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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#1733269 8-Mar-2017 20:05

JimmyH:

I think it was inevitable. With the aging population, the costs were climbing sharply and this is one way to soften the hit the government's finances take.

Personally, I would rather have the age raised to 67 or 68 and have some confidence that the scheme was affordable and would be there when I eventually need it, that run with a much lower age and risk something more drastic having to be done. Also, I would greatly prefer rasing the age to other options like cutting the rate or a complex and expensive (and potentially avoidable) system of means testing being put in place.

Plus, the rising age doesn't mean that you have to wait longer to retire. If you save your pennies then you can retire earlier if you can afford it. I'm trying to arrange my affairs so that it would be feasible for me to retire at 60 if I want to. Irrespective of the super rules. Whether I can manage it is, or course, another question.

The rise from 60 to 65 a few years ago didn't seem to be too problematic. I don't see why the increase to 67 should be.

]Or maybe 70, 73, 76??

tdgeek

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#1733271 8-Mar-2017 20:09

MikeB4:
Geektastic:

MikeB4:

Geektastic:

BTR:

Personally I like the idea of 65. We already spend most of our lives working why make it even longer? People should be able to enjoy retirement not reach the end of their working life and only have 10 years until they kick the bucket.

The average life expectancy isn't increasing so why increase the retirement age.

You can retire at 35 if you can arrange it. It's not a compulsory retirement age...!

yep, I retired in my forties.

Although - without intending to be personal - I presume that medical issues may have contributed?

I certainly changed the what and how of my work once I had my heart surgery.

You are right, and no you aren't being personal, when I became disabled we decided our financial position was such that I should retire to concentrate on getting better, I also decided it was not fair on my employer as I felt was unable to give them what they deserved.

I draw no benefits and my medical treatment is private even though I am one of those dreadful baby boomers.

So this is all your fault. And mine. When I read that form in the womb, I should not have signed up... :-)

mattwnz

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#1733275 8-Mar-2017 20:15

tdgeek:

Tax everyone, so everyone gets it. Or make it user pays, so everyone is not taxed for super and they provide their own compulsory super, aka KS or other compulsory savings

Kiwisaver no doubt will become compulsory once they hit a certain number of signups. It is inevitable. Especially as they removed the kickstart incentive to join, as once it is compulsory there is no incentive needed. I also wouldn't be surprised if they remove the tax credits. They have already halved them.

mudguard

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#1733279 8-Mar-2017 20:32

BTR:
Personally I like the idea of 65. We already spend most of our lives working why make it even longer? People should be able to enjoy retirement not reach the end of their working life and only have 10 years until they kick the bucket.

The fundamental problem is that there isn't any choice. Every year delayed makes the problem worse for the following taxpayers. Imagine what the personal tax rates would need to be when we go from eight workers for one on super, to four to one.
I think what I find frustrating is the argument about those paying taxes all their lives deserve it, it's not like that money had been put in a pot for your retirement. I'm fairly certain I will be paying tax all my life too but with less certainty over the availability of superannuation.
Something has to be done.

tdgeek

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#1733281 8-Mar-2017 20:36

mattwnz:

tdgeek:

Tax everyone, so everyone gets it. Or make it user pays, so everyone is not taxed for super and they provide their own compulsory super, aka KS or other compulsory savings

Kiwisaver no doubt will become compulsory once they hit a certain number of signups. It is inevitable. Especially as they removed the kickstart incentive to join, as once it is compulsory there is no incentive needed. I also wouldn't be surprised if they remove the tax credits. They have already halved them.

Sam here. Its no different to a home budget, it needs to add up

tdgeek

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#1733283 8-Mar-2017 20:40

mudguard:
BTR:

Personally I like the idea of 65. We already spend most of our lives working why make it even longer? People should be able to enjoy retirement not reach the end of their working life and only have 10 years until they kick the bucket.

