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Leverage up your KiwiSaver fund

Booster chief investment officer David Beattie says people should be taking more risk in their KiwiSaver funds.

Monday, October 16th 2017, 6:00AM 1 Comment

New Zealanders need to realise that 65 is too young to give up risky investments, says David Beattie, chief investment officer of KiwiSaver provider Booster.

He said a lot of life-stages products, while well-intentioned, worked to wind down investors’ risk as they hit 65, assuming that people would take their money out and put it in the bank.

“There is an element of that happening,” Beattie said, “although balances are obviously small. We want to make sure going forward that as balances increase, people don’t keep thinking like that.”

He said most people at 65 would still have at least 20 years of life ahead of them.

Under normal circumstances, a young person who went into a financial adviser’s office and said they had a 20-year investing horizon would be told to invest completely in equities.

“Don’t start derisking just because you’re hitting the magical age of 65,” Beattie said. “It’s way too early. All that gives you is a bit of freedom and flexibility. But taking money out at that point and doing something suboptimal with it is one of the worst things you can do.”

He said young savers should take even more risk, and opt for geared equity products, if they were not saving for a first home.

To read the full transcript, click here

Tags: Booster GRTV KiwiSaver

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Comments from our readers

On 16 October 2017 at 10:29 am RanDerson said:
I liked the idea and I was in Booster's geared growth KiwiSaver. But its fees are 3x more than comparable funds, yet the returns are comparable to similar aggressive funds. Why bother?

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