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, which NZ schemes offer them, and the trade-offs compared with choosing a fund type yourself.
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:
ANZ Lifetimes Option
ANZ offers a free “Lifetimes” investment option that automatically moves your savings between its existing funds based on your age (rather than being a separate fund itself): Growth Fund until age 36, gradually stepping down through Balanced Growth and Balanced, then Conservative Balanced from around 55, Conservative from 61, and the Cash Fund from 65. It doesn’t account for personal circumstances or market conditions — it’s a fixed, age-only glide path, and you can opt in or out at any time at no extra cost.
Lifestages KiwiSaver Scheme
Note this is a distinct, separate KiwiSaver scheme in its own right — not a Westpac product. It offers a “Lifestages Auto” option that allocates members’ balances between its High Growth and Income funds based on age bands, automatically de-risking over time.
ASB and other providers
Westpac and ASB do not currently offer an automatic age-based (“lifestages”) glide path option — check with your specific provider, as availability changes.
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 gradually becomes more conservative, which reduces how much of a near-retiree’s balance is exposed to a market crash just before 65 (KiwiSaver in a market downturn).
3. No decisions needed along the way Members who don’t want to review their fund type get a change in risk over time without making one.
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 Option vs Switching Yourself
| Lifecycle option | Single fund type, switched by you | |
|---|---|---|
| Who decides when risk falls | The scheme’s age schedule | You |
| Reflects retirement date, first home plans, other assets | No, age only | Yes, if you act on them |
| Effort | None after joining | Periodic reviews and switches |
| Risk of not de-risking at all | Low | Depends on whether you switch |
| Fees | Those of the underlying funds or the option; check the PDS | Those of the fund you choose |
A member managing it themselves might, for example, hold a growth fund for many years and then move in steps to balanced and conservative over the years before withdrawal; a lifecycle option makes broadly the same kind of moves on a fixed age schedule. Risk by time horizon covers the timing facts either way, including sequence-of-returns risk, and KiwiSaver drawdown in retirement covers withdrawing the balance.