In this Q&A with a webinar audience, we covered everything from KiwiSaver vs managed funds to investing, mortgages, debt, and protecting your wealth - practical insights to help you get ahead in 2025.
KiwiSaver vs Managed Funds: Finding the Right Balance
One of the biggest questions was whether it’s better to prioritise KiwiSaver contributions or put money into managed funds. The answer depends on your situation:
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KiwiSaver is a great ‘forced savings’ tool, especially if you’re not naturally disciplined with money. Contributions are automatic and hard to access, which makes it effective for retirement or a first-home deposit.
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Managed funds offer more flexibility. You can invest for the medium- or long-term and withdraw money if your plans change, but this requires more discipline to stay consistent.
If you’re planning to buy your first home within three years, it’s crucial to keep your KiwiSaver in a cash fund. That way, your deposit won’t be eroded by sudden market dips
Investing Basics: Shares and Market Timing
The Q&A also covered investing fundamentals. The advice was clear: avoid trying to “time the market” or picking individual companies unless you’re prepared to do serious research.
Instead, stick to diversified funds that spread risk across different asset classes. The right time to start investing? Yesterday. The next best time is today. But remember: if you have short-term debt like credit cards, pay those off first – their high interest rates will outpace any investment returns.
Debt vs Investment Decisions
Audience questions also dug into whether to invest while holding debt. The rule of thumb was:
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Clear short-term debt first (e.g. credit cards).
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Focus on your mortgage next, especially the portion on your own home (as investment property debt is tax-deductible).
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Only then should you start investing seriously.
This sequence ensures you’re not trying to outpace high interest costs with risky investments.
Mortgages & Repayments: Smarter Strategies
Home loans were another hot topic. Key points included:
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Paying an extra $100 a week on an $800,000 mortgage can cut a lot of time off the loan term.
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Avoid locking into shorter loan terms (e.g. 25 instead of 30 years), as this removes flexibility if your income drops.
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If interest rates fall but you keep repayments at the higher level, you could save hundreds of thousands in interest over the life of the loan.
Offsetting & Body Corps: Hidden Pitfalls
Offset mortgage accounts can be useful if you’ve got savings, as they reduce the interest charged on your loan. But they work best for people who are disciplined – otherwise, it’s easy to spend what should go on debt repayment.
Body corp fees were another area of concern. While sometimes unavoidable with apartments, fees can be steep (tens of thousands per year in some cities) and unexpected costs may be shared by all owners. This makes body corp properties a risky choice for many buyers.
Protecting Your Wealth: Wills & Savings Habits
Protecting assets is just as important as growing them. Advice included:
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Savings accounts: keep them at a different bank to your everyday account to avoid the temptation to dip into them.
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Wills: even if you don’t own property, a will is essential. With KiwiSaver and savings balances, it’s vital to decide who inherits your money – otherwise, it could be tied up or even end up with the government.
Key Takeaways
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KiwiSaver vs managed funds comes down to flexibility vs discipline.
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Keep short-term home deposits in cash funds to protect against market dips.
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Pay off short-term debt first, then mortgages, before investing.
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Small extra mortgage repayments can save you years and hundreds of thousands in interest.
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Be wary of body corp fees – they can be much higher than expected.
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Set up an offset account only if you’re disciplined with money.
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Always have a will, even without property – savings and KiwiSaver still matter.
Next Steps
If you’re unsure whether your KiwiSaver is in the right fund – or how it fits alongside your wider financial goals – our KiwiSaver advisers can help. We’ll review your current fund, make sure it matches your timeframes and risk profile, and give you clear guidance on the best way forward.
If you’d like to learn more, check out these other episodes below.
For a no obligation discussion to see how we can help you on the path to wealth, please contact us.
Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
