This calculator is a projection tool; it illustrates “what-if” scenarios (e.g., changing contribution rates or fund type), rather than predicting what will happen. Results depend on the assumptions used, so this article explains what’s built into the model and why.
The core assumptions align with the Financial Markets Authority (FMA) KiwiSaver projection methodology used for member statements, which is designed to standardise projections across the industry. (Financial Markets Authority)
Why projections can differ between calculators
Even when calculators are “industry standard”, outputs can differ due to:
whether figures are shown in today’s dollars (inflation-adjusted) or future dollars
how fees and tax are handled (average vs provider-specific, standard tax rate vs individual PIR)
how contributions are treated over time (e.g., whether default rates step up in future years)
whether the calculator assumes behaviour like no savings suspensions or no early withdrawals.
1) The baseline framework: FMA projection assumptions
Income and contribution growth
The projection assumes:
Pay increases by 3.5% each year, and contributions increase in line with pay (including voluntary contributions).
Contribution behaviour over time
The projection assumes:
Regular voluntary contributions (e.g., a direct debit) continue each year until age 65.
One-off contributions repeat each year until age 65, capped at $1,500 per year to avoid overstating results from unusual lump sums.
No savings suspensions occur.
Withdrawals
The retirement projection assumes:
No withdrawals for first home purchase or hardship, and (when estimating the weekly drawdown amount) no lump-sum withdrawal at age 65.
Government contribution
The projection assumes:
The Government contribution amount ($260.72) earned in the most recent statement period continues to be received each year until age 65.
Unless your income surpasses $180,000 before tax, in which case the government contribution will cease.
Fund choice stays the same
The projection assumes:
The member stays in the same fund (or same fund mix) until age 65.
2) Returns, fees, tax, and inflation
Returns are standardised by fund type (after fees and tax)
FMA projections apply a standard assumed return rate based on fund type. These rates are:
after fees (using an average fee for the fund type, not a provider’s exact fees), and
after tax at 28% (a standardised assumption).
The FMA return assumptions (after fees and tax) are:
Defensive: 1.5%
Conservative: 2.5%
Balanced: 3.5%
Growth: 4.5%
Aggressive: 5.5%
Inflation adjustment (today’s dollars)
Results are shown inflation-adjusted, using 2% p.a. inflation, so they’re expressed in “today’s money” (purchasing power).
After age 65: drawdown illustration to age 90
For the retirement “weekly income” style illustration, the assumptions include:
a 2.5% p.a. return after fees and tax after age 65, and
withdrawals spread over 25 years (to age 90).
3) Contribution rate settings: why the calculator uses “Min”
What “Min” means
Instead of offering “3%” as a fixed option, the calculator uses “Min” (minimum/default rate) because the minimum contribution rate is scheduled to change over time.
Under current announced settings:
From 1 April 2026, the minimum employer contribution rate increases to 3.5%. (Inland Revenue)
From 1 April 2028, the minimum employer and employee contribution rates will increase to 4.0%. (Inland Revenue)
So when you select Min, the model applies a time-based step-up:
3.0% → 3.5% (April 2026) → 4.0% (April 2028). (Inland Revenue)
4) First Home Deposit scenarios (high-level)
The first-home view uses the same underlying return/inflation framework, but applies a target withdrawal amount to estimate how long it may take to save up to your target amount.
Important practical note: first-home withdrawals depend on eligibility and provider processing, so the result is an estimate for planning, not a guaranteed amount.
5) What this calculator is (and isn’t) for
Best use: compare scenarios and support decisions:
“What if I increase contributions?”
“What if I change fund type?”
“How does selecting Min vs a higher rate change outcomes over time?”
Not designed to do: predict markets or personal life events (career breaks, future PIR changes, policy changes beyond what’s incorporated, etc.).