Retirement is coming;
ready or not

Nearly half of all New Zealanders aged over 50 have no idea how they’ll fund their retirement and a “disturbing number” think NZ Super will provide all the income they need.

The Commission for Financial Capability surveyed 2,200 New Zealanders about their attitudes to KiwiSaver in April 2016.

The commission’s general manager of investor education David Boyle says the survey, together with a 2015 study, reveals a wide gap between “people's expectations about retirement and the reality”.

Boyle says too many believe NZ Super will provide enough income to support them in retirement and have done very little in the way of financial planning.

 “The worrying thing is just on 50% of non-members are relying on NZ Super or don’t know how they are going to fund their retirement,” Boyle says. “As we're living longer, we need to plan for retirement to make sure our savings and investments last as long as we do.

"There is nothing worse than having to change your lifestyle to meet your income at retirement."

The commission predicts the role of ‘private provision’ – which simply means the amount people save to provide for themselves in retirement – will increase, particularly as the population ages.  

By 2068 about 1.8 million Kiwis – more than a quarter of New Zealand’s projected population – will be eligible for NZ Super putting unprecedented pressure on the national pension scheme; the cost of NZ Super is expected to double in the next 15 years from $12.2 billion in 2015/16 to more than $20 billion in 2031.

Mercer Customer Service Manager Andrew Taylor says Kiwis need to take personal responsibility for themselves and their retirement.

“You have control of your own future; your family’s future may depend on savings you are making today,” Taylor says. “It is never too early to start thinking about and planning for retirement; start saving now no matter what age you are.

“Your retirement could last 30 years or more and while NZ Super might provide a basic standard of living, you'll need to have other savings and investments if you want to have more choices in your retirement years.” 

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