Drawdown strategies explained: four ways to spend your retirement savings

There is no single best way to spend your savings in retirement, only trade-offs. We compare four rules: the same amount each week, a fixed percentage of the balance, guardrails, and spending down by an age. For a couple with $450,000 at 65 plus NZ Super, the same amount each week gives a steady $1,091 a week (including $854.08 of NZ Super) that lasts to 95 in 9 of 10 simulated markets. A fixed 5% starts higher at $1,285 but slips to about $1,021 by 85. Guardrails start at the same $1,091, then trim or lift pay in 10% steps, and lasted to 95 in 99% of markets. Spending down by 90 starts at $1,221, then drops to NZ Super alone. All figures are in today's dollars, from this site's engine. Rules checked 12 November 2026.

The four rules in plain words

Every drawdown rule answers one question: how much do I take out this year? The four we compare on the drawdown strategies calculator answer it in different ways.

1. The same amount each week

You take the same amount every year in today's dollars, so your pay rises with prices. We set it at the most that lasts to your planning age (95 by default) in 9 of 10 of our 1,000 simulated markets. It is the closest thing to a pay cheque. The catch: in good markets you leave money unspent, and in the worst 1 in 10 the money runs out before the end, leaving you on NZ Super alone.

2. A fixed percentage

Each year you take a set share, 5% by default, of whatever the balance is at the start of the year. Because you only ever take a share of what is left, the money never runs out. The cost is that your pay moves with markets, and if the percentage is above what the fund earns after inflation, it drifts down over time.

3. Guardrails

You start at the same safe pay as the same amount each week. Once a year you compare your savings with the balance the plan expected by then, with steady returns. If they are below 80% of plan, you cut your pay by 10%; if above 120%, you raise it by 10%. After any change the plan is reset to the new pay. There is at most one change a year, pay never falls below NZ Super alone, and there are no changes once the planned balance is under 2 years of draws. This is our own plan-relative rule; the classic Guyton and Klinger rules compare withdrawal rates instead, which cuts pay in a plan that spends down even when markets behave. Our guardrails guide walks through it year by year.

4. Spend down by an age

Each year you divide what is left by the years remaining to a chosen age (90 by default), with the expected return built in. It pays the most early on, but by design the savings are gone at that age, and you live on NZ Super after. It is the same idea as the "fixed date rule" in the Sorted retirement navigator, which the Retirement Commission says suits "those planning to rely on NZ Super after a certain period".

Side by side: a couple with $450,000

Here is our engine's result for a couple who both get NZ Super ($854.08 a week combined, net at the M tax code, from 1 April 2026) and have $450,000 at 65. Each strategy faces the same 1,000 markets. Weekly figures include NZ Super and are in today's dollars.

"Poor market" is the 1 in 10 worst result at that point; "typical" is the middle result. Take NZ Super off to see what the savings themselves pay in the first year: $236 a week for the same amount, $431 for the fixed 5%, $236 for guardrails (the same safe pay) and $367 for spending down.

Over the 30 years the middle market pays out about $370,200 in total under the same amount each week and under guardrails, $369,925 under the fixed 5% and $472,999 under spending down by 90. Spending down pays the most in total because it is the only rule that deliberately empties the account.

A single person with $200,000

The pattern holds for smaller savings. For a single person living alone ($555.15 a week NZ Super) with $200,000 at 65:

Notice how much of each figure is NZ Super. For this person, $555.15 of the $660 is NZ Super, so the choice of rule moves the weekly pay by tens of dollars, not hundreds.

How we test the strategies

We run every strategy through the same 1,000 simulated markets, so the differences come only from the rule. Our settings:

• Return after 65: an average of 2.5% a year after fees and tax. This is the "h" assumption in Schedule 7A of the Financial Markets Conduct Regulations 2014, which KiwiSaver annual statements use for every fund type after 65.
• Swing: each year's return is drawn around that average with a standard deviation of 6%. This swing is our assumption, not an official figure, and you can change it on the calculator.
• Inflation: 2% a year, also from Schedule 7A. Everything is shown in today's dollars, so $1,000 a week at 85 buys what $1,000 buys now.
• Planning age: 95, not the Schedule 7A age of 90. Our how long will I live guide explains why.
• NZ Super: added at the net rates set in law. It rises with prices in our model, which is cautious because the wage floor often lifts it faster.

