A budget advice expert says changing the eligibility age could penalise some savers. Photo / Getty Images
A budget advice expert says changing the eligibility age could penalise some savers. Photo / Getty Images
Means-testing whether people should be eligible for New Zealand Superannuation is one suggestion from a Bay of Plenty local to tackle potential problems surrounding the pension.
Mikaere Tangoiro, who is in his 80s, realises the situation is a "knotty" one but thinks if people are "fit and healthy" over theeligibility age of 65, means-testing could be the answer.
Elsewhere, a budget advice expert says increasing the age would penalise some people who have been preparing for retirement.
The latest Stats NZ period life tables, which use deaths from 2019 to 2021 to calculate life expectancy, shows a newborn boy can expect to live, on average, 80.5 years and a newborn girl 84.1 years.
Distinguished Professor Emeritus Paul Spoonley said superannuation would be a hot topic over the coming years.
Distinguished Professor Emeritus Paul Spoonley. Photo / NZME
He said people were living longer and in the near future between 20 and 30 per cent of New Zealand's population could be aged over 65.
"Over the next decade, because of the demography and ageing of New Zealand, the cost to superannuation will continue to rise significantly."
Spoonley thought one option to help resolve the pressures of supporting the superannuation could be delaying eligibility.
A spokesman for Minister for Social Development Carmel Sepuloni said there were no plans to change any eligibility rules.
Minister for Social Development Carmel Sepuloni. Photo / Mark Mitchell
Retirement Commissioner Jane Wrightson said raising the age of eligibility would "increase inequity" for those with lower life expectancy rates, such as Māori and Pacific people, and those already heading into retirement financially worse off, particularly women.
Life expectancy for Māori was lower than for Europeans, Stats NZ data also revealed. European males could expect to live 81 years and females 84.5 years, compared to 73.4 for Māori males and 77.1 for Māori females.
Tangoiro was one of a handful of people in Mount Maunganui who spoke to the Bay of Plenty Times earlier this month about whether changing the eligibility would be a good idea.
Helene Nihotte, 22, thought on a similar wavelength: "If people are fit and healthy, why can't they work a little longer?"
A pensioner, who would not be named, thought means-testing would not be worth it.
"We were 65 [when we started collecting], but I think it could go up a bit. So many people are really well at 65 … I don't know how you'd choose. I don't think it should be means-tested … because we worked all that time."
Meanwhile, Cathy, who would not provide her last name, thought 65 was dead on the money: "That's when you retire," the 57-year-old said.
Bay Financial Mentors general manager Shirley McCombe. Photo / Supplied
Bay Financial Mentors general manager Shirley McCombe said she understood why there was a discussion around lifting eligibility but thought it would "not be positive" for those approaching 65.
"For those who are not able to work after 60 years of age, they would be looking at a core benefit, such as a Job Seeker allowance which is currently $278.50 net per week," she said.
"Superannuation is $437.00 net per week. The other issue is that core benefits are income/asset tested but superannuation, for someone who qualifies, is not.
"This would result in those who have tried to prepare for their retirement being penalised."
McCombe said NZ Super did not allow for "unexpected costs" like a large and unexpected bill and for people who relied on NZ Super, their budget was "very tight".
She encouraged people to start early when planning for retirement.
"The magic of compounding interest is one of your best friends.
"Get advice about the right plan and don't be tempted to move funds every time the market moves. Get rid of debt as quickly as you can.
"Money is so easy to get today that people keep adding to their mortgages, maxing credit cards and using Afterpays. They would be horrified at the true cost of some of their purchases if they worked out the cost after fees and interest charges are added."
