Currently, the New Zealand Government Superannuation commences when we turn 65 and is not means tested. A means test is a determination of whether an individual or family is eligible for government assistance, based upon whether the individual or family possesses the financial means to do without Government assistance.
With the population experiencing longer life-spans than ever before and a large bulge in the populace about to turn 65, national superannuation in its current form may be unaffordable for future New Zealand governments. Unlike our Trans Tasman neighbour, employers have not been funding a compulsory retirement scheme for many years, easing this inevitable burden on taxpayers and Government alike.
A number of factors greatly impact superannuation as it stands in New Zealand. Currently, all of us are automatically entitled to National Superannuation whilst some political parties have already signalled that they will likely increase the age of entitlement upward from the current 65.
With these potential changes in view, start thinking about what the future will look like in your retirement.
It may be that successive governments end up having to means-tested national superannuation. For those of us retiring in the next 20 years, this means the lifestyle desired in retirement may be difficult to achieve and sustain… “Sell the beach house?”
Do you know how much you and your family will need to live the lifestyle you desire?
If you are self employed or own a business are you saving enough for your retirement?
If you don’t know the answers to these questions are you on your way to a financially difficult retirement?
Living the lifestyle you wish for in retirement starts with effective planning, now.
Speak to the team at Sumpter Baughen today to discuss the options and plan a strategy that will achieve your retirement dreams.