Please note that we are in the process of transitioning the Aon KiwiSaver Scheme to Fisher Funds and we are unable to process any switches between funds at this time.
How Target Date funds work
Simply choose the Target Date fund with the year (2025, 2035, 2045 or 2055) nearest your planned retirement date, and the target investment mix of the fund automatically adjusts to become more conservative (with more income assets, and less growth assets) as you get older. This means your money will gradually be moved from growth assets (with higher risk but potentially higher returns) when you’re younger, to income assets (generally with lower risk but lower expected returns) as you get closer to your retirement date. While it may appear as a set and forget option, it is important to review your choice of fund at least annually and especially if your circumstances change.
You can see how this works in the diagram above, using the Target Date 2045 fund as an example. In March 2021 the fund had a target investment mix of 67% growth assets (Australasian and international shares) and 33% income assets (New Zealand and international fixed interest). By 2045 the target investment mix will have changed to 20% growth assets and 80% income assets, aiming to reduce the risk of investment losses as you get closer to your retirement.
Why invest in a Target Date fund?
The Russell LifePoints® Target Date funds could suit if you:
- want a simple set and forget option, with the target investment mix changing automatically over time
- have a reasonable idea of when you plan to retire
- want to reduce the risk of investment losses as you age
- want your KiwiSaver account invested in one fund
What about when you reach 65? You don’t necessarily need to withdraw your KiwiSaver money. You can leave it invested in the Target Date fund you have chosen and make regular withdrawals, providing you with a steady stream of income to live off (until you have used up your KiwiSaver account).
Aon KiwiSaver Scheme currently offers four Target Date funds.
Target investment mix and ages current as at March 2021.
If you’d like to learn more about our different Target Date funds you can find more information here.