For immediate release

7 March 2017

Dream retirement out of reach if you rely on NZ Super

AMP Financial Services Managing Director Blair Vernon says the debate around the age of eligibility for New Zealand Superannuation is the tip of the retirement savings iceberg and we have to go further.

“All the data we see says we can’t rely solely on the government to fund our retirement, regardless of the age of eligibility. The question people need to ask themselves is ‘how much savings will I have by the time I want to retire and will it be enough to fund the things I aspire to be doing in retirement?’ For most of us the answer is ‘no’, or at best ‘I hope so, but I haven’t got round to figuring it out yet’.

“The math’s gets pretty challenging pretty quickly – a married couple today gets roughly $30,000 per year on New Zealand Superannuation, but findings from a 2015 Massey University study suggest that at best that’s a bare minimum and leaves no capacity to deal with unexpected costs. This together with other international research supports the same view that a married couple in retirement who want to have more than a ‘no frills’ lifestyle need more like $50,000 per year.

“It’s not a magic bullet, but KiwiSaver is creating opportunities for savers and retirees to reach their retirement income goals and enjoy the retirement they dreamed of. It’s low cost, well governed and backed by the collective efforts of government, employers and employees.

“Sadly over 40 per cent of KiwiSaver members don’t make regular contributions, and those who do contribute might not be saving enough. The key point is that without a clear plan you probably can’t even answer the question about how much you want or need in retirement.

“We believe the best option is for every individual to look to take control of their own retirement outcomes. Many can take action today and over the next ten, twenty or thirty years put themselves in a position where they get to make their own choices in retirement – isn’t that what most of us spend our working lives looking forward to?”

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