Warning KiwiSaver could be eroded by NZ Super change

As reported in NZ Herald online, March 9th, 2017: http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11814357

Some people may be forced to live off their KiwiSaver for two years while they wait to get New Zealand Superannuation, an academic has warned.

The Government announced plans this week to lift the pension age to 67 by 2040. But it will leave the access age for KiwiSaver at 65.

Susan St John, director at Auckland University's Retirement Policy and Research Centre, said people turning 65 may have no choice but to dig into their KiwiSaver if they can't work and the benefit is asset-tested.

"If there is nothing but a welfare benefit that is means tested and KiwiSaver funds are part of that means test then people who can't sustain adequate levels of paid work will have no alternative but to erode their savings pots."

"So not only do the people struggling already to work at 65 not get the pension they need at 65 but when they do reach the magic age of 67 they may have little else to call on for additional income."

St John said its research showed retirees needed around $10,000 a year on top of NZ Super to have a modest retirement.

"This requires a sizeable lump sum especially when the Government doesn't help retirees with mechanisms to annuitise fairly."

St John said well-off people would be fine with the NZ Super age at 67 but it could be crippling for others.

Read the full article here: http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11814357

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