Kiwis bank on late retirement
Most working New Zealanders expect to retire later than their Australian counterparts, a new study by Mercer Wealth Solutions has found.
The KiwiSaver Sentiment Study of 508 working New Zealanders found that although 39 per cent would prefer to retire before they reach 60, most (65 per cent) do not believe they will be able to until they are at least 65. Only 9 per cent of New Zealand respondents said they would like to retire before reaching 50.
On this side of the Tasman, however, retirement appears to be a more attractive and achievable option. Just over half (51 per cent) of Australians said they would prefer to retire before 60, with 44 per cent saying they expect to work until they are 65 or older. About 17 per cent said they would prefer to retire before they turn 50.
Mercer New Zealand head Bernie O’Brien said the study highlights important differences in retirement expectations on both sides of the Tasman and a concerning gap between when New Zealanders would like to retire and when they will actually be able to.
“Mercer’s study tells us that more Aussies than Kiwis want to retire before age 60 and more Kiwis than Aussies expect to continue working beyond age 65. We think the differences reflect the fact that there’s been an increase in voluntary participation in Australia’s 15-year-old retirement system, which provides an achievable model for Kiwis to aspire to.”
According to Mercer, more New Zealanders (22 per cent) than Australians (13 per cent) are likely to rely on government assistance when they retire. Superannuation is expected to account for 43 per cent of Australians’ retirement funding, but just 27 per cent for New Zealanders’.
O’Brien said that the New Zealand superannuation scheme, KiwiSaver, could potentially transform the nation’s retirement landscape — as the Australian scheme has done here.
“Given the early groundswell of support for KiwiSaver and the Australian experience, it is reasonable to make some conservative predictions. In the future, as KiwiSaver evolves, New Zealanders will be more confident in their ability to retire earlier and will expect a greater level of comfort in retirement.”
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