The fundamental problem is that there isn't any choice. Every year delayed makes the problem worse for the following taxpayers. Imagine what the personal tax rates would need to be when we go from eight workers for one on super, to four to one.
I think what I find frustrating is the argument about those paying taxes all their lives deserve it, it's not like that money had been put in a pot for your retirement. I'm fairly certain I will be paying tax all my life too but with less certainty over the availability of superannuation.
Something has to be done.

Currently, the taxes paid include expenditure for retirement pensions. Its fine to remove those tax payments and pensions and replace them, but for everyone working at the moment, some of the taxes they have paid include that benefit. They also include medical benefits, but pensions are a tax payment to be received later, whereas many tax payment spends are for today.

frankv

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#1733287 8-Mar-2017 20:54

AFAICT, you've all swallowed the capitalist/progressive line that in some way we have to earn our retirement.

One of the great promises of automation was that we would get increased leisure time... instead, we're we're being told that our children will have to work for another 2 years. Why?

Because, apparently, we have to pay someone to live. Why do we have to pay? Who gets the benefit of those extra two years of work?

We are being treated as a herd of "human resources", to be worked until we drop.

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tdgeek

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#1733320 8-Mar-2017 21:19

frankv:

AFAICT, you've all swallowed the capitalist/progressive line that in some way we have to earn our retirement.

One of the great promises of automation was that we would get increased leisure time... instead, we're we're being told that our children will have to work for another 2 years. Why?

Because, apparently, we have to pay someone to live. Why do we have to pay? Who gets the benefit of those extra two years of work?

We are being treated as a herd of "human resources", to be worked until we drop.

Can you clarify middle two paragraphs

mattwnz

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#1733394 9-Mar-2017 01:02

tdgeek:

mudguard:
BTR:

Personally I like the idea of 65. We already spend most of our lives working why make it even longer? People should be able to enjoy retirement not reach the end of their working life and only have 10 years until they kick the bucket.

The fundamental problem is that there isn't any choice. Every year delayed makes the problem worse for the following taxpayers. Imagine what the personal tax rates would need to be when we go from eight workers for one on super, to four to one.
I think what I find frustrating is the argument about those paying taxes all their lives deserve it, it's not like that money had been put in a pot for your retirement. I'm fairly certain I will be paying tax all my life too but with less certainty over the availability of superannuation.
Something has to be done.

Currently, the taxes paid include expenditure for retirement pensions. Its fine to remove those tax payments and pensions and replace them, but for everyone working at the moment, some of the taxes they have paid include that benefit. They also include medical benefits, but pensions are a tax payment to be received later, whereas many tax payment spends are for today.

The question is how much of out tax we are currently paying, is being put aside for our future retirement savings, rather than being spent now. I suspect not too much. This was the whole purpose of the Cullen Super fund, which National stopped paying into. If they had continued, instead of giving tax cuts, we may not have had to need to raise the age in the future. There have been huge increases in shares since national got into power. Infact didn't National actually still say that they don't really see a need to raise the age, but they could see that the public mood on this had changed and wanted it raising. Guess we will see at the next election.

Geektastic

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#1733508 9-Mar-2017 09:33

MikeB4:
Geektastic:

MikeB4:

Geektastic:

BTR:

Personally I like the idea of 65. We already spend most of our lives working why make it even longer? People should be able to enjoy retirement not reach the end of their working life and only have 10 years until they kick the bucket.

The average life expectancy isn't increasing so why increase the retirement age.

You can retire at 35 if you can arrange it. It's not a compulsory retirement age...!

yep, I retired in my forties.

Although - without intending to be personal - I presume that medical issues may have contributed?

I certainly changed the what and how of my work once I had my heart surgery.

You are right, and no you aren't being personal, when I became disabled we decided our financial position was such that I should retire to concentrate on getting better, I also decided it was not fair on my employer as I felt was unable to give them what they deserved.

I draw no benefits and my medical treatment is private even though I am one of those dreadful baby boomers.

