Herald on Retirement Savings

The NZ Herald editorial picks up on a point made by superannuation expert Michael Littlewood.  The combination of NZ Super and KiwiSaver means the average person will have a higher level of income in retirement than they do during their working life (when they need it more).

With three methods of funding old age – national superannuation, the Cullen fund and KiwiSaver – the question is whether this is too much of a good thing and whether other needs are being sacrificed unnecessarily on the alter of retirement planning.

National Party finance spokesman Bill English was the first to make this point. He argued that New Zealand’s provisions for retirement were now very high by world standards and he questioned how this lined up with other present and pressing government commitments such as health and education. 

As I have said, I don’t think anything needs to be changed in the next decade, but in say 15 years time, if KiwiSaver has a very high uptake rate, I could see a future Govt deciding that the Cullen Fund will be transferred into individual KiwiSaver accounts and some sorts of means testing coming in for NZ Super.