Statistics NZ have announced that the population aged 65-plus has doubled since the early 1980’s to 635,200 and was likely to double again by 2040.
A quarter (25.1 per cent) of men and 14.8 per cent of women aged 65 and over are now still in paid work, up from just 8.7 per cent of men and 3.4 per cent of women 15 years ago.
A paper by the University of Auckland’s Retirement Policy and Research Centre says Treasury estimates of the net costs of superannuation in 2060 have been revised downwards from 9.7 per cent of national income (estimate made in 2000) to just 6.6 per cent in the latest revision.
Centre co-director Michael Littlewood said a key factor in the reduced net cost was an increase in national income because of huge increases in the numbers of elderly people working well past 65.
“When people work they pay taxes and they increase economic output and that all goes to improve the bottom line, gross domestic product,” Mr Littlewood said.
Before we get too excited about the downward estimate in the superannuation burden we need to remember that even the revised figure is over 4 per cent more than what we pay now. Also health costs are also expected to rise, from 6.5 per cent of national income to 10.7 per cent by 2061.
Many people are working on past 65 because they still feel they have something to offer and enjoy the stimulation and purpose that working can give. There are many others though that are working because they have no choice. National superannuation is not enough to live out a simple, comfortable retirement. We need other personal resources to do that now. Many of us have arrived at the traditional retirement age devoid of a personal asset base that allows us to maintain the lifestyle we enjoyed when working.
There are no simple answers to this although having compulsory saving via Kiwisaver is a big step in the right direction for future generations. It is a pity that Sir Robert Muldoon and Company decided in the 1970’s that we should axe the compulsory savings scheme and that we would be better off with the government investing that nest egg for us in infrastructure projects. Now with a third wave of asset sales the politicians are determined to ensure that as a country we dispense with the last remnants of our profitable national asset base that would help ease our future financial burdens and maintain our standard of living.