Decumulation
The 2022 RRIP investigated decumulation – the process by which savings and investments are used to pay for retirement – “drawing down savings.”
Research found that more education is required to support New Zealanders using their savings in retirement, including guidance and “rules of thumb” for spending their KiwiSaver.
Additional information and resources
A paper commissioned for the 2019 RRIP provided an assessment of decumulation of retirement savings and other assets. Download the paper.
Another report from the 2019 RRIP also considered decumulation, and considered decumulation models available in a number of OECD countries. Download the report.
The 2016 RRIP looked at decumulation from a number of perspectives, including surveys, reports and interviews with the public.
The Retirement Income Interest Group (RIIG) of the New Zealand Society of Actuaries have produced a number of reports considering decumulation.
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How to make drawdown a success - NZ Society of Actuaries
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Decumulation rules of thumb: An update - NZ Society of Actuaries
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Longevity in New Zealand: Implications for retirement income policy - NZ Society of Actuaries
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Retirement income policy in New Zealand: A discussion of context and principles - NZ Society of Actuaries
Asset drawdown (decumulation) and paid work profile of Pre- and Post-Retirees
This research reveals more about the experiences of work, income, expenses, and financial advice among those close to retirement and those already retired. Of specific interest was how those aged 65 accessed and spent any savings and income (including Kiwisaver), referred to as ‘decumulation’.
Other publications
The research listed below does not represent the views of TAAO. Different approaches, methods, and samples were used in these studies and this should be taken into account when interpreting the results.
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Noviarini, J. (2020). Essays on retirement wellbeing in New Zealand (Doctoral dissertation, University of Otago).
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Lissington, R. J. (2018). How prepared are New Zealanders to achieve adequate consumption in retirement? (Doctoral dissertation, Massey University).
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Bailey, J. V., & Winkelmann, K. D. (2021).Chapter 6: Asset decumulation in retirement. In Defined Contribution Plans: Challenges and Opportunities for Plan Sponsors. CFA Institute Research
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MacDonald, B. J., Jones, B., Morrison, R. J., Brown, R. L., & Hardy, M. (2013). Research and reality: A literature review on drawing down retirement financial savings. North American Actuarial Journal, 17(3), 181-215.