KiwiSaver Retirement Income Simulator information

This simulator can be used to estimate the level of your (and your partner's) retirement income. Using this simulator allows you to:

  • See whether you might have sufficient funds to provide you with your desired standard of living in retirement.
  • See how different market situations might impact your situation.

It has been designed for New Zealand conditions only.

Today's dollars

The simulator gives the results in today's dollars which converts your future retirement savings and income into today’s relative buying power. It takes the future dollar amount and deflates it at the rate of price inflation, as required by FMA regulations. Living standards have tended to grow faster than price inflation, and you should be aware that the today's dollars results don't allow for any increase in living standards. The simulator estimates price inflation to be 2% p.a. and salary/wage inflation to be 3.5% p.a.

All simulator inputs should be in today's dollars.

Current environment

The simulator results are based on legislation and rules at 1 April 2021 and you are assumed to be the age you selected for the whole year; for best results, you should enter your nearest age at the current date.

The simulator assumes that certain legislative thresholds and limits relating to retirement savings, tax and social security are increased or indexed in line with wage inflation (unless otherwise stated). The actual rate of increase in these legislative thresholds and limits may vary from the assumed wage inflation rate.

The simulator will be updated from time to time as the legislative environment changes.

Retirement savings account

The simulator assumes your retirement savings are built up over time with contributions from you, your employer and the Government (for example government contributions if eligible) and investment earnings over your working life. Fees and taxes are deducted each year.

Desired income

The simulator allows you to nominate a desired level of income in retirement. This defaults to 60% of your pre-retirement salary; you can change this using the slider button on the right of the chart. Choosing a lower level of retirement income will make your retirement savings last longer, while a higher retirement income will use your retirement savings sooner.

Please note that the desired income is indexed with price inflation only, and will reduce in purchasing power relative to your salary if you are not close to retirement. You should set a desired income relative to your salary near retirement, rather than current salary.

If you expect to receive regular income from other financial assets (e.g. rental income), enter that under the Other Assets/Income panel. The simulator will include this when calculating your total retirement income.

The simulator lets you (and your partner) withdraw a lump sum at retirement. This will reduce the period your retirement income is expected to last.

Currently withdrawals from your retirement savings are not taxed.

Retirement age

The simulator assumes you start using your retirement savings when you reach your specified retirement age. This defaults to age 65, but you can change it by sliding the button on the base of the graph.

Please note that you cannot normally access KiwiSaver savings until the age of eligibility (currently 65).

The longer you wait before you start drawing down your retirement savings, the longer your retirement savings will last.

NZ Super

The simulator assumes NZ Super is indexed in line with price inflation and that you are eligible for NZ Super once you turn 65. If you choose to include your partner, the simulator will also assume your partner is eligible once they turn 65. If your status is single the amount paid assumes you will be living alone. If you continue to work post 65, you can choose to reinvest your income from NZ Super and earn investment returns until withdrawn. By reinvesting your NZ Super, your retirement savings will last longer.


You can enter your spouse or partner’s details to help you understand your combined financial retirement situation.

The values on the Other Assets/Income and Assumptions panels apply to both you and your spouse/partner if you include them. If you don’t choose a different spouse retirement age on the Retirement Goals panel the simulator assumes your spouse/partner retires at the same time as you or at age 65 whichever is later.

Investment options

You can choose between the following five investment options:

  • 1.5% p.a. for Defensive (10% growth assets / 90% defensive assets)
  • 2.5% p.a. for Conservative (35% growth assets / 65% defensive assets)
  • 3.5% p.a. for Balanced (63% growth assets / 37% defensive assets)
  • 4.5% p.a. for Growth (90% growth assets / 10% defensive assets)
  • 5.5% p.a. for Aggressive (100% growth assets)

The assumed rates of return used are based on those set out in Part 2 of Schedule 7A of the Financial Markets Conduct Amendment Regulations 2019, and the growth asset allocations shown are the maximum allocations for each fund type.

The default returns are shown after tax and investment fees and are based on the highest Prescribed Investor Rate (PIR) of 28%. Your actual PIR rate may be lower or change during your investment life time and therefore your final retirement benefit may differ.

These returns are illustrative only and should not necessarily be relied on to estimate the actual amount of investment earnings you will receive. The rate of investment return is assumed to remain constant over the projection period.

If you're planning to continue investing for 10 years or more don't be too concerned about current economic conditions, long term average returns are what matters. However, if you have an investment horizon of less than 10 years, then think more carefully about current conditions when setting your expected return. Returns are generally lower after a period of markets being up and higher after markets have been down.

Assumptions and stress test

There are a number of factors that will affect the growth of your retirement savings and income. Some of the major factors, like investment returns and inflation, will fluctuate over time, but are assumed to lie within certain ranges over the long term.

