The KiwiSaver calculator runs these numbers for your own situation. These two examples exist so you can see exactly what a projection is made of before you trust one. Both are illustrations, not forecasts, and neither is advice. The people in them are made up. The rules and rates they use are real and are dated below.
Two examples, with every assumption written down
Shared assumptions
Scroll the table sideways to see every column.
| Assumption | Value used | Why |
|---|---|---|
| Employee contribution | 3.5%, then 4% from 1 April 2028 | 3.5% is the default rate since 1 April 2026. The legislated step to 4% lands on 1 April 2028 |
| Employer contribution | Same rate as the employee | The statutory minimum matches your rate, so it steps to 4% on the same date. Shown after ESCT is deducted, which is what actually reaches the account |
| ESCT | 30%, rising to 33% then 39% | Employer superannuation contribution tax. The rate depends on total pay, so it steps up as the salary grows: 30% throughout example 1, and in example 2 30%, then 33% from age 41, then 39% in the final year. It is why every employer figure here is smaller than the headline percentage |
| Salary growth | 3.5% a year | Contributions are a percentage of pay, so pay rises lift them every year. A flat salary would understate the total |
| Government contribution | $260.72 a year | 25 cents per dollar you contribute, capped at $260.72, for members aged 18 to 65 who mainly live in New Zealand and earn $180,000 or less. That income limit is not indexed, so a rising salary eventually ends it - in example 2 it stops at 59 |
| Inflation | 2.0% a year | The midpoint of the Reserve Bank's 1% to 3% target band. Used only to convert to today's dollars |
| Contribution timing | Spread across the year | Each year's contributions are credited with half a year of growth, which is close to what arriving every payday actually earns |
Example 1: saving for a first home over five years
Inputs. Aged 30, buying at 35. Salary $75,000, rising 3.5% a year. KiwiSaver balance today $22,000. Contributing 3.5% with a matching employer, stepping to 4% on 1 April 2028.
The fund changes partway through, on purpose. Three years in a balanced fund returning 3.5%, then, with the purchase close enough that a bad year could not be recovered from, two years in a conservative fund returning 2.5%. Both rates are after fees and after PIE tax. Dropping the risk near the end costs some growth and removes the chance of the deposit shrinking in the month it is needed.
| Line | Amount |
|---|---|
| Starting balance | $22,000 |
| Your contributions | $15,3253.5% then 4% of a salary rising from $75,000 to $86,064 |
| Employer contributions, after ESCT | $10,728$15,325 was contributed on your behalf; 30% ESCT took $4,597 of it |
| Government contributions | $1,305$261 a year for five years |
| Total contributions | $27,358 |
| Investment growth | $5,523 |
| Balance after five years | $54,881 |
| Available for a first home withdrawal | $53,881You must leave $1,000 in the account |
| That withdrawal in today's dollars | $48,802What $53,881 in five years buys at today's prices, at 2% inflation |
Two things stand out. Contributions do nearly all the work: $27,358 went in and $5,523 was growth. Over five years that is exactly what should happen, and it is the clearest argument against reaching for a high-risk fund when the money is needed soon. The upside is small and the downside can take the deposit off the table.
The other is ESCT. The employer put in $15,325, matching you dollar for dollar, but $4,597 of it went to tax before it arrived. Most people are surprised by that, and no calculator that ignores it is telling you the truth about what lands in your account.
Example 2: from age 35 to retirement at 65
Inputs. Aged 35, having just bought a first home, so the KiwiSaver balance is back to the $1,000 that had to stay in the account. Salary $80,000, rising 3.5% a year. Contributing 3.5% with a matching employer, stepping to 4% two years in. Thirty years to go, so the money sits in an aggressive fund returning 5.5% a year after fees and after PIE tax.
| Line | Amount |
|---|---|
| Starting balance | $1,000 |
| Your contributions | $173,3623.5% then 4% of a salary rising from $80,000 to $224,543 |
| Employer contributions, after ESCT | $116,217$173,362 was contributed on your behalf; ESCT took $57,145 of it |
| Government contributions | $6,264$261 a year for 24 years, then nil: at 59 the rising salary passes the $180,000 income limit |
| Total contributions | $295,843 |
| Investment growth | $368,323 |
| Balance at 65 | $665,166 |
| Balance in today's dollars | $360,018What $665,166 at 65 buys at today's prices, at 2% inflation |
Growth overtakes contributions. $295,843 went in and $368,323 was earned on top of it. Compare that with example 1, where five years produced $5,523 of growth against $27,358 of contributions. Nothing about the second person is cleverer. They had thirty years instead of five, and a fund built to use them.
The headline number is not what it buys. $665,166 at 65 is $360,018 in today's money. Both are true. The first is what the statement will say and the second is closer to what it means, which is why the calculator shows both columns and why any projection quoting only the big number is telling you half the story.
What if they had left it in a balanced fund?
Same person, same salary, same contributions, same thirty years. The only change is staying in a balanced fund returning 3.5% rather than moving to an aggressive one at 5.5% after the house is bought.
| Line | Aggressive, 5.5% | Balanced, 3.5% |
|---|---|---|
| Total contributions | $295,843 | $295,843 |
| Investment growth | $368,323 | $188,772 |
| Balance at 65 | $665,166 | $485,615 |
| Balance in today's dollars | $360,018 | $262,837 |
Two percentage points costs $179,551. That is what the balanced saver gives up by retiring on $485,615 instead of $665,166. In today's money the gap is $97,181. Nobody contributed a dollar less, missed a payment or made a mistake. The only difference is the number in the fund-type column.
The reason a small-sounding gap does this is that the whole difference lands in the growth line. Contributions are identical at $295,843 in both columns, so every dollar of the shortfall comes out of what the money earned: $368,323 drops to $188,772, close to half. Thirty years of compounding does not treat 5.5% and 3.5% as two numbers a couple of points apart. It treats them as two different curves, and they keep diverging for the whole run.
Worth sitting with: $179,551 is more than this person contributed themselves over the entire thirty years, which came to $173,362. The fund-type decision, made once at 35 and then left alone, mattered more to the final balance than three decades of their own contributions.
None of which makes aggressive the right answer for everyone. It is the right answer for this person because they are 35, they have just bought the house, and the money is not needed for thirty years. Run the same comparison over the five years in example 1 and the logic reverses completely, which is exactly why that saver moved down the risk scale rather than up.
What these examples do not do
- ESCT is included, at one rate. Employer contributions here are shown after employer superannuation contribution tax, which is what actually reaches the account. The 30% rate used applies to total pay between $70,001 and $216,000; on a lower income the rate is lower and more of the employer money lands. See Inland Revenue on ESCT.
- They assume the same return every single year. No real fund does this. Real returns arrive in a jagged line, and when the bad years happen matters, especially close to when you need the money. A steady 5.5% and a bumpy average of 5.5% do not end in the same place, and over thirty years the gap between them can be large.
- They assume you never stop. No savings suspension, no gap between jobs, no drop to a lower contribution rate, no period self-employed with no employer contribution at all.
- They assume you get the full government contribution every year. That needs you to put in at least $1,042.86 yourself each July-to-June year and to meet the age, residency and income conditions.
- They assume a steady 3.5% pay rise every year, and a career that never stalls, never takes a pay cut and never has a year out. Contributions are a percentage of pay, so this assumption quietly drives the whole projection.
- They are not a forecast of your KiwiSaver. Past returns do not predict future ones, and the rules used here can be changed by any future government.
If you want these numbers run properly against your actual balance, salary, timeframe and fund, book a free session and Cam will do it with you.
