Many gen-Xers are planning to work beyond age 65 either part-time or full time. Photo / 123rf
Many gen-Xers are planning to work beyond age 65 either part-time or full time. Photo / 123rf
One in four Kiwis in generation X are not sure when they will retire despite some being just seven years away from turning 65, research from ANZ has revealed.
Fiona Mackenzie, managing director for funds management at ANZ NZ, said the idea of stopping work at 65 had changed alot from the baby boomer generation and there were now a lot more options for people to consider.
“It was a more linear thing. There were just more hard-coded expectations around what it looked like.”
But she said generation X faced less certainty for life after 65. “I just think there are more options. We know our physical and mental quality of life will be a lot better on average. That in itself creates a lot more options.”
She said generation X - those aged around 45 to 54 now - were possibly not as purpose-led as the millennial generation but were still more purpose-led than the baby boomers were.
“That’s where work after 65 - for many it is a purpose thing.”
Mackenzie, who herself sits in the gen-X age group, said she planned to quit full-time work after 65 and take on more of a portfolio of jobs that would offer flexibility.
Only a third of those ANZ surveyed planned to stop work at 65 with 16 per cent planning to give up full time work in their 70s and another 2 per cent expecting to work into their 80s.
But some 9 per cent said they expected to retire before 60 and a further 10 per cent said they expected to retire between the age of 60 and 64.
Mackenzie said some people did not have a plan and this was a call to action to start thinking about it. But she said it was also a good idea to have more than one plan.
“I think one plan isn’t necessarily the best I think it’s possibly having options because there are more options.”
She said those could include working part-time, working from different locations, and doing charitable work.
“The call to action here is to think about it, don’t let it happen to you, be more proactive and have a think about it.”
Fiona McKenzie, managing director of ANZ Investment Management.
Mackenzie said NZ Superannuation was designed for those who owned their own home in retirement.
“Generation X - that is starting to change. Not everybody in generation X owns their home and if you get down to the younger generation again, it is even lower.
ANZ also asked those who had already retired about whether they had retired earlier or later than planned and why. The top reason for retiring early was ill health.
Among those who retired later than planned over half (52 per cent) said they had wanted to keep working part-time and 19 per cent said they wanted to keep working full-time.
“That’s pretty high, and that was very different to what was anticipated back in the day when NZ Superannuation was designed.”
But a quarter had to keep working longer than planned because they didn’t have enough money to retire comfortably.
So far average balances in KiwiSaver are still low. Asked if contribution rates should rise to help future generations better prepare for retirement, Mackenzie that was a conversation that should be had at a national level.
“On the one hand I really hope that we don’t tinker with KiwiSaver, it is critically important for its trust and long-term robustness and for people to have confidence in it.
”Having said that I think there is a conversation to have around in this world that is evolving to a large extent of the population not owning their own home what does good or enough look like?”
She said there was no magic number, it was different for everyone.
Mackenzie said generation X did not have the same time benefits that millennials did but still did have some time to save.
“10 years may not seem like a massive amount of time - but it’s a pretty decent period of time.”
Pressure on saving
Mackenzie said it had seen a drop off in the level of voluntary contributions coming into KiwiSaver this year.
“Each year we would see quite decent-sized amounts of voluntary contributions.”
In the past that had come from young people wanting to top up their KiwiSaver ahead of a house purchase.
It had not seen a decline in systematic contributions when she last checked on it a few weeks ago.
In terms of people withdrawing money due to financial hardship, there was a steady flow. It had put in place a streamlined process for those negatively impacted by the floods, she said.
“Overall contributions have remained reasonably steady except with voluntary, which is not a surprise when there is a cost of living crisis as well as the housing market starting to soften up.”
