Changes to the Superannuation age : thoughts?

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Forums › Finance and wealth management › Changes to the Superannuation age : thoughts?

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#1735435 12-Mar-2017 21:13

larknz: A lot of people forget that us poor old baby boomers have already had to postpone our retirement to pay for the pre baby boomer generation. When I started work the retirement age was 60.

But a lot of us remember the "true" meaning of that story. The baby boomers brought in the earlier retirement age which forced a lot of people to retire earlier as many organisations enforced the official retirement age. Others took that "early" retirement because it was still a good option. This opened up lots of better paid jobs so the baby boomers moved up the job ladder more quickly. So they got the benefit of those freed up jobs. They then put the retirement age back up to 65 when they were getting closer to 60 so they could keep amassing riches.

Another story is that it is the fault of the generation that grew up in the Depression and were overly focused on material wealth as security against war and recession. Their children, the baby boomers, took this to heart and have been amassing wealth ever since.

Which of the many conflicting stories are we to believe?!

Fred99

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#1735440 12-Mar-2017 21:26

shk292:

The problem is there will be those who can't save / won't save, and they can't be left to starve. So the ones who do save will also be the ones who pay for the ones who haven't.

Any means testing of national pension is just extra incentive not to make your own provisions

Or very good added incentive to hide assets and/or income.

larknz

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#1735444 12-Mar-2017 21:28

The eligible age for a pension was dropped to 60 in 1939. So you can hardly blame the baby boomers. Prior to this the eligible age was 65, the same as today.

Fred99

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#1735445 12-Mar-2017 21:33

larknz: The eligible age for a pension was dropped to 60 in 1939. So you can hardly blame the baby boomers. Prior to this the eligible age was 65, the same as today.

...unless you're under 40 now.

RUKI

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#1735451 12-Mar-2017 22:02

shk292:.......

Be careful what you suggest re different ages for different ethnic groups!

FYI: there are type of work in Russia where you get your pension at the age of 45 (if you still alive). There are places and activities where people wear out so fast that they do not last long. I know what I am talking about, and no remedy does exist to make those people life longer, unfortunately...

Pension age of 65 is way too long. Russian women get pension at the age of 55. To that age many have carried out the amount of work millions of ladies in other countries would a) never accept b) would not be able to carry out and look after their man and their children at the same time ....

So to be fare it has also be gender specific...

tdgeek

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#1735498 13-Mar-2017 05:23

shk292:

tdgeek:

The best way to manage retirement is compulsory retirement savings. If you wish to get 15 years pension, you save 15/40, hopefully including a scheme that can return more than inflation (to give you more years, or a better 15 years)

Then its out of the Govt hands. Govt can say that we budget x% for pensions, so reduce tax by that, as currently our taxes are funding pensions. Make the deductions tax free, and tax the pension or make the deductions taxable and doing tax the pension. The retirement age will cease to exist, and its user choice when they retire.

The the rich ones won't be ripping off the system, but to be fair, they paid the tax that funds pensions so why cant they get them?

The problem is there will be those who can't save / won't save, and they can't be left to starve. So the ones who do save will also be the ones who pay for the ones who haven't.

Any means testing of national pension is just extra incentive not to make your own provisions

Where I was heading was compulsory retirement savings. Like Kiwisaver, but compulsory.

That allows a few benefits. If the person died prematurely, the proceeds go to next of kin, same if they died before the plan ran dry post retirement. The ones whose plan ran dry while still alive is a problem. Means testing, none of this hide the assets palava. Folks of that age can draw on the home if its owned as well. Those with no home asset will be left over, so the Govt would need to top up, you would hope that at that age, the volume would be low.

There are many ifs and buts though, but the people, if they cannot save, have to. The lower socio economic people, they will probably have a working life approaching 50 years, so that extra 10 helps.

Fred99

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#1735524 13-Mar-2017 08:30

tdgeek:

Where I was heading was compulsory retirement savings. Like Kiwisaver, but compulsory.

Oh right - that was done by Labour in 1975 - then reversed by National when Muldoon was elected.

Partisan politics sabotage long-term planning - not just in pensions.

I doubt that English's plans to increase the age of entitlement to national super to 67 will survive unscathed the 25 years between now and when they're due to be fully implemented.

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tdgeek

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#1735535 13-Mar-2017 08:58

Fred99:

tdgeek:

Where I was heading was compulsory retirement savings. Like Kiwisaver, but compulsory.

Oh right - that was done by Labour in 1975 - then reversed by National when Muldoon was elected.

Partisan politics sabotage long-term planning - not just in pensions.

I doubt that English's plans to increase the age of entitlement to national super to 67 will survive unscathed the 25 years between now and when they're due to be fully implemented.

Yep, a quarter of a century to fix an issue. Much better to ease a change in now, and allow it to come into affect over time. Say they started tomorrow. Those who are working will have whats left of the working life funded by themselves, the rest (start work date to now) is funded by Govt as the taxes have already been gathered from that same worker

While I dont believe all this baby boomer BS, bringing in a change in 25 years is waiting till most of the BB's have gone, and then extending retirement age for those left. Although as I read the other day, the millenials are right up there as a population %

Geektastic

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#1735907 13-Mar-2017 18:01

mattwnz:

SJB:

If you claim NZ Super, you cannot also get the UK State pension (no matter that you may have contributed hugely to tax in both nations...!). Alternatively you can opt for the UK pension and forgo the NZ pension. That does not affect a private or company scheme you may have in addition.

I believe you can get both a UK pension and NZ Super. There's info on the NZ Super site. However the NZ Super amount is reduced by the amount of UK pension you get.

