A lifecycle KiwiSaver fund — also called a lifestages fund or age-based fund — automatically adjusts its asset allocation as you get older. Instead of choosing a fund type and manually switching over time, the fund does the de-risking for you. Here’s how they work, who offers them in NZ, and whether they’re the right choice.
How Lifecycle Funds Work
A traditional KiwiSaver member chooses a fund type (conservative, balanced, growth) and must actively decide when to change it. Most people don’t — they stay in whatever fund they started in, regardless of age.
A lifecycle fund solves this by embedding the de-risking process into the fund itself:
- In your 20s and 30s: the fund holds mostly growth assets (shares) — high risk, high return potential
- In your 40s and 50s: the fund gradually shifts toward balanced — reducing volatility
- Approaching 65: the fund holds mostly income assets (bonds, cash) — capital preservation
The shift happens automatically, without you needing to request a change or even think about it.
Who Offers Lifecycle / Lifestages Funds in NZ?
Lifecycle-style funds are available from a handful of NZ KiwiSaver providers:
Westpac Lifestages
Westpac’s KiwiSaver scheme uses a lifestages model. Members are placed in a fund based on their age, and the fund type shifts automatically over time. The transition periods are:
| Age | Fund type |
|---|---|
| Under 45 | Growth |
| 45–54 | Balanced |
| 55–64 | Conservative |
| 65+ | Cash/income |
ANZ Lifetimes Option
ANZ offers a “Lifetimes” investment option that adjusts the portfolio glide path based on your age — starting aggressive and gradually becoming more conservative toward 65.
ASB and other providers
Some other providers offer similar options; check with your specific provider about whether an age-based or lifestages option is available.
Advantages of Lifecycle Funds
1. Set and forget The biggest advantage: you don’t need to actively manage your fund type. The de-risking happens automatically. For members who won’t (or don’t) engage with their KiwiSaver, this is a significant benefit.
2. Reduces the risk of staying in growth too long Some members never switch out of their starting fund. A lifecycle fund ensures the portfolio gradually becomes more conservative — protecting near-retirees from a market crash just before 65.
3. Appropriate for lower-engagement investors Not everyone wants to think about KiwiSaver fund types. A lifecycle fund provides reasonable, sensible outcomes without requiring decisions.
Disadvantages of Lifecycle Funds
1. May de-risk too early or too late The age-based transitions are generic. A 50-year-old who plans to keep working until 70 and doesn’t need KiwiSaver for 20 years may be moved to conservative too early. Conversely, someone in poor health at 55 may need more conservative allocation sooner.
2. Less control If you want to override the automatic allocation — stay in growth longer, or become conservative earlier — lifecycle funds may limit your flexibility.
3. Fees can be higher Some lifecycle products have higher management fees than straightforward single-fund options. Always check the fee structure.
4. Benchmarking is harder When the fund is always changing composition, comparing its performance to a benchmark or to a static fund is more complex.
Lifecycle vs Manually Managed Fund — Which Is Better?
For members who actively manage their KiwiSaver — reviewing their fund type every few years, adjusting as they approach retirement — a static growth or balanced fund with manual transitions is likely to produce better outcomes. You can tailor the timing of transitions to your actual retirement date, health, and other assets.
For members who won’t engage with their KiwiSaver at all, a lifecycle fund is considerably better than staying in a default conservative fund for 40 years.
The ideal scenario: Choose a growth fund in your 20s and 30s, manually switch to balanced in your mid-50s, and switch to conservative in your early 60s. This gives you growth fund returns during the accumulation phase and appropriate capital preservation near retirement — without the fees or inflexibility of a lifecycle product.
See conservative vs balanced vs growth — which by age? for a manual de-risking guide.
Should You Choose a Lifecycle Fund?
| Consider a lifecycle fund if: | Consider a static fund if: |
|---|---|
| You won’t actively review your KiwiSaver | You’re comfortable making periodic fund changes |
| You want genuinely automatic management | You want lower fees |
| You’re in a default provider already using lifestages | You want maximum growth in early decades |
| You have no other investments to consider | You have a specific retirement plan that differs from age defaults |