For those planning to buy a house soon, consider switching to a conservative KiwiSaver fund like Simplicity's to minimize risk. Evaluate fees and tax implications, and seek advice from a financial advisor for a tailored strategy.
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“I’m currently with Simplicity on a High Growth Fund which I realised yesterday may not be the smartest financial decision. Reading similar topics it seems the general consensus is to change to a conservative fund if you need your KiwiSaver in the next few years. So in saying this, I’ve highly considering switching my fund to Simplicity’s Conservative or Defensive fund. Any opinions on this would be much appreciated!”
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If you’re planning to purchase a house within the next year, it’s crucial to ensure your KiwiSaver fund choice aligns with this short-term financial goal. A prudent step to consider is shifting to a more conservative fund, like Simplicity’s Conservative or Defensive fund, designed to have lower risk and volatility. This can help safeguard your savings as your house purchase date approaches.
It’s also wise to assess the fees associated with your KiwiSaver fund options. Generally, conservative funds tend to have lower costs compared to high-growth ones. Minimizing costs is essential as it allows you to retain a significant portion of your investment returns. Consider potential tax implications when switching funds, primarily if you haven’t held your current fund for an extended period.
Before making a decision that best suits your unique financial circumstances, it’s advisable to seek professional advice from a financial advisor. They can provide personalised guidance and ensure your choice aligns with your financial objectives.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
