KiwiSaver: Growth vs Conservative – Which One Should You Pick?
What Are These Fund Types?
When you sign up for KiwiSaver, you need to choose how your money is invested. The two most common types are growth funds and conservative funds. Each one has its pros and cons, depending on your age, goals, and how comfortable you are with risk.
What's a Growth Fund?
A growth fund puts most of your money (around 70% or more) into shares – like pieces of companies. These can grow a lot over time, but they can also go up and down quickly. This fund is great if you're investing for the long term and can handle the ups and downs.
What's a Conservative Fund?
A conservative fund plays it safe. Most of your money (80–90%) goes into more stable things like bonds and cash. These don’t grow as fast as shares, but they don’t drop in value as much either. It's better for people who don’t want to take too much risk.
Quick Comparison
| Feature | Growth Fund | Conservative Fund |
|---|---|---|
| Risk Level(volatility) | Higher risk(more ups and downs) | Lower risk(more stable) |
| Average Return(10 years) | About 7–9% per year | About 2.5–4% per year |
| Good For | People in their 20s–40s with time to grow | People close to retirement or who want low risk |
How Much Could Your KiwiSaver Grow?
Let’s say you’re 30 years old, earning $70,000 a year, and contributing 6% to KiwiSaver. Here’s how much you might have by age 65 depending on the fund type:
So, Which Fund Is Right for You?
If you're young and won't need your KiwiSaver for decades, a growth fund could give you better results. But if you're getting closer to retirement or don’t like seeing your balance drop when markets go down, a conservative fund might be safer.
What If You’re Not Sure?
You don’t have to go all-in on one or the other. There are balanced or lifecycle funds that mix both styles and adjust as you get older. These are good if you want a "set and forget" approach.
FAQs – Quick Answers
- Can I change my fund type? Yes! You can switch anytime. But don’t switch too often just because the market is up or down.
- Will a growth fund always make more? Not always. It can drop during bad times. But over many years, it usually grows more than conservative funds.
- I’m in my 40s or 50s. What should I do? A balanced fund might be a good middle-ground option.
There’s no one-size-fits-all answer. The best KiwiSaver fund is the one that fits your life, your comfort level, and your future plans. It’s a good idea to review your fund every couple of years to make sure it still matches your needs.
Also check out:
- What Is KiwiSaver? A Complete Guide to New Zealand’s Retirement Savings Scheme
- Which KiwiSaver Fund Type Should I Choose? (Made Simple)
- Top 5 KiwiSaver Funds in NZ for 2025: Easy Comparison
Kiwi Money Matters is written and maintained by a New Zealand-based writer with hands-on experience in finance and accounting since 2015.
All posts are personally researched, written to ensure clarity and trustworthiness for everyday Kiwis.
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