Retirement Calculator

This calculator projects your retirement savings by combining your current age and retirement age to work out how many years you have left to save, then growing your current retirement savings and annual contributions each year at your expected annual return using annual compounding.

It then estimates your retirement income in two ways: a simplified figure that spreads your balance evenly across your chosen retirement duration, and a 4% rule estimate. The inflation rateis used to show your balance in today's money so you can judge its real spending power.

A retirement calculator is a planning tool that estimates how much money you could accumulate by the time you retire and what income that balance might generate. It brings together your savings, contributions, expected investment return and time horizon to paint a picture of your financial future.

Whether you are building superannuation, a 401(k), a pension, an RRSP or KiwiSaver, the same principles apply: the more you contribute and the longer your money compounds, the larger your retirement balance is likely to be. This calculator makes those trade-offs easy to see.

A widely used guideline is to aim for a retirement income of around 70% of your pre-retirement salary, since some work-related costs disappear in retirement. To fund that income, many people target a balance of roughly 20 to 25 times their desired annual spending.

Your personal number depends on your lifestyle, how long you expect to be retired, whether you own your home, and any government pension or benefits you may receive. Use the inputs above to test different balances and see how the estimated income changes.

Compound growth is the engine of long-term retirement saving. Each year your investment returns are added to your balance, and the following year you earn returns on that larger amount as well as on your new contributions.

Over decades this snowball effect can mean that investment growth makes up a large share of your final balance — often more than the contributions themselves. That is why starting early and staying invested through market ups and downs matters so much.

Consider a saver with the following figures:

• Current age: 35
• Retirement age: 67
• Current savings: $50,000
• Annual contribution: $12,000
• Expected return: 7%

With 32 years until retirement and annual compounding at 7%, the $50,000 starting balance plus $12,000 a year grows to well over $1.5 million by age 67. A large portion of that final balance comes from investment growth rather than contributions, demonstrating how powerful a long time horizon can be. Adjust the figures above to match your own situation.

• Start early so your savings have more years to compound.
• Contribute regularly to steadily build your balance.
• Increase contributions over time, for example whenever your income rises.
• Minimise fees, since high fees quietly erode long-term returns.
• Diversify investments to manage risk across different asset types.
• Review your retirement goals regularly and adjust your plan as your circumstances change.