Am I too old to be more aggressive? - Ask Susan
RNZ's money correspondent answers your questions.
The question posed was whether someone over the age of 46 is too old to switch to an aggressive investment strategy within their KiwiSaver account. In general, this would not be considered an issue as the decision depends largely on personal risk tolerance and the investment timeframe. Aggressive funds are known for being more volatile due to a higher exposure to growth assets, meaning they may fluctuate significantly and potentially lose up to 30 percent of their value in a year.
However, over the long term, investments with higher risk typically yield better returns. According to Morningstar data, aggressive funds have managed an average annual return of 10.3 percent over the past decade, outperforming other KiwiSaver options. It was noted that even if an individual were older than 46, it could still be viable to remain in an aggressive fund as long as they have at least 10 to 15 years remaining in the investment.
Even after reaching 65, one is not obligated to withdraw all funds from KiwiSaver, and maintaining some exposure to growth assets could still be beneficial for continued growth.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