To keep it simple, the values for investment return and inflation remain the same for each year of the projection. These default values are considered reasonable for the current conditions and are consistent with each other. You can change them but it is possible that unrealistic scenarios will be projected. The default investment return assumption depends on the investment option you select. The simulator imposes some limits on the fixed assumptions but actual experience could be outside these ranges (e.g. investment returns may be negative in some years).

The results given depend on the assumptions input. If these assumptions do not occur the actual level of your retirement savings at retirement and your retirement income may be different. In particular, if you are closer to retirement, short-term negative investment returns could significantly reduce the lump sum you may be able to take at retirement. It is recommended that you get regular updates of the projections and run a number of projections by varying the editable assumptions to illustrate the impact of changes in these assumptions on the projections, for example, the effect of different investment returns.

On the Stress Test panel you can choose to enable a simulated "stress test". With the "stress test" the values used for investment return and inflation are based on simulations of different future economic scenarios from Mercer's Capital Market Simulator taking into account the underlying assets which your retirement savings might be invested in. The values for each of these elements will vary from year-to-year and may be negative in some years. The values used also depend on the investment option you select. By clicking on the 'Refresh' button on the Stress Test panel, a new scenario will be chosen and the values will change. At the right of the screen you will see a chart showing the real return under each "stress test" scenario. The real return is the return over and above the level of wage inflation.

There are other assumptions used in the calculations which are set by legislation and cannot be changed.


The simulator assumes that your salary is your taxable income. If you have non-taxable income, use the ‘Other income (pre-retirement)’ slider on the Other Assets/Income panel to record it. Your salary and other income are assumed to grow with inflation.


Your employer and regular contributions are based on your selected contribution rates and your gross salary.

The simulator assumes your employer and your regular contributions continue after you turn 65 until you retire (however if you have KiwiSaver please note that your employer can choose to stop contributing once you have reached your eligibility date).

Government contribution (KiwiSaver members only)

If your retirement savings account is a KiwiSaver account and you contribute, the simulator assumes you will get the Government contribution. The current maximum annual Government contribution is $521.43, the simulator doesn’t increase this for inflation.


Employer contributions are taxed with Employer Superannuation Contribution Tax (ESCT). The rate of ESCT is based on your salary plus gross employer contributions in the previous year. To determine the ESCT rate for the first year of projection, the simulator assumes that the wage inflation and employer contribution rate for the previous year is the same as the first year. Member contributions are paid from after-tax salary so are not taxable.

The simulator assumes that the investment return used for the accumulation of the retirement savings balance has been taxed.

Benefit payments are currently tax-free.


On the Assumptions panel we have pre-set a percentage-based fee of zero (as the standard return rates are net of fees), however you can change this fee if you choose to. The fee that you select is deducted from the investment return prior to calculating earnings in each future year.

The administration fee (also default zero) is a dollar-based fee and depending on whether you have included your partner or not you will need to enter the appropriate amount for one or both of you. The simulator assumes that this fee is deducted annually and will increase in line with wage inflation.

Other retirement savings and income at retirement

In addition to your retirement savings account and NZ Super, you may have other retirement savings and regular income you expected to have available at retirement.

Other retirement savings may include a payout from other retirement schemes, cash, term deposits, shares or property. After retirement, the simulator assumes these other retirement savings will earn the same rate of return as your retirement savings account and they will be drawn down after your retirement savings account is used.

Other regular income may include income from rental properties but should not include income sourced from other retirement savings you may have entered. The simulator assumes the regular income is after tax and will increase with price inflation.

Life expectancy

The life expectancy age has been calculated based on the New Zealand Life Tables 2012-2014. These indicate the death and survival experience of people between 2012 and 2014 and allow for future improvements in longevity, based on average improvement rates over the past 17 years.


You can select up to three career breaks for yourself and your partner. Just enter the age when you expect to take a break and for how long. While on a career break, your retirement savings will grow with investment returns, but the simulator assumes you don’t earn income or contribute.

You can also select a career change by entering the age at which you will change salary and the new salary (in today’s dollars). This feature is designed to allow you to model going part time, getting a promotion or changing jobs.


This simulator and the information provided have been produced by Mercer (N.Z.) Limited and have been prepared without taking into account your personal objectives, financial situation or needs. You should consider these matters and seek advice from an appropriately authorised financial adviser before making any decisions concerning your retirement savings or making other investment decisions. This simulator is not intended as an advertisement for any product issued by Mercer (N.Z.) Limited, and any decision to invest in any Mercer product must be made on the basis of the current product disclosure statement which you must receive and read before committing to an investment.