Navigating KiwiSaver Investment Amid Cancer Diagnosis

A New Zealand resident diagnosed with blood cancer seven years ago is seeking guidance on managing their KiwiSaver investments. The individual currently has their funds allocated to conservative and balanced investment options, expressing concerns about whether this approach is overly cautious given the potential need for early withdrawal due to medical expenses.

Understanding Investment Options

The situation highlights a critical issue many face when dealing with serious health challenges. The individual acknowledges the uncertainties surrounding their condition and the impact it may have on their family. Seeking advice from personal finance expert Mary Holm, they want to know if their current investment strategy is appropriate.

Holm emphasizes that the choice of investment funds should reflect personal circumstances, especially when the timeline for accessing those funds is unclear. “It’s wise for anyone who doesn’t know when they will spend money – whether for a first home, in retirement, or in your situation – to invest where the balance is not going to zoom up sometimes but also plunge sometimes,” she notes. This approach aligns with a conservative investment strategy designed to minimize risk.

Evaluating the Serious Illness Clause

Investors like this individual must also consider the implications of utilizing KiwiSaver’s “serious illness” clause, which allows for early withdrawal of funds in cases requiring life-saving treatment. This clause can provide crucial financial support during challenging times. However, the decision to withdraw should come after careful consideration of one’s overall financial picture.

Holm reassures that the current conservative and balanced allocations are not excessive caution. In fact, they can offer a safety net for individuals facing unforeseen medical expenses. The balance between risk and security is essential, especially when future financial needs may be unpredictable.

In conclusion, managing KiwiSaver investments during a significant health challenge requires a tailored approach that prioritizes both security and accessibility. Individuals in similar situations should consider their unique circumstances and seek professional advice to navigate their investment strategies effectively.