All calculators are downloadable Excel spreadsheets that allow you to save and amend your own personal data. With all the spreadsheets, enter your personal data in the purple coloured cells.
KiwiSaver calculator (How much will I have at retirement?)
This calculator tells you how much you will have when you stop your KiwiSaver contributions (if prior to age 65), at age 65, and at time of withdrawal (if later than 65).
You can adjust the age you stop contributions, the age you make your first withdrawal and your employee contribution amounts.
In addition, you can enter any salary changes you like. Most calculators only allow for inflation or percentage adjusted increases and decreases in income. Here you can enter any amounts you wish in cells B13 to B62. The calculator will automatically calculate your employee, employer and government contributions based on your inputs. If you choose to retire before age 65, the calculator assumes you will no longer receive government tax credits. If you retire after age 65, the calculator assumes you will continue to contribute towards KiwiSaver, as will your employer (some employers don’t after the age of 65).
You can also adjust your investment return assumptions. For example, when close to buying a house with your KiwiSaver money or close to retirement, you may wish to lower your return assumptions. Conversely, when decades from retirement you may go with a higher assumption assuming you are invested appropriately. Finally, there is an option to add any one off contributions or withdrawals you may make in any given year.
As with any investment and retirement planning, there are always assumptions that are likely to not play out in reality. Changes to assumptions can greatly impact the final results so don’t put too much weight into the results. Yes, use them as a guideline and a starting point to make changes. But don’t rely on them. Remain flexible and regularly review your situation.
The ultimate retirement calculator for kiwis (including Kiwisaver)
This is the ultimate calculator because it does everything the others do and more. It reflects modern retirement where people are supplementing their savings with income or providing one off early inheritances to children. This calculator allows for planning for one off or ongoing sources of income, as well as one off outside of budget spending. It also includes your KiwiSaver balance at retirement. This allows for sophisticated scenario analysis that other retirement calculators are lacking.
It’s also crucial to consider KiwiSaver investments when retiring. Especially if you are retiring early and have a significant KiwiSaver balance. You need to ensure you have enough in your non KiwiSaver savings from the age of early retirement and access to KiwiSaver funds. This calculator can help you see how much you are likely to have for retirement from both your KiwiSaver and non KiwiSaver savings.
This calculator is great as it allows you to make certain assumptions that other calculators don’t. An extra level of detail. Retirement calculators also make the difficult easy. Calculating the numbers based on assumptions is not for everybody. Calculators make the math easy. That is their redeeming feature.
However, don’t be deluded by this mathematical precision. By the mere fact that calculators rely on assumptions, the numbers provided will be wrong. That is because our assumptions will be wrong. We can’t be right about everything we assume ahead of time. Our spending, income, inflation, retirement date, and investment returns will all likely be different than assumed.
It is good practice to be pessimistic with your assumptions. For example, put your spending and inflation rate slightly higher than expected, your income and investment returns less than expected, and your expected retirement earlier than expected. By grouping these pessimistic assumptions together you bring some margin of safety to your planning should things not play out as you thought.
Then you can enter your most optimistic assumptions. Lower spending and inflation, higher income and investment returns.
This is your likely range of outcomes and is much more valuable than one number.
Once this is complete, don’t just set and forget either. As the years go by, you will have more up to date information, making the old assumptions more irrelevant. You can make new assumptions based on more up to date information, and the closer you are to retirement, the closer you will be to hitting the target.
So do use the calculator to make the math of calculating your retirement needs easy. But don’t rely on it as an absolute. Make regular reviews and update the information based on changes to your assumptions.
The ultimate retirement calculator (Not including KiwiSaver)
Same as the calculator above, except it doesn’t include KiwiSaver savings. This calculator requires significantly less inputs if you don’t want to include your KiwiSaver savings.
Monte Carlo retirement withdrawal calculator
The previous three retirement calculators have helped with seeing how much you MAY have at retirement. This calculator helps you determine if that amount is enough.
The Monte Carlo calculator allows you to enter how much you have (or are expecting to have) at retirement, along with a range of other assumptions. There is the standard stuff such as age, investment returns and inflation rate, but you can also add in changes to your annual spending (such as higher spending early in retirement), as well as any one off lump sum income or spending you expect.
It then chews out 1,000 outcomes based on the inputs you use.
A summary of results can be seen at the top of the page including the best result, worst result, median result, average result, as well as any percentile result of your choosing. For example, you can enter any percentage in cells F8 to F10 and see how many instances below that percentage amount of time you have a certain amount of savings left.
Monte Carlo simulations like this are much better than a calculator that provides one definitive amount based on averages. Here you get to see the wide range of outcomes and can decide on the probability that you are most comfortable with.
How much do I need to retire? (Die with zero) calculator
Also known as the ‘die with zero’ calculator. A popular book written by Bill Perkins encouraging people to live their best lives and spend their money.
Although I am all for enjoying life, I don’t whole heartedly agree with this approach. I would prefer you use the Monte Carlo calculator above and use the ‘median’ number as your guideline of how much you may need. Sometimes life happens and with it, unexpected results. Unexpected expenses. Unexpected loss of income. Unexpected life expectancy, and so on.
However, people still like to know how much they would need to retire and end up with close to zero dollars.
This is the calculator that will help you come up with your number. The results will also tell you how short of the target you are (if at all), and how much you may need to save per month from now until retirement to ‘catch up’.
