7 March 18
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.