What is NZ Superannuation?
The New Zealand Superannuation Fund has been known as a retirement pension that has been available to those who are the age of 65 or above, while also being a New Zealand Resident.
What are the Changes?
The New Zealand Government decided that in order to be eligible for the NZ Superannuation Fund, the minimum number of years lived in New Zealand after the age of 20 will rise from 10 to 20. This means that over time, it could become more difficult for people to become eligible for the fund. The table below demonstrates the time required to live in New Zealand to be eligible for the NZ Superannuation Fund.
|
Date of Birth |
Time Required |
|
On or before 30th June 1959 |
10 Years |
|
1st July 1959 to 30th June 1961 |
11 Years |
|
1st July 1961 to 30th June 1963 |
12 Years |
|
1st July 1963 to 30th June 1965 |
13 Years |
|
1st July 1965 to 30th June 1967 |
14 Years |
|
1st July 1967 to 30th June 1969 |
15 Years |
|
1st July 1969 to 30th June 1971 |
16 Years |
|
1st July 1971 to 30th June 1973 |
17 Years |
|
1st July 1973 to 30th June 1975 |
18 Years |
|
1st July 1975 to 30th June 1977 |
19 Years |
|
On or after 1st July 1977 |
20 Years |
What Does this Mean to Me?
This means that with these eligibility changes, your time required could actually be more than you expect. For example, a person born on September 3rd 1966 will have to stay and live in New Zealand for 14 years rather than 10. That’s 4 extra years needed to stay in New Zealand than originally expected, while still effectively receiving the same amount they were always bound to be given. In some circumstances, this could also lead to people having to retire later than expected due to the rising required time over the coming years. For example, a person born in June of 1959 who looks to retire soon will have to sit tight and wait another year due to them being born just after the cut off between 10 required years and 11.
Example
Allen and Brian are brothers who were born and raised in Hamburg, Germany. Both Allen and Brian have migrated from Germany to Auckland, New Zealand. These brothers want to find out how long they will have to wait until they are eligible for the Superannuation Fund, as well as how old they will be.
Allen was born in June of 1963 (59 years of age). With the eligibility changes, he would have to stay in New Zealand for 13 years before he would be able to receive the NZ Superannuation. This means that he would be 72 years of age.
Brian on the other hand was born in September of 1969 (53 years of age). Because Brian is younger than Allen, he has to stay in New Zealand for 16 years before receiving his NZ Superannuation. But, he will be younger compared to Allen based on when they can receive it. Brian will be 69 years old when he is eligible.
Is the New Zealand Superannuation Fund Enough?
Unfortunately, you cannot rely on the NZ Superannuation in order to have a ‘choices’ style retirement. You have to look at the NZ Superannuation as a bonus towards your retirement rather than having it as your main source of income. This is where you need to have a retirement plan, rather than ‘sleepwalking’ into retirement with nothing but a hope that the NZ Superannuation will cover you. Your NZ Superannuation can also vary depending on your living situation, such as whether you will collect alone or with a partner, the number of children you have, whether you were on the benefit before collecting etc. This means you could end up collecting more or less than the average for your age group.
What else can I do to Fund my Retirement?
In order to get the most out of your retirement and use the NZ Superannuation as a bonus, having KiwiSaver, as well as other forms of savings will come in handy. Finding the best KiwiSaver fund for you is also vastly important to further make the most out of your retirement. This is a great way to prepare in the case of ineligibility for the NZ Superannuation, or if it isn't enough.
How we can Help!
Here at National Capital, we help kiwis across the country identify what's in their best interest when it comes to the right KiwiSaver fund, especially if the NZ Superannuation isn’t enough. We operate a high level, customer orientated approach to provide free personalised KiwiSaver advice. Check out our KiwiSaver HealthCheck so we can help advise the right fund for you.
Want to get in Contact?
Send us a question on our website. Or feel free to use any of the contact information below. We look forward to hearing from you soon to help find the KiwiSaver Fund that is right for you!
contact@nationalcapital.co.nz
National Capital Limited
Suite 4, Shed 24
Princes Wharf
Auckland 1010
p: +64 21 0499 703
