You can’t rely only on NZ Superannuation
NZ Superannuation is currently available as an allowance paid to retired New Zealanders but there is no indication that the scheme will remain the same in future years.
NZ Super – rates as at 1 April 2015.
|Qualifying as||Weekly rate||Annual rate|
|Single – living alone||$374.53||$19,476|
|Single – sharing||$345.72||$17,977|
|Married, civil union or de facto couple – both partners qualify||$576.20||$29,962|
|Married, civil union or de facto person – partner not included* (before 1 October 1991)||$288.10||$14,981|
Source: Work & Income
Effective 1 April 2015 (taxed at M code, net rates)
The days when everyone retired abruptly at age 65 are long gone and the days of age 65 as the age of eligibility for New Zealand Superannuation are potentially numbered.
In the last Census (2006), there were 5 people aged between 15 and 64 for everyone over 65. By 2020 this is projected to be 4:1, by 2030: 3:1 and by 2050: 2:1
Additionally, most people underestimate the impact inflation will have on their retirement plans. If you calculate how much money you might need in retirement and take account of inflation you may find that how much you need in retirement is very different from what you are expecting.
The following example may help you to understand the real implications of inflation. A 3% inflation rate is being used. If you need $50,000 a year to live on now, you will need $67,196 in just 10 years and in 20 years you would need $90,306.