Disclaimer:
The information on this website is for general guidance only and does not constitute financial or investment advice. Always do your own research and seek personalised advice from a qualified financial adviser or mortgage adviser before making financial decisions. All investments carry risk and past performance is not indicative of future results.
Key Takeaways
- Match fund risk to your home-buying timeline.
- Growth funds suit long-term saving horizons.
- Conservative funds protect balances close to buying.
- Switching funds can reduce volatility risk.
- Seek adviser guidance for personal fit.
Choosing the right KiwiSaver fund is an important decision - especially if you're planning to use your savings for a first home withdrawal.
The right fund should align with your time frame to buy a house - are you buying within the year, or are you still in saving mode? - and your risk tolerance - how much fluctuation could you handle? Keep reading to find out more.
Accelerating Towards Your Goal with Growth Funds
If home ownership is part of your long-term plan (7-10 years away) and you're focused on saving, a growth fund might be a suitable choice to maximize your investment.
Growth Funds: Are designed to increase your KiwiSaver balance by investing in assets with higher return potential over the long term. While they offer significant growth opportunities if you have time before purchasing your home, they also come with greater risk due to their sensitivity to short-term market fluctuations.
Balancing Caution with Conservative KiwiSaver Funds
Meanwhile, if you're getting ready to make an offer and are spending your weekends attending open homes, a conservative or defensive KiwiSaver fund is likely a much smarter option.
Conservative Funds: Are generally better at protecting your balance from market fluctuations, offering a steady base for your savings. This stability becomes crucial when you're gearing up to withdraw your KiwiSaver savings for your first home.
Learn More: How Market Volatility Can Hurt First Home Buyers Using KiwiSaver
Need personalised guidance?
Chat with a First Home Buyers Club affiliated mortgage adviser - no obligation!
Tailoring Risk to Your Home-Buying Timeline
The key difference between growth and conservative/defensive funds lies in risk! If you have plenty of time before buying your first home, a growth fund could be a good option to maximize your returns and build up your balance. On the other hand, if you're planning to buy soon, a conservative/defensive fund might be safer, protecting your KiwiSaver savings from market fluctuations.
| Timeline | Recommended Fund | Why |
|---|---|---|
| 7-10+ years away | Growth Fund | Maximize returns over time; market dips have time to recover |
| 3-7 years away | Balanced Fund | Mix of growth and protection; moderate risk |
| 1-3 years away | Conservative Fund | Protect your balance; minimize risk of sudden drops |
| Within 12 months | Defensive/Cash Fund | Maximum protection; preserve capital for withdrawal |
It's Common Practice to Turn to the Experts for Guidance!
Figuring out which KiwiSaver fund to go with can be unique to you. Chatting with a KiwiSaver adviser might help you match your fund with your own financial situation and home-buying dreams.
Picking a KiwiSaver fund type is a big part of planning your finances. It's all about what feels right for you, considering how much risk you're okay with, when you want to buy, and what you're aiming for. Whether you're up for the bigger ups and downs with a growth fund or prefer the smoother ride of a conservative fund, this choice lays the foundation for the financial road that leads to your new front door.
Sponsored by Generate
This article is sponsored by award-winning KiwiSaver provider, Generate. Talk to your KiwiSaver provider about the best fund option for your situation.
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