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  1. #1
    Join Date
    Feb 2005
    Location
    Eindhoven, Netherlands
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    75

    Default Superannuation

    I am doing some investigation into NZ Superannuation. I was just wondering what the NZ attitude is towards this. Besides the state superannuation, do people often take out additional personal superannuation or do companies provide it? I know a lot of people invest in properties for their later years. But is that on top of personal superannuation or besides?


    I'm still young (31) so you'd say why worry about that now, but I just like to have all the pro's and con's clear before actually making that move to NZ.

    And I can hardly fathom the pension regulations here in the Netherlands, let alone try to get a grip on NZ regulations. So any input is greatly appreciated.

    Thanks,
    Ingrid

  2. #2
    Join Date
    Sep 2004
    Location
    Wellington, NZ - Yay!
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    Default

    Superannuation - what's that? Sorry - the Kiwi's don't tend to have pensions as such. Companies providing it - ha!!! I'm afraid not as far as us or any of our friends go - its not like Europe where it all comes as part of the job package.

    I have no idea if you get a state pension or not here - I would imagine so but I'm not counting my chickens. I'm sure someone on the forum can fill us in on that.

    Most of the people we know at retirement age here bought several properties over the years & have sold them for their pensions at retirement... We're going to do the same - we don't trust our pensions to keep us in our old age especially after seeing so many people getting almost nothing for their pension investments in the UK in recent years! - Beacuse of that we'd already started our property plan before we even considered moving here.

  3. #3
    Join Date
    Feb 2005
    Location
    Eindhoven, Netherlands
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    75

    Default

    Hi Sarah,

    NZ does have a state pension according to the Work and Income site, but it's only NZD 498 net biweekly for a single, so not a whole lot.
    I did find a few sites with private superannuation deals, such as axa.co.nz, but was wondering how widespread they were being used. So thanks for your info.

    Ingrid

  4. #4
    Join Date
    Aug 2004
    Location
    Inland Canterbury, NZ
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    8,390

  5. #5
    Join Date
    Aug 2004
    Location
    Whitianga. Nz. Pop; 4004
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    2,163

    Default

    New Zealand Superannuation is paid to men and women at 65. To qualify they must have lived in the country for at least 10 years from the age of 20, five of which must be since the age of 50 - but residence in some other countries, including the UK, counts as living in New Zealand.


    Well you live and learn eh.

  6. #6
    Join Date
    Sep 2004
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    Wellington, NZ - Yay!
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    Default

    Thanks guys - v. interesting! Although $1000 a month...not a whole heap but then neither is the UK pension thinking about it. I think making some provisions is a good idea whether it be private pension or property...

    Think I'd better hurry up & have a load of kids to look after me in my old age

  7. #7
    Join Date
    Aug 2004
    Location
    Whitianga. Nz. Pop; 4004
    Posts
    2,163

    Default

    'Retirees will carry debt to the grave'
    03 April 2005
    By ROB STOCK

    The spectre of lives spent in debt all the way to the grave has been raised in a report into equity release loans.


    The loans, tipped to become mainstream, allow older Kiwis to borrow against the equity in their homes. The loans are repaid after they are dead, or have moved out of their home.

    At present, the loans are relatively rare, criticised as too expensive and in some cases liable to result in superannuitants losing their homes.

    But they will become a necessary evil, says the report from the New Zealand Institute for Research on Ageing, written by Judith Davey.

    In the report, paid for by the Retirement Commission, Davey says there needs to be more consumer protection for older Kiwis - particularly cash-strapped widows whose pensions have dropped after the death of their husbands.

    The government should consider providing tax relief on the interest on equity release loans, and even underwriting the risks of a loan provider going bust, Davey says.

    With Kiwis living longer and facing mounting student debt, consumer debt, mortgage debt and credit card debt, many will be forced to live off the equity in their homes when they stop work, having failed to save enough to supplement the meagre New Zealand Super.

    For many, retirement could become a transition from one form of debt to another.

    The report finds future generations of Kiwis:


    Will be conditioned to carry debt throughout their lives and into retirement


    Are likely to outlive their savings and be forced to survive on the equity in their homes


    Will see the idea of passing wealth from generation to generation eroded as equity release becomes normalised


    Will support their children even in retirement by providing "an advance" on their children's inheritance


    Will experience a decline in the spending power of New Zealand Super

    Davey says: "Many older people are risk and debt averse, proud of achieving mortgage-free home ownership and keen to provide for their families through inheritance. There are indications that the next generation will have different attitudes.

    "They will be more financially aware and have lower expectations of government support. With longer life expectancy, many will see their children into retirement and there will be more occasions where families could use advances on their inheritance, which can be supplied through equity release."

    That is already being felt. In interviews with Kiwis who have used equity release loans, Davey says: "People talked about getting the newspaper again, not having to choose between filling up the car or the supermarket trolley, not having to hesitate before putting on a heater and no longer dreading the winter fuel bills."

    Many people see equity release as a "last resort" used by desperate people willing to pay interest rates of around 10%.

    But Davey says if equity release becomes popular in New Zealand, guarantees must be introduced to ensure that borrowers cannot be forced out of their homes.

    That may come through new regulations or, as the equity release industry wants, through "self-regulation".

    Retirement Commissioner Dianna Crossan recommends that people save enough to live comfortably in retirement rather than resorting to expensive equity release.

    "We also encourage people to consider other ways of freeing up cashflow. Some councils run rates postponement schemes, for example, and there are always options such as downsizing one's home, or taking on a boarder - that may suit some people better."

    Families might also be able to provide cash through home-made equity release arrangements, says Crossan.

  8. #8
    Join Date
    Aug 2004
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    Feilding originally Warrington
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    639

    Default

    Dave just started a new job and $3,000 of his annual salary is committed to superannuation. They are paying him $73,000 but $3,000 of that is to go to superannuation.

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