Even small increases in returns can have a big impact on your retirement

Your KiwiSaver balance has two ways of growing:

  1. By the amount of money you, your employer and the Government put in, and
  2. The returns you earn on your investments. The higher the return you earn on your investments, the bigger your savings at retirement.

These simulated results show the effects of different rates of compounding returns - one a 4% per annum return and the other a 6% per annum return over time.

Both investors start saving at age 20 on salaries of $30,000 each and remain employed until their retirement age of 65. No withdrawals are made. Their salaries grow by 3% per annum and they earn a 4% or 6% per annum real return after tax, fees and expenses. Inflation is assumed to average 2% per annum. The investors and their employers each contribute 3% of the investor’s Before Tax Pay into the investor’s KiwiSaver scheme account. The employers’ contributions are net of employer’s superannuation contribution tax at current rates.

Disclaimer - The illustrations above do not reflect the prospective performance of the Scheme or of any Fund. The returns to members of the Scheme are subject to investment and other risks (including potential losses). No returns are guaranteed or assured, and returns can at times be negative, particularly given the length of the investment period shown in the illustration. Past performance is not necessarily an indicator of future performance and returns over different periods may differ.