Decumulation

Kaupapahere me te rangahau | Policy and Research

Decumulation is the drawing down of savings or investments that have been accumulated over time (the decumulation in retirement of assets accumulated in pre-retirement).


Since the inception of KiwiSaver in 2007, regulators, policy makers and providers have focused on the accumulation phase of saving in KiwiSaver. However, KiwiSaver has now been in existence for more than 14 years, and it is expected that individuals approaching retirement are now doing so with larger sums of money accumulated in KiwiSaver. Therefore, the focus is now switching to decumulation and what this means from a product and policy perspective.

One area that often receives coverage when discussing decumulation is annuities, however decumulation is broader than annuities, and there are a number of non-annuity type decumulation and drawdown products that are also available. In addition, equity release is another way to decumulate assets (in this case housing wealth).

Much of the work conducted by Te Ara Ahunga Ora Retirement Commission focuses on enabling New Zealanders to retirement comfortably once they reach 65 years of age. Less well understood are the financial experiences of those nearing and past retirement age.

Our latest research has aimed to reveal 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’. Download the report.

These insights will be valuable as we look to undertake the 2022 Review of Retirement Income Policies which includes a focus on decumulation.

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.