Financial situation a consideration for all ages

MOST people don't plan for retirement until they reach 45, then they panic, Retirement Commissioner Diana Crossan told business people in Masterton yesterday.
Ms Crossan said that people of all ages need to think about their financial situation.
Ms Crossan was speaking at the National Bank business breakfast in Copthorne Resort Solway Park.
She said when it comes to savings schemes including the recently launched Kiwisaver, "the psychology of saving is more useful than the economy of saving".
"Most of us say, 'I'll do it when I get around to it,' or 'I wish I'd started it ages ago.'"
"Sixteen-year-olds can get themselves into debt and get a bad credit card rating, and they don't even know what that means ? there's a whole new level of complexity there, that we want to teach ? in schools."
With Kiwisaver, "employers shouldn't give advice to employees, and don't need to," Ms Crossan said.
Asked whether it would be responsible for employers to recommend Kiwisaver, Ms Crossan said, "You should very careful about that".
She said anyone who gives financial advice could be financially accountable to those they advised.
"We don't give advice either," Ms Crossan said. "It's information."
Ms Crossan gave one example of a company with a generous superannuation scheme where the employer contributed more than the worker.
New workers were given a form that included a box to tick if they wanted to join the scheme.
If they didn't tick the box, Ms Crossan said, "he felt like standing over them and saying, 'you're so thick we don't want you here'."
"But a lot of them didn't. They thought they'd get around to it later."
Speaking after the meeting, Ms Crossan said that, "for most people I think (Kiwisaver) would be a good thing."
The Retirement Commission, however, had to "be careful to be independent", providing information so people could work out for themselves whether or not to sign up.
One MP has questioned whether Maori and Pacific Islanders, with a lower life expectancy, should have to contribute to something they may not benefit from.
Ms Crossan said it could also be asked why women pay ACC levies, when the most common payout is for rugby injuries.
"Our health is improving and all of us need to plan for finance into retirement."
Ms Crossan said the Retirement Commission's website, www.sorted.co.nz, contains was aimed at encouraging young people to think about finance "without mentioning the R word".
She said people don't tend to think about retirement until they get to 45 and they panic.
The website contains a free "online financial check-up," Ms Crossan said.
"We think people should do this before they look at Kiwisaver. You would be surprised how many people don't know their financial situation."