Important Information

The AMP Retirement Calculator (Tool) provides general information and estimates only, based solely on the information you provide and the assumptions set out in this document. It is designed only to help you start thinking about your retirement planning. Before making any decisions, we strongly recommend you speak to a financial adviser. If you don’t have a financial adviser, please contact us on 0800 267 5494.

The Tool is made available by AMP Services (NZ) Limited (FSP38082) (AMP NZ). References to 'AMP', 'we', 'us' and 'our' in this document are references to AMP NZ.

The Tool does not provide financial advice. It does not recommend or give an opinion about acquiring, disposing of, or holding any financial product, and it does not take into account your full financial situation, needs or goals. The results are generated automatically using only your responses to the questions asked.

The results are estimates only. They are not predictions, forecasts or guarantees of actual future outcomes. Actual outcomes depend on many variables, including investment returns, inflation, fees, tax, changes to NZ Super, the length of your retirement, and your personal circumstances. Investment returns are not guaranteed, and fees and tax rates may change.

You should not rely on the results of the Tool when making financial decisions. We strongly recommend that you seek advice from a qualified financial adviser before making any decisions based on the results provided by the Tool. If you don't have an adviser, you can contact AMP on 0800 267 5494 to discuss your options. A disclosure statement is available on request from your adviser or AMP, free of charge. For information on financial advice provision at AMP, please see Help with the advice we provide at AMP NZ | AMP.

While reasonable care has been taken to ensure accuracy, no person accepts any liability for any loss or damage arising from the use of this Tool (including from error or omission).

The Tool has been designed for New Zealand conditions.

Investment risk

Investing is subject to risk. This includes the potential for you to lose income and any amounts invested. In general terms, investment risk describes how much the value of your investment may rise and fall over time:

• Lower risk investment options tend to be more stable, but generally offer lower expected returns over time.
• Higher risk investment options tend to experience bigger ups and downs in value, but generally offer the potential for higher returns over the longer term.

The risk level you select in the Tool is used only to choose which assumed rate of return is applied to your savings in the calculation (see 'Investment risk levels and rates of return' below). It is not advice about which investment option is right for you.

Terms of use

By using the Tool, you agree to these terms and conditions and acknowledge the important information and assumptions set out in this document.

Your personal information

To use the Tool, you will be asked to provide personal information, including your name, email address, mobile number, age, income and savings details. This information is collected and held by AMP Wealth Management New Zealand Limited and will be handled in accordance with AMP's Privacy Policy, which explains how we collect, use, share and store your personal information. AMP's Privacy Policy is available at amp.co.nz/nz/privacy-policy.

By providing your personal information, you acknowledge AMP's Privacy Policy and agree to us contacting you about AMP products and services that may be of interest to you, including by phone, email or SMS using the contact details you provide.

You can opt out at any time by using the opt-out link in the Tool, using the unsubscribe option included in our messages, or by emailing marketingnz@amp.co.nz.

Information you provide

The results of the Tool depend on the accuracy of the information you provide. We do not verify the information you enter (including your income and KiwiSaver or other savings balances). If the information you provide is inaccurate or incomplete, the results will be less accurate.

Changes

We may change, suspend or withdraw the Tool, or update these terms and the assumptions, at any time without notice.

How the Tool Works

The Tool uses the information you provide and the assumptions in this document to estimate:

• how much you might spend each week in retirement (after tax, and including NZ Super), based on the spending level you select; and
• the age to which your retirement savings could last, based on that spending level, your selected investment risk level, and your savings.

You will be asked to enter your KiwiSaver balance and any other savings. If you are unsure of your KiwiSaver balance, you can estimate it using the AMP KiwiSaver Calculator.

The Tool assumes you will retire, and begin using your retirement savings, at your selected retirement age.

The calculations are performed using a formula developed in conjunction with consulting actuaries, applying the assumptions set out below.

These results are estimates only. Your money could last a shorter or longer time than shown, depending on your actual spending, investment returns, inflation, fees, tax, changes to NZ Super and your personal circumstances.

Assumptions

Your retirement spending

The Tool asks you to select a retirement spending level of 70%, 80% or 90% of your pre-retirement after-tax income. Your weekly retirement spending estimate is calculated by applying your selected percentage to your after-tax income. If you are retired or working part time, the Tool asks you to enter your most recent full-time after-tax income. This is used as a proxy for your pre-retirement standard of living when estimating your retirement spending.

