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7 March 18
Reading time: 4 minutes
Posted by Tom Hartmann in KiwiSaver 5 Comments
The sharemarket is going up and down again; in other words, it’s back to normal. But seeing your KiwiSaver balance go down for the first time in a while can be downright unnerving.
It’s important to not panic and jump ship, especially if the boat is just riding a wave down and will eventually sail up again. Once you bail, you miss out on the eventual recovery.
If you’ve been contemplating a switch for other reasons, here are some considerations.
It’s easy to switch between KiwiSaver options, and there are two ways to do it. You can either move to an entirely different KiwiSaver provider altogether and pick one of the funds they offer, or you can stay with the same provider and change to one of their other KiwiSaver funds.
Either way, one of the best ways to compare all your options in the market, or even just those your provider offers, is by using Sorted’s KiwiSaver fund finder.
These may be good reasons to move to a new KiwiSaver provider:
On the other hand, these may be bad reasons to jump ship:
Always check whether the new provider’s fees, services and investment options suit you as well as your current scheme does.
If you do decide to change KiwiSaver providers, simply complete a membership form for the new one. They will tell Inland Revenue and arrange for your funds to be transferred, which typically takes between 10 and 35 days.
Some providers charge a transfer fee to move out of their scheme: Aon ($35) and Booster ($30).
Stick with the same provider, but choose a different fund – here are some good reasons to head down this route:
Keep in mind that some KiwiSaver providers let you invest in more than one of their funds, so you could spread your contributions across multiple funds with different risk levels. But by doing this you are creating your own asset mix between funds, and it may be simpler to just find a fund that already has a mix that’s right for you without doing the blending yourself.
The other thing to remember is that some providers have “life stages” options that adjust your investment mix automatically as you age, either by altering the fund you’re in or distributing your money between funds of various risk levels.
The point is, switching isn’t always the best choice, but for many it can be just the thing. Before you do, though, have a think first.
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Comments (5)
Shar
1:48pm | 23 Jun 2022
We are taking a huge risk, even if we are wanting to change providers, already giving the gloom about that. Let just say we cut our loss. We have been bullied into the saving scheme, that you and I know will never see the end result. 20 years of KiwiSaver and just under $18 000? I haven't seen it go past $18,500 in 2 years... a real insult to my hard working life.
Michael
9:10pm | 26 Jan 2022
I'm over 65 and I want to change providers but a bank person said that if I did I couldn't touch my funds for 5 years? That doesn't sound right to me. Is there a stand down period when switching?
Helen
1:36pm | 7 Oct 2019
This paragraph appears in both "good reasons" and "bad reasons" to switch:
If you’ve read that another of your provider’s funds has been making higher returns than your current fund. Again, the returns are like waves: they don’t typically stay still, and you could be chasing something that’s already gone.
1:03pm | 2 Jun 2019
Why is money always dropping. One day you look at your balance then boom few hundred goes maybe $2000 a year
Sharon
3:33pm | 22 Jan 2019
I'm 64 and am getting freaked out by losses. I don't want my balance to go up by less than I am putting in. I have been thinking bout going with a safe option rather than a mixed risk/return. Needing some advice really as I' undecided.
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