Understand Your KiwiSaver

A recent survey done by the Financial Markets Authority (FMA) for Money Week shows that we still have a lot to learn about KiwiSaver. Around 17% of people who took the survey didn’t appear to understand that funds with a higher exposure to property and shares have more ups and downs that cash and bond funds and around 25% of people seemed to be unaware of the risk of cash and bond funds dropping in value. KiwiSaver was introduced eleven years ago and those people who have been contributing since then have substantial balances now. This means they are at risk of making poor decisions about how their KiwiSaver funds are invested which could have a significant impact on how much money they have in retirement.

Most KiwiSaver providers have a range of diversified investment options from Conservative through to Aggressive or High Growth. Underlying all of these options is a range of specific funds covering at least the main investment categories of cash, bonds, property and shares. Generally, the same specific funds underpin all diversified options and it is the weighting towards each specific fund that differs.

The Sorted website has a tool which allows you to compare KiwiSaver funds in terms of the range of investment options and the providers offering each option. For the last five years, Conservative funds have on average given a 4.65% return while Aggressive funds have had a 9.58% return. If you invested $100,000 now for twenty years, you would have $248,000 if it was invested at 4.65% compounded and $623,000 if it was invested at 9.58%. However, Aggressive funds will go up and down a lot more in the short term. The longer your investment time frame, the more aggressive you can be and the more you will have for your retirement.

Liz Koh

Liz Koh

Liz Koh is an Authorised Financial Adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847.  For free eBooks, go to and