The calculator estimates retirement spending needs using an income replacement approach. This approach assumes that many people will require a proportion of their pre-retirement income in retirement to maintain a similar standard of living. Users can model different retirement lifestyles by selecting spending levels equivalent to 70%, 80% or 90% of their current income. 

The specific 70%, 80% and 90% options used in the Tool have been set by AMP with reference to this methodology. They are illustrative spending levels only. They are not a recommendation from AMP about an appropriate spending level for your circumstances, and your actual spending needs in retirement may be higher or lower. Your spending needs may also be affected by costs the Tool does not take into account, such as mortgage or rent payments, maintaining your own home, or living in a retirement village or aged care facility.

Your retirement age and retirement period

The Tool assumes you retire and begin drawing on your retirement savings at your selected retirement age. The 'age your money could last until' shown by the Tool is the estimated age at which your retirement savings (excluding NZ Super) are projected to run out, based on your selected retirement age, spending level and the assumptions in this document. NZ Super is assumed to continue for the duration of your retirement.

Your savings

The Tool uses the KiwiSaver balance, and other savings amounts you enter. It assumes those amounts remain invested in line with your selected investment risk level until they are exhausted. The Tool does not allow for any further contributions to, or withdrawals from, your savings before your selected retirement age. If you expect to make further contributions or withdrawals before retirement, your actual position will differ from the estimate. Any ‘other income’ you enter (such as part-time work, rental income or other regular payments) is assumed to continue, unchanged, for the duration of your retirement.

How your savings are assumed to be invested

The Tool does not invest your money. To estimate how long your savings could last, it assumes your KiwiSaver and other savings remain invested across three types of fund, weighted according to your selected risk level and retirement timeline:

• Short term (Conservative fund): assumed to hold the savings you will draw on in your early retirement years, prioritising stability and access;
• Medium term (Balanced fund): assumed to hold savings for your mid-retirement years, with moderate growth potential; and
• Long term (Growth fund): assumed to hold savings for your later retirement years, with higher growth potential to help your savings last.

The weighting across these funds is calculated automatically from your selected risk level and retirement age. As your savings are drawn down, money is assumed to move gradually from higher risk funds into more stable funds over the course of your retirement. This is a modelling assumption used to estimate how long your savings could last. It is not a recommendation about how you should invest your savings, and your actual investments (and their returns) may differ.

This investment strategy is commonly referred to as the “Three-bucket strategy”. Learn more about this strategy here: 'Three Buckets' strategy

Investment risk levels and rates of return

The Tool asks you to select the level of investment risk you are comfortable with. Your selection determines the assumed rate of return applied to your savings, as shown in Table 1 below. The rates of return are:

• After tax of 28%. This is the highest and most common tax rate for KiwiSaver members across all KiwiSaver providers. Your tax rate may be different.
• After fees. The fees used are an industry average for your investment option and do not reflect the actual fees you pay.

These rates of return are based on assumptions set by the Government for KiwiSaver projections. Find out more on the Financial Markets Authority website at KiwiSaver projections | Financial Markets Authority.

Table 1 (Rates of Return)

Inflation

The assumed rate of general inflation used is 2% per year (the long-term expected rate of inflation), to reflect the 'real buying power' of your savings in the future.

Tax

Investment returns are assumed to be after tax at 28%, as set out above. Your weekly retirement spending estimate is expressed after tax. Where the Tool converts the pre-tax income you enter to an after-tax amount, this is done using the current New Zealand personal income tax (PAYE) rates and thresholds. The conversion does not allow for the ACC earner's levy, student loan repayments, KiwiSaver contributions, or any other deductions from your income, and assumes the income you enter is your only taxable income.  

NZ Super

NZ Super is automatically included in your estimate. The Tool assumes you will be eligible to receive NZ Super from age 65 onwards, and that the amount of NZ Super keeps pace with inflation.

The NZ Super amount included is the weekly amount after tax at the 'M' tax code for a single person living alone, which is currently $1,110.30 per fortnight. NZ Super rates are reviewed and adjusted by the Government each year on 1 April, and your actual entitlement will depend on your circumstances (including your relationship status, living arrangements and tax code).