Default Settings

(a) Retire age is 65.

(b) Death age is 90.

(c) Tax rate is based on Income.

(d) Prescribed investor rate is based on Income.

(e) Annual inflation rate is 3%.

(f) Growth rates (i.e., annual rates of return) are subject to tax.

(g) With KiwiSaver:

• Employee contributes 3.5% of gross salary
• Employer contributes 3.5% of gross salary, less tax

(h) With KiwiSaver or Managed Funds, the fund type is Growth.

(i) With KiwiSaver or Managed Funds, growth rates (nett of fees) by fund type are:

• Conservative 2%
• Moderate 4%
• Balanced 8%
• Growth 10%
• Aggressive 12%

(j) With KiwiSaver or Managed Funds the balance is re-invested in a lower risk fund type at retire age:

• Was Aggressive or Growth, now Balanced
• Was Balanced, now Moderate
• Other types aren't changed

(k) With Shares, Cash or Term Deposit, growth rates are:

• Shares 5%
• Cash 1%
• Term Deposit, as specified

(l) With Term Deposit the balance is re-invested in a cash saving account at or after retire age.

(m) Projected income:

• Is expressed as a future value
• Is inflation indexed
• Includes NZ Super (single rate). If projections are for a couple, change
• Excludes Term Deposit if > 1 month remaining on last fixed term at specified retire age
• Includes Term Deposit if it comes up for re-fixing one month prior to specified retire age

(n) At death age the balance of specified investments is zero.

(o) Current Age <= Retire age <= Death age

Assumptions

(1) From now until death age:

• Growth rates are constant
• Inflation rate is constant
• Tax rate is unchanged
• PIR rate is unchanged
• No cost for switching funds

(2) Qualifies for NZ Super, age permitting.

(3) Qualifies for KiwiSaver tax credit, income permitting.

(4) With selected investments (excl. Term Deposit):

• Doesn’t stop savings to any before retire age
• Doesn’t withdraw funds from any before retire age
• Doesn’t make lump sum payments to any before or after retire age
• Invests savings as a lump sum at the end of each year
• Adjusts annual savings (index’s them) at the specified rate of inflation

(5) With Term Deposit:

• Interest is credited at end of each term
• Doesn’t make regular or lump sum payments
• At each maturity, re-invests interest and principal at the specified term

(6) Income is gross annual amount.

(7) Your current age begins as of today.

(8) If saving regularly, has income.