Anisha is 25 years old and earns $50,000 a year (before tax). She contributes 3% of her salary to her KiwiSaver account, and her employer also makes a contribution of 3% of her salary. Every year she receives the annual Government contribution.
She’s not sure what fund to choose, so she selects the Lifetimes option. She likes the fact that her KiwiSaver savings will move from fund to fund automatically as she gets older, which means her savings will always be invested in a fund that has an appropriate risk/return profile for her age. With 40 years to go before retirement age, she wants to make the best use of that time to grow her savings.
Choosing the Lifetimes option is not only simpler, it could make a big difference to the amount Anisha has in her KiwiSaver account when she’s 65. In fact, as the illustration below shows, she could be around $88,000 better off in our Lifetimes option than in our Conservative Fund. That’s a difference worth having!