NZ KiwiSaver retirement projection

Project a balance from explicit assumptions

This calculator projects an existing KiwiSaver balance using an annual contribution, a whole number of years, an assumed annual return after tax and fees, and an inflation assumption. It displays both the future dollar balance and its estimated value in today's purchasing power. These are scenarios, not forecasts supplied by a fund manager, and no return is guaranteed by the calculator.

Enter the current balance from your provider statement. For annual contributions, use the combined amount expected to reach the fund after ESCT on employer contributions. The separate contribution calculator can help estimate that amount. Do not enter gross employer contributions if you intend to model net fund inflows. Add voluntary or government contributions only when the amount and eligibility assumptions have been established separately.

The annual recurrence

For each year, the calculator grows the opening balance by the selected net return and adds the annual contribution at year end. It repeats that operation for the entered number of years. Year-end contributions are an explicit timing assumption. Real payroll contributions arrive during the year, so their investment timing can differ. The model favours a transparent recurrence over an unexplained promise of a precise retirement balance.

For a $1,000 opening balance, $100 annual contribution and a 10% return, the first year's closing balance is $1,200. The second year's balance is $1,420: $1,200 grows to $1,320 and another $100 is added. With a zero return over the same two years, the result is $1,200. This small example is useful for checking that contributions are being added once per year rather than monthly or at both ends of the year.

Return after tax and fees

The return field should already reflect the tax and fees you want included in the scenario. The calculator does not subtract a provider fee or apply a prescribed investor rate separately. Entering a gross market-return assumption as if it were net can overstate the projection. Conversely, subtracting fees yourself and then treating the field as gross can lead to double counting if you make additional manual deductions afterwards.

The default is an illustration, not a recommendation for a fund category or an estimate of future market performance. Try a lower-return scenario and compare it with the original. Negative annual returns are supported above minus 100%, but the model applies the same return every year. Actual investment returns fluctuate, and a sequence of gains and losses can matter when contributions or withdrawals occur between them.

Future dollars and today's money

Inflation reduces what a future balance can buy. The calculator divides the projected balance by one plus the inflation rate raised to the number of years. If $1,000 grows by 10% for one year while prices also rise by 10%, the future balance is $1,100 but its modelled purchasing power remains $1,000 in today's money. The two outputs therefore answer different questions.

Keep comparisons on the same basis. Comparing a future dollar balance with today's annual expenses without adjusting for inflation can exaggerate apparent retirement readiness. Equally, do not subtract inflation from a return and also use the inflation adjustment unless that is the model you intentionally want. Here the return is a nominal net return, while the separate inflation field converts the final nominal result to today's purchasing power.

Contributions over a long horizon

The annual contribution stays constant in dollar terms throughout this projection. It does not increase with wages or inflation, automatically change when minimum contribution rates change, or stop during an employment break. This is a meaningful limitation for a projection spanning decades. One useful approach is to run a conservative contribution scenario as well as a scenario reflecting an anticipated increase, clearly labelling both assumptions.

A zero-year projection returns the opening balance. Zero contributions show how the current balance alone would evolve. These scenarios can isolate the effect of saving versus assumed investment growth. The contributed-total output is the opening balance plus future contributions; it helps distinguish money supplied from growth within the model. It does not reconstruct how much of the opening balance originally came from contributions or past returns.

Withdrawals and retirement income

The tool does not model first-home withdrawals, hardship withdrawals, transfers or retirement drawdown. If you expect a withdrawal, a single uninterrupted projection can overstate the remaining balance. Model the periods before and after that event separately, with a revised opening balance. The calculator also does not determine when you are eligible to withdraw or what portion of the account may be available.

A projected balance is not an annual retirement income. Turning it into spending requires assumptions about retirement duration, withdrawal timing, future returns and other income. Avoid dividing it by a guessed number of years and presenting that result as a secure income entitlement. Use the projection as one input to a broader plan and check provider and independent guidance before making significant investment decisions.

Make the scenario reviewable

Save the balance date, contribution basis, horizon, return and inflation assumptions with the result. Revisit them when salary, fees or contribution arrangements change. The most useful output is a range of understandable scenarios whose differences you can explain, rather than a single distant number displayed with unwarranted certainty.

Frequently asked questions

Sources

• IRD KiwiSaver contribution settings