The whole blame the baby boomers thing is just a symptom of the modern trend to categorise everyone. The suggestion that the BB acted in some way collectively and maliciously is of course utter tripe: they did precisely what any of those complaining about them would do in the same position.

Geektastic

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#1733510 9-Mar-2017 09:37

frankv:

AFAICT, you've all swallowed the capitalist/progressive line that in some way we have to earn our retirement.

One of the great promises of automation was that we would get increased leisure time... instead, we're we're being told that our children will have to work for another 2 years. Why?

Because, apparently, we have to pay someone to live. Why do we have to pay? Who gets the benefit of those extra two years of work?

We are being treated as a herd of "human resources", to be worked until we drop.

As I said, you can retire at 35 if you want to and can make it happen.

Sadly, many NZers seem to believe 'the government' will deal with all their woes for them (no doubt using other people's money) - as exhibited by the person on RNZ I heard interviewed who claimed that "the government is there to look after you" when in fact the government is the ambulance at the bottom of the cliff and you are responsible for building your own cliff top fence to stop you ending up at the bottom...!

MikeAqua

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#1733551 9-Mar-2017 10:46

tdgeek:

Re the 2040 enactment. I cant get that. The issue is the baby boomers, who are 1/4 of the population. Its not their fault. They didn't sign a form while in the womb!. Its a fact of life, so we need to account for that. But to bring in the change to the retirement age when they are almost gone is a tad strange. Kets start thinking about it now.

The population is expected to continue to age. The cost of super and health are expected to balloon significantly around 2030/2040.

I'm basing this on projection I have seen several economists present at conferences etc based on treasury long-term forecasts.

An ageing population is one argument in favour of encouraging young skilled migrants.

Mike

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#1733617 9-Mar-2017 12:45

MikeAqua:

tdgeek:

Re the 2040 enactment. I cant get that. The issue is the baby boomers, who are 1/4 of the population. Its not their fault. They didn't sign a form while in the womb!. Its a fact of life, so we need to account for that. But to bring in the change to the retirement age when they are almost gone is a tad strange. Kets start thinking about it now.

The population is expected to continue to age. The cost of super and health are expected to balloon significantly around 2030/2040.

I'm basing this on projection I have seen several economists present at conferences etc based on treasury long-term forecasts.

An ageing population is one argument in favour of encouraging young skilled migrants.

"The population is expected to continue to age."

Who knew?

tdgeek

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#1733621 9-Mar-2017 12:54

Geektastic:

MikeAqua:

tdgeek:

Re the 2040 enactment. I cant get that. The issue is the baby boomers, who are 1/4 of the population. Its not their fault. They didn't sign a form while in the womb!. Its a fact of life, so we need to account for that. But to bring in the change to the retirement age when they are almost gone is a tad strange. Kets start thinking about it now.

The population is expected to continue to age. The cost of super and health are expected to balloon significantly around 2030/2040.

I'm basing this on projection I have seen several economists present at conferences etc based on treasury long-term forecasts.

An ageing population is one argument in favour of encouraging young skilled migrants.

"The population is expected to continue to age."

Who knew?

I just checked the calendar, its true!!

What he meant I think was the ratio between the old and young. I would have thought that with people having fewer kids, and later in life, that when the BB's pass, the ratio will come back to a more even spread. There must still be many pre boomers who had heaps of siblings

sxz

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#1733639 9-Mar-2017 13:15

tdgeek:

Currently, the taxes paid include expenditure for retirement pensions. Its fine to remove those tax payments and pensions and replace them, but for everyone working at the moment, some of the taxes they have paid include that benefit. They also include medical benefits, but pensions are a tax payment to be received later, whereas many tax payment spends are for today.

No, no no. Labour started doing this in 2001(?) with the super fund. National halted contributions to the super fund. As far as I am aware no one has ever contributed to future retirement apart from those few years Labour brought it in.

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