How these calculators work

Budgeting tool

What it does

The budgeting tool works out the difference between the money you have coming in and the money going out. It tells you whether you have money left over for other expenses or for saving. If your plan shows you don’t have enough, you’ll need to adjust your spending or find ways to increase your income.

Calculation methodology

First you enter details of your current income and spending, assigning amounts to categories. Then the budgeting tool adds up all of your spending and deducts the total from your salary or earnings to work out the difference between your income and expenditure.

Results

The budgeting tool shows whether you have surplus income or a shortfall, and how much. It also shows an overview graph of your outgoings broken down into your categories, and colour-coded as per your categories.

The budgeting tool results are shown without the effect of inflation.

You can save your budget to your Sorted account so you can come back at a later date and review or update it.

Have a go

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What it does

The Net Worth Calculator works out how well off you are (your net worth) by taking into account everything you own (your assets) and everything that you owe (your liabilities). Ideally, your net worth will increase over the years as you own more and owe less.

Calculation methodology

The wealth tracker asks you for the current value of the things you own including your house, vehicle, shares, superannuation and other savings. You also enter everything you owe including your mortgage, HP, loans and credit card debt.

The calculator adds up everything you own and deducts everything that you owe. The result is your net worth.

If you wish to plan for or estimate your net worth in the future, you can enter figures for 10 years and 20 years’ time.

Results

The Net Worth Calculator shows your current net worth, and may also display your estimated net worth in 10 and 20 years’ time.

You can save your Net Worth Calculator to your Sorted account so you can come back at a later date and review or update it.

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What it does

The debt calculator shows you how long it will take you to pay off your credit card, hire purchase, or car loan debt, and the total amount of interest you will pay. It also splits the total repayments into the amount that reduces the balance and the amount that pays off the interest.

The calculator features an interactive slider, which will increase the repayment amount as you slide the bar across. As it does this, you will see the time to repay, total interest and total you will pay all reduce. At the bottom of your results graph, you will see an icon that says ‘you will pay X times the amount your borrowed’. This works by dividing the total amount paid by the initial loan amount. The figure is rounded to two decimal places, and will not appear of the result is below 1.20.

Assumptions

The debt calculator assumes your repayments stay the same each year.

Calculation methodology

First, you choose the type of debt you want to find out about: credit card, hire purchase, car loan, or personal loan. Then the debt calculator asks you to enter the amount owed and the interest rate.

• For credit cards you also enter the repayment amount. The results show the total you will pay and the time it will take to fully repay the credit card debt. The debt calculator starts with the amount owed, reduces it by the repayment amount, and adds interest each period using the interest rate, until the amount owed reaches zero. The final repayment amount is the minimum of the remaining amount owed and the standard repayment amount.
• For hire purchase and car loans you also enter details of any interest-free period, start-up and other fees, the total term and repayment frequency. The results show the minimum repayment amount.
• For personal loans you also enter the total term of the loan and repayment frequency. The results show the minimum repayment amount.
• If you have more than one credit card, more than one hire purchase, or several other loans, enter them each separately by selecting the Add another button at the bottom of the section.

If you enter your date of birth, the debt calculator determines how old you will be when the debt has been repaid.

Results

Except for credit card debt, all the results show the minimum repayment amount.

For all types of debt, the results show:

• The total amount you will pay - which is the sum of the repayments
• The total interest you will pay - which is the total amount paid less the initial amount owed
• The time to repay - which is the number of years and months it will take to repay the debt
• How old you will be when the debt is repaid.

For hire purchase and car loans, the calculator allows for periods of no repayments and no interest. It also allows for various types of fees.

You can save your debt calculator to your Sorted account so you can come back at a later date and review or update it

What if?

If you choose an increased repayment amount or a shorter loan term, the calculator repeats the exercise and shows the savings you gain (calculated as the difference between the initial total amount paid and the new total amount paid) and how much faster you would pay off the debt.

Results are shown without inflation.

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The savings calculator shows you either how much you need to save on a regular basis to reach your savings goal, or how much you will have if you save a regular amount over a period of time.

