Planning for retirement is not a one-size-fits-all exercise. Individual circumstances will vary somewhat. Life expectancy, gender, inheritance expectations (should you be so lucky!) and other factors will affect planning.

The purpose of the Equity Investment Advisers & Sharebrokers retirement calculator is to give you an approximate idea of how well you are financially postitioned for retirement now AND what you need save in order to meet your retirement income objectives.

This calculator makes a number of assumptions that will be fairly close to the mark for many and somewhat further from reality for a few.

We at Equity Investment Advisers & Sharebrokers are of the view that NZ Super (the name for New Zealand's tax payer funded universal pension) is unlikely to be available as a universal benefit in future years. It is likely to have its value reduced by one or more of the following.

• Raising the age of elgibility from 65 (this is already happening for state-funded pensions in the USA).
  
• Lowering the amount of the benefit.
  
• Income and/or asset testing to reduce the benefit to those who have income/assets above some arbitrary figure.

Tips for filling out the Equity Investment Advisers & Sharebrokers Retirement Calculator

• If you are married or have a partner, you should each fill out your own worksheet taking your status into account when entering your (possible) New Zealand Super benefit in number 2 below.
  
• This calculator works only in browsers that fully support JavaScript, such as Netscape and Internet Explorer.
  
• Type in numbers only. Don't use commas or decimals.
  
• Use the tab key or your mouse to move around in the worksheet.
  
• Moving to the next field will trigger the automatic fields to calculate.
  
• Pay attention to the "Important Note" section in the worksheet.
  
• All calculations are based on REAL returns (after tax and inflation).
  You can therefore use today's dollar values.
  
  
• Boxes outlined in a red colour cannot be edited. These are calculated for you.

1. How much annual income will you want in retirement? (Figure out your current AFTER TAX annual income just to maintain your current standard of living. Really.

Enter your current annual income after tax

70% of your current annual income after tax

1. Enter the annual (after tax) income you expect to receive during retirement from:
   

• NZ Super. The value for this, after tax (at M rates) is
  
  
  • $13,302 annually for a single person living alone. ($255.81 per week)
    
    
  • $10,232.50 annually, each, for a married couple. ($196.78 per week each)

• Employer Pension -- These are increasingly rare in NZ but if you have one enter the forecast annual pension dollar amount based on salary and years of service (in today's dollars).

• Part time income that you think you might realistically earn during retirement. While many people work past the age of 65, once past 70 the number in paid employment drops sharply. Be conservative. It is unlikely you will be able to work right up until you depart this world!

• Other. Any other income you think is probable from other sources during retirement.

This is extra amount (shortfall) you need to find each retirement year.
A negative (-) sign means you already have enough - lucky you!

Now you want an estimate of how much money you'll need in the bank the day you retire to produce the shortfall.

We have used a constant REAL RATE OF RETURN of 3% per annum. ie. The long term return you might expect after tax and inflation take their toll. eg. If inflation averages 2.5% pa and taxes at 33%, then your investments need to return a gorss average of 8.2% pa BEFORE tax and an inflation.

We have also assumed you'll live to age 85 and that you will receive NZ Super from the age of 65 (if you have elected to enter anything in that box).

1. To determine the amount you'll need to save, click on the age at which you expect to retire.
   
   Important Note - If you make any changes to this or other sections of this worksheet, you will need to re-select your answers to questions 3, 4, 5, and 6 so the form will recalculate using the new information

1. If you expect to retire before age 65, click on the age at which you expect to retire.
   (Note: This field relates to NZ Super and will remain 0 if you entered 0 as your NZ Super benefit on line 2.)

1. Enter your savings to date which are to be used for retirement purposes. Eg. Unit trusts, super funds, deposits, portfolio etc.

1. This shows the ANNUAL amount you'll need to save to meet your total additional savings target. Click on a button to vary the number of years until retirement to see how that reduces or increases the annual amount you need to save.