Just be cautious using the number and have a read of the spiel underneath the ultimate retirement calculator for the pitfalls of relying too much on a retirement calculator.
retirement drawdown strategies calculator
This calculator includes eight of the most popular strategies used when deciding on how much to withdraw from your retirement portfolio each year. It includes the % of investment balance strategy, the 4% rule (or whatever % you like), the no spend inflation strategy, the Guyton-Klinger guardrails strategy, the Vanguard dynamic strategy, the Bogleheads variable withdrawal strategy, the Yale endowment strategy, and a Shiller CAPE strategy.
You can read a summary of each strategy in this comprehensive blog post, along with a practical example of each strategy in use, and the pros and cons of each.
To use this calculator, first enter your details in the purple cells in the ‘enter details here’ sheet. You can enter up to 4 different investment return assumptions in case you want to be more conservative as you age. You can also enter up to two lump sum income events and four one off lump sum spending events that are outside of the norm. If you receive regular income then that just comes off the amount you expect to withdraw per year. For example if you have $500,000 saved and want to spend $50,000 per year and will receive $20,000 income a year, then your withdrawal rate would be 6% (($50,000 - $20,000)/$$500,000).
Once your details are entered, you can see a summary of the results in the next worksheet. For the annual spend per year, I have used today’s dollars for the line graph. For example, if $25,000 annual spend in 25 years is $50,000, I still use $25,000. I feel this is more valuable information as you can see how your actual spend will change over time with each strategy. Then you can see if your quality of life may be diminishing or not. If the graph showed $40,000 in 25 years you wouldn’t have much idea if that was more or less than current spend so not as useful. A few comments on the summary of results generally speaking:
The spreadsheet uses Monte Carlo results. It analyses 1000 random future scenarios with the information provided. Each time the spreadsheet calculates it will give different results. I prefer it this way as the alternative is one average number that doesn’t bear reality. Most people want to know their odds of success and providing a range of results is best. Despite the variability, the median number doesn’t change a lot. That is the around the number that where most results occur.
Some strategies are best for leaving the most money at the end of life. Others are better at allowing you to spend more while living. There is no one best strategy for everyone.
The spreadsheet has A LOT of data. When you make changes it can occasionally take a little time to update the graphs.
The spreadsheet is currently set to automatically recalculate numbers, which means it can change results when you didn’t intend to. You can get around this by saving the sheet and by going to formulas>Calculation options>Manual. Then anytime you make changes, don’t forget to click ‘Calculate Now’ in the Formulas tab. Otherwise it can be nice to see the variation in results.
For more detailed results, such as year to year investment returns, withdrawal amounts, and investment balance you can click on the tab relevant drawdown strategy along the bottom of the worksheet. Note that the graph uses non inflated spend as mentioned above, but the table uses inflated spend.
A few other notes on the different sheets:
For the Guardrail strategy you will need to enter some more data in that sheet to make it work how you like. In cell C7 you can enter the % change in withdrawal rate that you want to make changes to your spend. For example, a bad year in investment returns may send your withdrawal rate higher than you like. How much higher than your initial withdrawal rate are you comfortable going? In cell C8 you can enter the largest increase and decrease in spend you will allow. It is also expressed as a percentage.
For the Vanguard dynamic spend strategy you also need to enter some more data in that sheet to make it work how you like. In cell C7 you can enter the largest increase in spend you would like after positive investment return years. Cell C8 you can enter the largest decrease in spend you would like after negative investment return years.
The Yale endowment strategy needs three extra inputs for it to work as intended. Cells C7 and C8 are the same as the Vanguard strategy. The most and least you are willing to increase and decrease spend by in positive and negative years respectively. The third input is in cell C9 and that is ‘yes’ or ‘no’ as to whether you want to use the 3 year average of investment balance or the current balance when calculating changes in spend (guardrail implementation).
Caution needs to be taken with the Shiller CAPE calculator. Because the CAPE ratio is only known now and not in the future, we can’t use future CAPE ratios with this calculator. So it does assume the current CAPE ratio moving forward which is not realistic. There is an option for you to enter the current CAPE ratio each year in column G though. I have also provided a link on this spreadsheet to see an example of the current CAPE ratio for S & P 500 index.
Managing your assets in retirement is not a set and forget thing. The forecasted results of these calculators can change greatly from year to year as your situation changes. Income or spend may be more or less than assumed. Investment returns may be greatly different from assumed. It requires at least annual reviews. One recommendation is to save your current sheet, then the following year enter your new information as if starting again on the summary page and see how the results have changed.
As alwyas, this is not personalised advice. It is just another general purpose tool that can hopefully help with some of your decision making. If you want tailored personalised advice then seek the advice of an independent financial adviser.
Reverse mortgage calculator
This calculator is one of a kind. No other free calculator goes into the level of detail you see here.
With just a few quick inputs, you will immediately see how much your reverse mortgage loan will be at various ages in the future. In addition to that, you will see how much your house will be worth (after payment of the reverse mortgage) at various ages and also with different rates of house price increase assumptions.
For more detail on reverse mortgages, have a read of this comprehensive article.
Lifetime home retirement income
Like a reverse mortgage, Lifetime home is a product that uses the equity in your home to provide an income in retirement. However, rather than getting a mortgage, you sell a portion of the equity your home. You can read more about this alternative product to a reverse mortgage here.
This is a calculator that will inform you how much your house equity may be worth each year if using this product, how much your capital gains may be, and how much of your annual spend that this product will provide for.
You can compare the results here with the results of using a reverse mortgage and see which option you may be more comfortable with.
You can have a read of my initial thoughts on the product here.
An independent financial adviser, such as myself, can help you make heads or tails of these decisions.
For personalised advice on your retirement planning needs, then get in touch for a no obligations chat to see how we may be able to add value for you.