07 Jun 2024
In the busyness of life, it can be easy to relegate your long-term KiwiSaver savings to the backburner. But remember, an annual KiwiSaver review can help you shape your financial future. Here’s why.
Your goals are changing
You may not realise it, but if you think about it, your life is in constant motion and so are your goals. For example, many people join KiwiSaver to boost their first-home deposit, but later in life their main goal becomes building a sizeable nest egg for retirement costs.
By revisiting your KiwiSaver plan annually, you can ensure that your contributions and the fund type you’re invested in mirror this journey.
Your income may change
Income is rarely static. Career advancements may lead to promotions and pay raises, or there might be periods of reduced earnings due to personal choices or unforeseen circumstances. Whatever happens, you may need to recalibrate your KiwiSaver plan, and an annual review can help you do just that.
Your risk tolerance evolves over time
If you’re a young professional, you might be comfortable with a more aggressive growth fund which has higher (potential) risks but also (potentially) higher returns. On the other hand, someone approaching retirement may prefer a lower-risk approach to protect their savings from volatility – even if that means achieving lower longer-term returns. Once again, an annual review can help ensure that your risk profile is aligned with your KiwiSaver fund choice.
Something important may have happened
Life is a series of milestones. Be it tying the knot, welcoming a child into the world, or buying your first home – every significant event can influence your forward planning. By considering these life changes in your KiwiSaver review, you can adjust your savings strategy accordingly.
You may want to know how your KiwiSaver plan is doing
While past performance is never a guarantee of future returns, it can still be a good idea to check how your KiwiSaver fund has been performing in the past five years. If your KiwiSaver fund has consistently outperformed or at least matched its benchmark index, for example, it suggests a level of stability. And this could reflect on the fund’s resilience and the expertise of the fund managers in navigating volatile markets.
It’s important to check fees and costs
All funds come with operational fees, and while they may seem small, over time they can reduce your overall returns. Annual reviews provide an opportunity to take a closer look at these charges. Are you getting value for your money? Does the performance and returns justify the fees?
Get in touch: we’re here to help
Like to review your KiwiSaver plan? Don’t hesitate to contact us. As financial advisers, we can help you ensure that your KiwiSaver strategy remains aligned with your goals and needs, year after year.