The right scheme will depend on how close you are to retirement and how much risk you want to take. Check out our risk quiz.
A You'll be allocated a default scheme only if neither you nor your employer has chosen your own preferred scheme.
Investment basics
Types of investment
Some KiwiSaver schemes will play it safe to protect your capital. They'll keep most of your funds in bank deposits or other cash assets that are relatively secure but won't grow very quickly. Other schemes will take a few more risks with the aim of increasing long-term growth.
There are five types of KiwiSaver schemes:
- Cash funds are low risk and may be a wise option if you're planning to retire in the next few years - but don't expect high growth.
- Conservative funds are a low-to-medium risk option. The KiwiSaver default schemesA are conservative funds. Usually, about 80% of the fund is in lower risk investments, and about 20% in shares and property.
- Balanced funds are split 50-50 between higher risk investments such as shares and property, and lower risk investments including cash and fixed investments. This is a medium risk option.
- Growth funds are usually about 80% shares and property, and 20% lower risk investments such as cash and fixed interest. This is a medium-high risk option.
- Aggressive funds are invested mainly in shares and/or property with the aim of achieving high growth over a longer timeframe. This is the highest risk option.
The type of investment you choose will depend on how close you are to retirement, and how much risk you want to and can afford to take. Take our risk quiz to find out what type of investor you are.
Important
Like you, we can't predict the future - which means we can't guarantee the performance of any savings scheme. Nor do we endorse any specific KiwiSaver provider or scheme. ConsumerSaver is a good starting point - but, before you commit, we strongly suggest you seek independent financial advice. See our full disclaimer.