The calculator features an interactive slider, which will increase the savings amount as you slide the bar across. As it does this, you will see the interest and total amount increase. The savings term is fixed and will not be adjusted by the slider. If you are saving for a goal, the slider will increase the regular savings amount and interest, therefore reducing time to save.

Assumptions

The savings calculator assumes the following:

• Your savings stay the same each year.
• Your savings are added to each month by the amount of interest earned, calculated at a compound interest rate. (1.06^(1/12)-1)
• Interest payments are made at the end of each month.
• Inflation of 2% is assumed.

Calculation methodology

This calculator starts by asking you whether you want to either:

• Save for a goal over a period of time, or
• Save a regular amount for a period of time

Saving for a goal

If you are saving for a goal, the calculator asks you to enter your goal amount and the date you need it.

The saving calculator works out how much you need to save on a regular basis to reach your savings goal in the timeframe you specified. It allows for any amount you’ve already saved and the interest it earns, as well as the interest you will earn on your regular savings.

Results

The results show you how much you need to save each period (e.g. each week, fortnight, month or year) as well as the total interest your savings earn between now and your goal date.

If you enter your date of birth, the savings calculator can work out your age at the end of the saving period.

Results are shown with the effect of 2% inflation. To see your results without the effect of inflation, select the button ‘Inflation adjusted results?’ so it turns off. You can include the effect of inflation again by reselecting the button so it turns on. The default interest rate shown is also 2%, which will mean that the interest calculated in your results panel will show as ‘$0’. If you reduce the interest to below 2%, you will see that interest will become a negative value, as inflation of 2% means that your savings will lose value. To see interest without inflation (where there will always be a positive number), simply turn the ‘inflation adjusted results’ button off.

Saving a regular amount

If you are saving (or planning to save) a regular amount over a period of time, the calculator asks you to enter the amount and how often you save it (e.g. weekly, fortnightly, monthly or yearly). It also asks you to select an end date for your regular saving.

The savings calculator adds up the amount you save and adds interest to the balance each period until the end date.

Results

The results show you how much you will have contributed to your savings at the end date, the total interest your savings are expected to earn, and the total of your savings (your contributions plus the expected interest).

If you choose an increased savings amount, the calculator shows you either:

• How much faster you would reach your savings goal, or
• How much more you would save during the selected period.

If you enter your date of birth, the savings calculator can work out your age at the end of the saving period.

You can save your savings calculator to your Sorted account so you can come back at a later date and review or update it.

Results are shown with the effect of 2% inflation. To see your results without the effect of inflation, select the button ‘Inflation adjusted results?’ so it turns off. You can include the effect of inflation again by reselecting the button so it turns on. The default interest rate shown is also 2%, which will mean that the interest calculated in your results panel will show as ‘$0’. If you reduce the interest to below 2%, you will see that interest will become a negative value, as inflation of 2% means that your savings will lose value. To see interest without inflation (where there will always be a positive number), simply turn the ‘inflation adjusted results’ button off.

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What it does

KiwiSaver is particularly designed for two goals in particular: saving and investing for retirement or a first-home deposit. Sorted’s KiwiSaver calculator forecasts how much you could have at retirement or for a first home, based on your continued contributions at the levels you have chosen, your fund type, and how far off your goal is. It also provides an estimate of the regular income that you could get in retirement from the total lump sum in your KiwiSaver when you retire.

Assumptions

The KiwiSaver calculator assumes the following:

• Inflation is 2%.
• If you select Employed, the KiwiSaver calculator assumes your pay increases at 3.5% per year and that your contributions increase in line with your pay. For example, $200 today will be $230 in 4 years’ time. The assumed pay increase of 3.5% is included in the calculations by applying a margin to the assumed long-term rate of inflation (2%).
• If you select Self-employed or Not working, the KiwiSaver calculator assumes that your contribution amount increases each year with inflation.
• You do not suspend your savings at all.
• You receive the maximum government contribution of $521. These are included at the end of each member credit year which runs from 1 July to 30 June. (Note: To receive the full government contribution, you must be a KiwiSaver member for the entire year, from 1 July to 30 June. If you join KiwiSaver midway through the year, the partial amount you can get is prorated based on how long you’ve been a member.)
• Your investments are in a managed fund which is a portfolio investment entity (PIE). Your PIE income is taxed at either 28%, 17.5% or 10.5%, depending on your total taxable income.
• Your net return from the managed fund will vary, depending on your type of fund and your PIE tax rate or prescribed investor rate (PIR). The assumed returns are:

