Can KiwiSaver members handle a long investment downturn?
A longer downturn in investment markets may prompt some KiwiSaver members to reassess their retirement savings strategy, experts say. Advisers warn that selling out of panic during a slump can permanently damage long-term returns.
Millions of New Zealanders enrolled in the country's KiwiSaver retirement savings scheme face uncertainty over how to manage their strategy amid a prolonged global market downturn. Financial advisers say the biggest mistake in such periods is switching funds out of panic.
Experts note that members who shift into more conservative funds to avoid short-term losses risk missing out on gains when markets eventually recover. Advisers particularly recommend that younger members, with decades until retirement, stay in growth-oriented funds despite near-term volatility.
New Zealand's Retirement Commission advises members to seek independent financial advice before changing strategy, since the cost of a panic decision can take years to recover from.
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