How Your Emotions Can Impact Your KiwiSaver
If you’re a KiwiSaver member, you’ve probably noticed your balance doesn’t grow in a straight line — it naturally peaks and dips over time.
What many people don’t realise is that the smartest KiwiSaver investors aren’t always the most financially savvy or logical. They’re the ones who are good at managing their emotions when markets shift.
What the Research Says
Behavioural finance research shows that emotional decision-making, whether it’s fear when markets fall or excitement when they rise, often leads to poor decision making for investors.
For KiwiSaver investors, this may look like:
• Seeing a drop and wanting to switch to something “safer”
• Seeing strong returns and feeling tempted to double down
These reactions are completely human — but they can lead to switching at the wrong time, locking in losses, or missing future growth. In KiwiSaver, where the focus is long-term, these choices can have a significant impact.
A big part of this comes down to loss aversion, the idea that we feel losses more intensely than gains. Even a small dip in your KiwiSaver balance can feel alarming, especially when months or years of prior gains are forgotten the moment the number drops. Our brains naturally fixate on the loss, not the progress.
That’s why it’s so important to zoom out and look at the bigger picture. KiwiSaver will have ups and downs — that’s normal. By recognising how emotions influence our decisions, it becomes much easier to stay calm, stay focused, and avoid decisions you might regret later.
How to Manage Your Emotions (and Make Better KiwiSaver Decisions)
1. Pause before changing anything
During volatility, take a breath and give yourself space. KiwiSaver is designed for long-term outcomes — reacting quickly to short-term movements usually doesn’t help.
2. Make sure your fund matches your needs
Being in the wrong fund can amplify stress.
Your risk level should match things like:
how long until you need the money
your comfort with ups and downs
what matters to you (such as ethical investing)
If you’re unsure whether your current KiwiSaver fund suits your situation, we can help you assess this.
3. Avoid timing the market
Switching based on emotion or short-term performance is where many investors get caught out. Consistency over time is key to KiwiSaver doing what it’s meant to do.
4. Take advantage of a KiwiSaver adviser – it’s free!
Working with one of our financial advisers can help take the pressure off. We’ll provide guidance, help you avoid emotional decisions, and make sure your KiwiSaver stays aligned with your goals.
The Bottom Line
KiwiSaver balances will always experience ups and downs — it’s part of how investing works.
Learning to manage your emotions during these periods doesn’t just help you feel calmer; it helps you make smarter KiwiSaver decisions.
If you’re not sure your fund still suits your needs or you want reassurance through volatile periods, we’re here to help.