Calculator methodology

First, the KiwiSaver calculator asks you which goal you are saving and investing for – your first home or retirement – and how much time there is before you would like to reach it. The tool then asks for your age, your employment status, your salary, and how much you contribute to KiwiSaver. It then asks about your KiwiSaver account: your current balance, your fund type, and any additional contributions you make, either regularly or as a lump sum.

Any employee and employer contributions are added to any current value of your KiwiSaver accounts, as are the assumed investment earnings and any government contributions due each period. The amounts are added up each pay period until you reach the age of 65. This is your total.

Next, the KiwiSaver calculator works out the regular income amount that you could get from the total during your expected retirement period.

Adjusting for inflation

The total amount shown is the estimated buying power of the total amount, including inflation at 2%. For example, by the time you reach age 65 your KiwiSaver statement might show a total balance of $597,000. However, as the price of everything will have increased by that time, you would only be able to buy $271,000 worth of goods at today's prices.

Results

The KiwiSaver calculator results show the total sum you would have in your KiwiSaver account at retirement and the regular income that you could get from that sum during your planned retirement period. If you are planning for your first home, it shows how a withdrawal of a certain amount at a given time will affect your retirement balance.

Results are shown with the effect of 2% inflation. You can de-select the inflation toggle to see your results without the effect of inflation.
Results are also shown with your retirement years, and the effect of drawing down your KiwiSaver regularly over time. You can turn this off or on as well.

You can save your KiwiSaver calculator to your Sorted dashboard so you can come back at a later date and review or update it. You can also sync your calculator inputs so that the information you entered – your age, salary and KiwiSaver balance – is available when you start another Sorted tool, which will save you time.

What if?

When you see your results, you can alter them for the better in a number of ways. Under the ‘Change your future’ tab, you can, for example, change your contribution rate, your fund type, or your retirement years. This can affect your forecast results significantly.

Have a go

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The investor profiler gives you your investor type, a typical mix of investments and the sorts of results you can expect. It also shows the dramatic difference that regularly adding to investments makes.

Calculator methodology

The investor profiler has seven multiple-choice questions that gather your details. The questions are about how much time you have to invest, how much capacity you have to invest, and how much risk you are comfortable taking.

Results

Based on your answers, the investor profiler identifies you as one of five investor types: aggressive, growth, balanced, conservative or defensive. These are terms generally used in the financial services industry, making it easier for you to discuss with a professional adviser.

For each type, a typical mix of investments is shown with the results you might expect. The investor profiler also displays graphs of a possible result and the range of results you could have.

You can use the dropdown selection box to compare your results with other investor types, too. If you save your investor profiler to your Sorted account, you can come back to it later and review or update it.

Assumptions

• Each question and answer has been weighted in terms of importance (time questions: 40%, capacity questions 20%, personality questions: 40%).
• Fees are estimated to be 1%.
• Taxes are based on current PIR rates and depend on how the different kinds of investments are taxed.
• Inflation is assumed to be 2% – the midpoint of the Reserve Bank’s inflation target of between 1% and 3%.
• The projected returns are based on the investment outlook and analysis from Sorted’s actuaries. Results over different periods will vary.
• The projected returns are only estimates and are no guarantee of investment performance. An investment’s past performance does not necessarily indicate how it will perform in the future.

Disclaimer

• The information provided by the investor profiler is a guide only and is not intended as investment advice. We recommend that investors always seek professional advice.
• The returns shown for the various mixes of investments are subject to risks and are not guaranteed. Returns will vary depending on the performance of individual investments.
• We do not accept any liability for any loss or damage of any kind arising out of the use of, or reliance on, the information provided on these pages including, without limitation, any loss of profit or other damage, direct or consequential.
• Please also read our terms and conditions.

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