Are you looking forward to retirement?

By the time we get there, there will be a lot more of us, and we need to figure out who will pay for it. The government? Our kids? Our grandkids? Us?

The big picture - Review of Retirement Income Policies 2019

The big picture - Review of Retirement Income Policies 2019


Consider this:
  • Between now and 2060 the number of people aged 65+ will double.
  • 1 in 4 New Zealanders will be over 65.
  • As soon as 2028, those aged 65+ will outnumber children aged 0-14 for the first time.
  • This is because we’re living longer, and having fewer babies.
  • Since the 1960s, the life expectancy for men has increased from 68 to 79; for women it’s gone up from 73 to 83.
  • A child born today can expect to live to their 90s.
  • At the same the time, the number of babies born has declined from a high of 4.3 per woman in the 1960s, to 1.8 today.

That means fewer workers paying tax to support the elderly in the future.

  • In 20 years, the ratio of people aged 15-64 to those aged 65+ will decline from 4 to 1, to about 3 to 1, and in 50 years will be 2 to 1. (1)

  • In the same time, the cost of NZ Super will triple from $39 million a day now, to $120 million a day.
  • The Government’s Super Fund will only cover a fraction of that - 0.5% in 2035 rising to a maximum of 12% in 2078.

Today’s Super is paid out of today’s taxes – the same taxes that pay for health, education, law and order and everything else the government funds.

Will our economy grow enough to cover the rising cost of Super? Or does the government need to find a way to cover the cost – raise taxes? Spend less in other areas like health and education? Borrow more?

(1) Source material : https://www.stats.govt.nz/information-releases/national-population-projections-2020base2073
This means that for every person aged 65+, there will be about 2.8 people aged 15–64 in 2040, 2.3 in 2060, and 2.1 in 2073