Why returns are so important
A small increase in returns over the long-term will lead to a significant increase in the value of your
KiwiSaver at retirement. The graph below shows the difference between a 4% and 6% return on the value of
KiwiSaver at retirement after 35 years invested.
Results are simulated in this graph. The analysis assumes an investor starts saving at
age 30 with an annual salary of $52,500. Their salary rises steadily at 3% per annum until age 65 when they
retire. They contribute 2% of their salary to their KiwiSaver Scheme, and their employer contributes 2%.
Two investment return assumptions are presented. One is an average investment real rate of return of 4%, and
the other is an average investment real rate of return of 6% (all returns are after fees and inflation).
The results simulated in the graph ignore the $40 per annum fee subsidy, which will no longer be payable
from 1 April 2009. All value amounts are shown in todays dollar terms. The graph above is an illustration
and does not represent any indication of future performance.