{"id":47881,"date":"2024-10-22T20:11:29","date_gmt":"2024-10-22T07:11:29","guid":{"rendered":"https:\/\/milfordasset.com\/?p=47881"},"modified":"2025-09-18T20:18:51","modified_gmt":"2025-09-18T08:18:51","slug":"kiwis-urged-to-reassess-kiwisaver-after-record-first-home-withdrawals","status":"publish","type":"post","link":"https:\/\/milfordasset.com\/insights\/kiwis-urged-to-reassess-kiwisaver-after-record-first-home-withdrawals","title":{"rendered":"Kiwis urged to reassess KiwiSaver after record first home withdrawals"},"content":{"rendered":"

This article was first published in NZ Herald<\/a><\/sup><\/p>\n

Expert advises a fund review after buying your first home.<\/strong><\/p>\n

Last year, more than 35,000 Kiwis withdrew a record $1.24 billion from KiwiSaver to buy their first home, according to the Financial Markets Authority (FMA). However, many may be losing out on tens of thousands in retirement savings by not adjusting their KiwiSaver fund post-purchase.<\/p>\n

Milford senior KiwiSaver financial adviser Liam Robertson warns neglecting to reassess your KiwiSaver fund setting could cost you up to $93,000 in retirement*. \u201cMany people think switching funds is more difficult or time-consuming than it actually is,\u201d he says. \u201cThey make that first home withdrawal, they forget about their KiwiSaver, and they don\u2019t move their KiwiSaver fund to a more aggressively styled option where that is appropriate.\u201d<\/p>\n

\u2018You can\u2019t eat your home. It won\u2019t pay your bills\u2019<\/strong><\/p>\n

The FMA\u2019s 2024 report shows positive trends for KiwiSaver members. Total funds in the scheme as at March 31 reached $111.8 billion, up 19.3% from the previous year, marking the strongest growth since 2021. Investment returns were strong with $13.1 billion in gains, close to the record high of $13.2 billion in 2021.<\/p>\n

Contributions increased to $11.2 billion, with members accounting for $6.9 billion of that rise, indicating greater engagement. Under 35s are contributing more regularly, indicating growing awareness of the importance of long-term saving to help fund retirement. However, many are still in conservative funds, which could limit growth in the value of their KiwiSaver over time.<\/p>\n

\u201cKiwiSaver isn\u2019t just for fun at 65, it\u2019s a source of income,\u201d Robertson explains. \u201cPeople often think that contributing 3% is enough because that\u2019s the minimum contribution level, but they\u2019re shocked when they see the numbers. You can\u2019t eat your home. It won\u2019t pay your bills.\u201d<\/p>\n

KiwiSaver funds generally fall into three main categories: conservative, balanced, and growth. Conservative funds, which focus on preserving capital and with investment typically directed to bonds and cash, are considered lower-risk and ideal for short-term savings. These funds, however, tend to offer lower returns over time. Balanced funds mix growth potential with moderate security, while growth funds, which invest heavily in shares, carry more risk but typically provide higher long-term returns for those with a longer savings timeframe.<\/p>\n

Key steps for members following first home purchase<\/strong><\/p>\n