We understand there’s a lot of uncertainty around saving for retirement. It’s often hard to know if you’re on the right track. Working out whether or not you’re saving enough or how much you’ll be able to withdraw during retirement is very difficult. That’s why we’ve introduced our new KiwiSaver Retirement Planner.

 

According to a recent study by Massey University, Westpac and Workplace Savings NZ, for a two-person household to live a more fulfilling ‘choices’ lifestyle in retirement (i.e. a better standard of living, with some luxuries) they would need to spend roughly $57,000 p.a. in a metropolitan area and roughly $53,000 in a regional area (after taxes).

 

Currently gross NZ Superannuation payments are only about $30,000 p.a. for a couple. So it’s clear that you’ll need your KiwiSaver to provide a good amount of income, perhaps $25,000+ p.a. depending on your lifestyle, over and above your Government Super.

 

Now, dreaming of a huge lump sum of money is great, but in retirement it’s all about using that lump sum to produce a steady stream of income.

 

There are a few basic things that will always influence how much or how little income you can draw from your KiwiSaver during retirement:

 

  1. Your investment returns before and during retirement (after fees and tax)
  2. How much you contribute (i.e. save) before retirement
  3. How many years you’re saving before retirement
  4. How much you withdraw each year in retirement

 

Although it’s impossible to know exactly how much income you can safely withdraw during retirement, our new KiwiSaver Retirement Planner tool provides a good starting point.

 

The Planner is designed as a flexible tool that enables you to work out if your KiwiSaver is on track to provide the income needed to fund the kind of retirement you’ve dreamed of.

 

We also wanted our Planner to provide you with flexibility. The engine behind it enables you to get a better understanding of the path you’re currently on and if it can provide the results you want. If it doesn’t provide the results you want, simply adjust any or all of the 4 levers listed above to see what is needed to get the results you want.

 

Snapshot: KiwiSaver Retirement Planner

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We believe planning tools like these are a great resource for investors because they empower you to take control of your situation, by helping you understand if you’re withdrawing too much and/or saving too little.

 

So if you’re curious whether or not your own KiwiSaver is on track, feel free to give it a try by clicking here.

 

Sean Donovan
KiwiSaver Associate

Disclaimer: This is intended to provide general information only. It does not take into account your investment needs or personal circumstances and so is not intended to be viewed as investment or financial advice. Should you require financial advice you should always speak to an Authorised Financial Adviser.