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Q.        I am 61, still working and contributing to the Gareth Morgan KiwiSaver fund (now called Kiwi Wealth, I think). My husband is 65 and is in the same fund. He is currently self-employed and no longer contributing to his fund, therefore it is just sitting gaining a small amount of interest (we hope!).  What should we do now with his fund in order to keep the money safe and incurring good interest? I only work part-time so we don't have a big income.
 
A.         You haven’t given me the most important information, and that is which fund is your husband in? The Kiwi Wealth range includes Cash, CashPlus, Conservative, Balanced and Growth – they cater for the full spectrum of investors from defensive/short term through to aggressive/long term. 
 
You are not alone in believing that being able to name the fund manager behind your Scheme is enough to decide its merits or suitability for you. In fact, some investors do not know which fund manager looks after their KiwiSaver nest egg at all, or think it is all lumped together in a big Government-controlled fund like the NZ Superannuation Fund. In fact there are dozens of KiwiSaver managers and over 200 funds to choose from. 
 
Gareth Morgan sold his business to KiwiBank just over two years ago. According to the company, “When we became part of the New Zealand Post Group and a related company of KiwiBank, Gareth mentioned that he would like his name back at some point.” That point arrived on April 1, 2014 with the change of name from Gareth Morgan KiwiSaver Scheme to the Kiwi Wealth KiwiSaver Scheme.   (Yes, it sounds like they ran out of ideas in the name-changing department.)
 
You use the word ‘interest’ in relation to the returns you are getting. Unless your husband is in the Cash fund, his returns will be generated by more than just interest. The other four Kiwi Wealth funds are invested in other asset classes besides Cash. The value of bonds and/or shares will go up and down and there will be income from dividends. You can find out what return the fund has achieved in the past, but you will not know what return he will get in the future. Your fund manager should achieve returns within a specified range depending on the type of fund.  
 
As you are both still working your investment timeframe may be more than 5 years. This widens the options for you. The Kiwi Wealth website is very well laid out and easy to navigate, so that should be your first port of call. You can find out the make-up of your funds, and whether they are appropriate to you.  They provide a rough guideline suggesting their Cash Fund is suitable for investors who would like to withdraw their funds within 12 months; CashPlus for those with fewer than 3 years to go; Conservative for up to 5 years; Balanced for 5 to 10 years and Growth for more than 10 years.  
 
This is a good guideline for investors and should remind older investors that that Growth all fund that they have been invested in for the past few years may not suit their needs for much longer. There are a few fund managers that offer a ‘Life Stages’ Scheme which automatically reduces the weighting to growth as the investor gets older. 
 
As your husband is over 65 he can withdraw funds from his KiwiSaver anytime, but if he does not need the money there is no reason why he shouldn’t continue with it for a few more years.
 
 
Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 870 3838. The information contained in this article is of a general nature and is not personalised. Send your KiwiSaver questions to shelley.hanna@peak.net.nz