As the UK pension paid to anyone in NZ never changes (ie it is the same from day 1 until you die) NZ Super is a good way of topping it up and possibly keeping up with inflation.

I believe when you apply for NZ super, you are required to apply for the UK one as well. Lets just say it is an absolute PITA to do, as you will know if you deal with any UK government dept or financial institution. A family member did, and I think they qualified for about $5 pounds a year of UK super as they only worked for a short time in the UK. But the paper work and hassle involved was madness, and imagine it cost far more to administer ,than was worth it.

In effect you do not get both.

Under the direct payment method you can choose to have your State Pension paid directly into your own bank account. Your New Zealand Superannuation or Veteran’s Pension is reduced by the amount of your State Pension. The two pensions together add up to an amount that is similar to the full rate of New Zealand Superannuation or Veteran’s Pension.
Under the special banking option, you can choose to have your State Pension paid into a special bank account that only Work and Income and the bank can access. In return, you get the full amount of New Zealand Superannuation or Veteran’s Pension."

However - none of that is affected if you have a non-State pension in the UK. That would be treated as income and taxed in the usual way I believe.

surfisup1000

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#1736423 14-Mar-2017 17:17

RUKI:

FYI: there are type of work in Russia where you get your pension at the age of 45 (if you still alive). There are places and activities where people wear out so fast that they do not last long. I know what I am talking about, and no remedy does exist to make those people life longer, unfortunately...

I was wondering about who this works for those involved in heavy labour ... it seems unfair to make them work as long as those in sedentary roles.

Pretty hard to quantify this as a policy though.

mattwnz

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#1736427 14-Mar-2017 17:35

Geektastic:

mattwnz:

SJB:

If you claim NZ Super, you cannot also get the UK State pension (no matter that you may have contributed hugely to tax in both nations...!). Alternatively you can opt for the UK pension and forgo the NZ pension. That does not affect a private or company scheme you may have in addition.

I believe you can get both a UK pension and NZ Super. There's info on the NZ Super site. However the NZ Super amount is reduced by the amount of UK pension you get.

As the UK pension paid to anyone in NZ never changes (ie it is the same from day 1 until you die) NZ Super is a good way of topping it up and possibly keeping up with inflation.

I believe when you apply for NZ super, you are required to apply for the UK one as well. Lets just say it is an absolute PITA to do, as you will know if you deal with any UK government dept or financial institution. A family member did, and I think they qualified for about $5 pounds a year of UK super as they only worked for a short time in the UK. But the paper work and hassle involved was madness, and imagine it cost far more to administer ,than was worth it.

In effect you do not get both.

Under the direct payment method you can choose to have your State Pension paid directly into your own bank account. Your New Zealand Superannuation or Veteran’s Pension is reduced by the amount of your State Pension. The two pensions together add up to an amount that is similar to the full rate of New Zealand Superannuation or Veteran’s Pension.
Under the special banking option, you can choose to have your State Pension paid into a special bank account that only Work and Income and the bank can access. In return, you get the full amount of New Zealand Superannuation or Veteran’s Pension."

However - none of that is affected if you have a non-State pension in the UK. That would be treated as income and taxed in the usual way I believe.

Yes you don't get both, but you need to apply for both, which is which is a huge PITA if you have ever had to deal with UK government departments.. If you don't apply for the UK one, I believe you can also get your NZ one docked by the amount you would have got from the UK one.

JayADee

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#1736600 15-Mar-2017 04:43

surfisup1000:
RUKI:

FYI: there are type of work in Russia where you get your pension at the age of 45 (if you still alive). There are places and activities where people wear out so fast that they do not last long. I know what I am talking about, and no remedy does exist to make those people life longer, unfortunately...

I was wondering about who this works for those involved in heavy labour ... it seems unfair to make them work as long as those in sedentary roles.

Pretty hard to quantify this as a policy though.

Yes a friend of mine is a 63 year old plumber and another friend is a 65 year old builder; then there is stress too, with some jobs more stressful than others and also some people can carry on well much longer than others. I think the limit by age is the only practical way to do it though otherwise you'd have to be looking at every individual's circumstances and health and I suppose that's what the 'sickness benefit' is for. (Though a means tested sickness benefit isn't great if you ask me, especially one that low; it just guarantees poverty for people with long term illness)

dickytim

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#1736605 15-Mar-2017 06:12

surfisup1000:

RUKI:

FYI: there are type of work in Russia where you get your pension at the age of 45 (if you still alive). There are places and activities where people wear out so fast that they do not last long. I know what I am talking about, and no remedy does exist to make those people life longer, unfortunately...

I was wondering about who this works for those involved in heavy labour ... it seems unfair to make them work as long as those in sedentary roles.

Pretty hard to quantify this as a policy though.

But generally the people who work in an office, less physically demanding jobs would be earning more, so it would seem unfair that these other workers who contribute less on a whole would get potentially more.

Just the other side of the coin.

Geektastic

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#1741637 17-Mar-2017 11:21

This is an interesting article on something that we could look at here in some form to encourage people to look after their needs in retirement.

If this sort of option were available, it would be reasonable to consider means testing some or all of the state payment, reducing the burden.

TeaLeaf

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#1756283 4-Apr-2017 13:12

Digging it out of the closet :-)

I think most people now are of the realisation their generation will get screwed over so are saving for their retirements earlier, or at least a lot more people than of my parents generation it seems.

One thing I just dont get is, if we are moving the age from 65-67 in 20 years time, why not just phase it in now? Of course it would have negative voting impacts, but so would have John Key not creating a lending bubble on top of the US lending bubble during the GFC. At some point some politician in NZ has to be the one to take one for the team?

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