KiwiSaver: We all know the benefits of it and why we should sign up to a KiwiSaver scheme but when we get to the stage of deciding things such as which provider to choose, why does it feel so overwhelming?
If you are new to KiwiSaver and register your interest, you are often bombarded with large, informative guides that are up to 30 pages long.
While KiwiSaver is great, how many of you have someone approach you to explain the whole process as well as the potential schemes that might be right for you?
For those who have been a part of KiwiSaver for some time now, are you still on the default scheme?
In this blog post, we’re going to give you three essential tips for choosing a KiwiSaver provider and some advice for optimal fund selection.
Make sure to try our KiwiSaver Performance Comparison tool as well.
How to choose a KiwiSaver provider: set clear objectives
What do you want to achieve with KiwiSaver? Do you want to generate savings for retirement or do you want to save towards a deposit for your first home?
People have different needs when it comes to their life savings. Maybe you want to just make the minimum contribution and leave it as-is.
This is completely fine too. As long as you set yourself clear objectives about what you want to get out from KiwiSaver, this will make deciding which provider and scheme to go with much easier.
Choosing a KiwiSaver provider: compare member services
KiwiSaver Support is one aspect of choosing a KiwiSaver provider that is often overlooked.
View each KiwiSaver provider’s website to see the type of membership support they provide.
What initial investment advice do you get and will they provide ongoing advice when you need it? Things such as face-to-face services are also beneficial, especially if you want someone to review your results and provide recommendations for improving fund performance.
How to choose a KiwiSaver provider: compare funds!
At the end of the day, KiwiSaver is an investment. As with any investment, you need to spend time carefully considering your choices, and nurturing your funds so you can maximise your potential returns.
Doing a bit of research into the types of funds available is the first step to investment success.
Commonly, there can be five types of funds available, based on the level of risk you are willing to accept.
The problem with KiwiSaver funds is that all providers use different naming conventions, which is where the confusion can occur.
If we just focus on the standardised Risk Profile Level, funds are often classified as the following:
- Low Risk
- Low-to-medium risk
- Medium risk
- Medium-to-high risk
- High Risk
A KiwiSaver fund that has higher risk allows you to potentially increase your long-term growth. Make sure you compare KiwiSaver funds and assess the level of risk you are willing to take.