of the profits. To reduce the risk, your KiwiSaver provider buys shares in multiple companies (known as diversification).
Shares have the highest risk when investing but also generally the highest returns. If you're 10+ years away from retirement, or not using KiwiSaver for a first home, most of your KiwiSaver should be invested in shares.
A cash investment as well. The difference is that cash is invested in a bank or company for a set period of time, and then returned with interest at the end of the period.
Like cash, these are lower-risk investments that you want more of your KiwiSaver invested in as you get older.
Now you know what's in a KiwiSaver fund, it's time to check you're in the right fund for your stage of life.
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