We report the level a strategy holds in 9 of 10 markets, not the average market. An average is a coin toss: half the time things turn out worse. The methodology page has the formulas.

Which strategy suits whom

Our engine gives each strategy a plain verdict on each measure. For both examples above it found:

• Steadiest pay and best in a poor market: the same amount each week. You know what you will get, which makes budgeting simple.
• Lasts longest: the fixed percentage. It cannot run out, though in a long run of poor years the pay gets thin.
• Most early on: the fixed percentage, with spending down close behind.
• Most paid in total: spending down by 90.

Guardrails pays the same as the same amount each week in a typical market, but lasted to 95 in 99% of markets instead of 90%, at the cost of small cuts in poor ones. Changes come in planned 10% steps: the typical market saw one cut and one raise in 30 years.

The Retirement Commission describes who the Sorted navigator's rules suit, and the ideas carry across. A rule that pays more early suits people who want to spend more in their active years. A steady, inflation-linked amount suits people worried about living a long time or wanting to leave something. Spending down to a date suits people happy to rely on NZ Super after a certain age. Our safe withdrawal rate guide covers Sorted's four rules in detail.

A few questions help you choose:

1. Could you live on NZ Super alone if you had to? If yes, the risk of running out matters less and you can spend more early.
2. Do you need a steady amount for fixed costs? Then the same amount each week, or guardrails, fits better than a fixed percentage.
3. Do you want to leave money behind? In our typical market the same amount each week, the fixed percentage and guardrails each left about $106,000 to $108,000 at 95; spending down left nothing.
4. Will your spending fall as you age? Many people's does. Our main retirement pay calculator lets you set spending by age.

Why NZ Super changes the picture

Most overseas drawdown research assumes your savings are your only income. In New Zealand, NZ Super is a floor that does not depend on markets and lasts for life. The Retirement Commission's 2022 paper on decumulation calls NZ Super "an annuity", because it pays an income for life and protects against longevity, investment and inflation risk.

That floor makes the variable rules much easier to live with. In our couple example, the fixed 5% rule pays $1,285 a week in the first year, and its lowest pay in a poor market is $924. That is a 28% fall in total income. The savings part alone falls from $431 to about $70, a fall of 84%. NZ Super carries the rest.

It also means running out is not the cliff it is in some countries. If the same amount each week does run out in a poor market, you drop back to NZ Super, not to nothing. That is still a big drop for most people, which is why we test at 9 in 10 markets rather than the average.

Check your own NZ Super with the NZ Super calculator; the rate depends on whether you live alone, share, or are in a couple.

Putting a strategy into practice

Most New Zealanders draw down from KiwiSaver or a managed fund, and most providers let you set up a regular withdrawal. The Retirement Commission's 2022 decumulation paper notes that drawdown in New Zealand is mostly "self-directed": you choose the amount and the fund.

• Same amount each week: set a regular withdrawal and lift it once a year by inflation.
• Fixed percentage: once a year, work out the percentage of your balance and reset the regular withdrawal.
• Guardrails: once a year, compare your balance with the planned balance for your age. Cut 10% below 80% of plan, raise 10% above 120%, and start a new plan after any change.
• Spend down by an age: once a year, divide your balance by the years left to your chosen age, adjusted for returns. Our calculator shows the amount.

Whichever you pick, review once a year. Keep a cash buffer of a few months' withdrawals so a bad month in markets does not force you to sell. Our sequence of returns guide explains why the first few years matter most.

This is general information, not financial advice. A licensed financial adviser can help you choose a strategy for your situation.

Questions

Which drawdown strategy gives the most money?

Over a whole retirement, spending down by an age paid the most in total in our examples, because it is the only rule designed to empty the account. Per week early on, a fixed percentage paid the most. The same amount each week gave the steadiest pay.

Can a fixed percentage strategy run out?

No. You only ever take a share of what is left, so there is always something left. But if the percentage is higher than the fund earns after inflation, the amount you get shrinks year by year.

Is spending down by 90 risky?

It is a deliberate choice: you spend more early and live on NZ Super after 90. Stats NZ's cohort tables give a woman turning 65 in 2026 about a 50% chance of reaching 90, so it suits people comfortable with NZ Super alone in their 90s.

Do the figures include NZ Super?

Yes. Every weekly figure adds NZ Super at the 1 April 2026 net rate at the M tax code: $854.08 a week for a couple, $555.15 for a single person living alone.