This means either being taught about it, carefully reading the manual, and these days, watching some YouTube videos of professionals at work.
Sadly, a “she’ll be right” attitude can lead to disaster. The same goes for financial tools, including the supposedly simple “universal” state pension, New Zealand Super.
Learning from others’ mistakes with NZ Super teaches us about its nature.
At the end of June, just over 809,000 people were getting NZ Super.
Every so often you run across people complaining they weren’t automatically paid NZ Super when they turned 65, and asking for back payments.
In the 12 months to the end of June, 7013 people had their NZ Super payments stopped because they had travelled overseas.
NZ Super is not designed to be paid to people living, or travelling for extended periods overseas. If you’re heading off for more than 26 weeks, you have to tell the Ministry of Social Development (MSD).
In June, $1.5 million was owed by people who travelled, didn’t tell MSD, and were caught.
The MSD and the Department of Immigration shared information on 10.67 million travel movements in the 12 months to the end of June.
This system also caught more than 6000 people who headed overseas for more than 28 days and received Winter Energy Payments. Two-thirds ended up with a debt to MSD.
The lesson: Ignore the NZ Super rules, and you risk becoming a debtor.
For the first time in history more than 100,000 people on NZ Super were getting pensions from overseas.
Many, but not all, end up losing their overseas pensions, as they are taken by MSD to help pay for their NZ Super.
This is a giant bone of contention. Many losing their pensions call it theft as the pensions taken sometimes only have a passing resemblance to NZ Super (except in that they provide an income in retirement) as they were built up through compulsory payments from their wages while working overseas.MORE FROM
ROB STOCK • MONEY AND CONSUMER AFFAIRS REPORTER
Their mistake, if you can call it that, is not realising their overseas pensions would be taken like this, resulting in them having much lower income levels in retirement than they expected.
Had they known, or been told when they came to New Zealand, they would have surely either not come, or saved a lot more into private pension schemes like KiwiSaver.
The lesson: NZ Super is a vital part of your retirement, but you need to know how it works when you’re young.
While NZ Super is often called a universal state pension, there are different rates for people living alone (the highest rate), single people in a shared home (a slightly lower rate), and married couples (a lower rate still).
Fail to tell MSD about your real living arrangement, and you can end up with a debt to repay.
Worse, MSD might even decide you are in a relationship with the friend you are living with.
The lesson: When you go on to a benefit, your private life is not as private as it used to be.
More than 45,000 people getting NZ Super also get extra money so they can afford to pay their rent.
The lesson: Whether NZ Super is enough to live on depends on things like whether you own a home, where you live, and whether you also have private savings and wealth.