Private Super Savings

Lindsay Mitchell blogs on the fact that:

The Social Development Ministry survey found the average private income of a single person aged over 65 had dropped 88 per cent from $2200 a year in 1989 to just $260 in 2004.

This is a concern and reinforces my scepticism about the bad messages sent out by universal publicly funded superannuation.It is far more efficient for people who can afford to save for their own retirement to do so, rather than to overtax them and then give it back to them as a pension.  It is silly people earning $100,000+ a year are getting a welfare benefit just because they have turned 65.  By restricting benefits to those who need them, we are better able to further assist those in genuine need.

And with our ageing population, it is very much the wrong signal to send that people don’t need to save for their retirement as the state will do it for you.   This is one reason why KiwiSaver isn’t a bad thing.