Can We Still Count On NZ Super?

Can you still count on NZ Super when you retire, the numbers are against you!

Recently I posted about intergenerational inequity and how the current generations will be required to fund the retirement cost of anybody who is now approximately 45 or older.

1.1 million people are expected to be retired by 2030, the forecast cost of NZ Super would rise to $20 billion a year which is equivalent to 6.2 per cent of the country's output (GDP) against $11b a year and 4.8 per cent now. Considering we currently spend about 13 billion a year on Education the extra 9 billion is a fair chunk of change that will have to come from somewhere!

In March, the Government announced that the age of eligibility for superannuation will rise from 65 to 67 in gradual steps from 2037. NZ has followed what is happening overseas. Australia is at 65 now, rising to 67 by 2023, Britain is 65 now rising to 67 in 2028 and to 68 later and the United States is 66 now rising to 67 in 2027.

Even with this change I cannot see how the current NZ Super entitlements of $390 per week after tax for a single person and $600 per week for a couple can remain without extending the retirement age further, some form of means or assets testing, a big tax rise or a massive reduction in other areas of Government expenditure