People over 65 want to work, with many unable to afford not to, the 2016 Review of Retirement Income Policies shows.
The Commission for Financial Capability conducted digital surveys on monthly review topics throughout the year – from June to November it received 3302 responses to questions based on the ageing work force in New Zealand.
It found only 24 per cent of the responders had retired, or planned to retire at 65 or younger, with 75 per cent estimating they would, or had retired over 65. Fifty-four per cent of people said they worked past 65 for financial reasons, 36 per cent cited value and satisfaction and 10 per cent cited other reasons for continuing to work.
These statistics are only going to increase as the Business of Ageing Report updated in 2015 noted that 65% of men and 55% of women aged 65-69 years are likely to be working by 2051-2061. In addition 12% of men and 10% of women over 80 years old are likely to be working by 2051.
UK pension provider Royal London published research last year suggesting today’s workers will need to retire as late as 81 to enjoy the same standard of living enjoyed by their parents. The findings fuel the belief many people will have to work until they drop to sustain their lifestyles. The UK is reviewing its pensions regime and results are due to be published in May.
Former Prime Minister John Key resisted pressure to raise the retirement age, memorably vowing he would quit rather than do it. But Bill English has refused to renew that pledge, which he described as “a product of its time, where there was a need to establish trust”. In December the Commission for Financial Capability called for NZ Super eligibility to be increased gradually between 2027 and 2034 to the age of 67.
It’s about having choice
Of course, people may choose to work past 65. There are many positive benefits for those who continue to work later in life including the possibility of improved standards of living, improved physical and mental health, social connectedness and interaction, social status and respect, possibilities for lifelong learning and development, and the ability to stay active.
However, what about the people that do not want to continue work but have to? Older adults need a stable and adequate income to assist aging in a positive way. It is important then that superannuation or the pension should allow retirees to continue living a comfortable life.
At the moment in New Zealand, almost everyone who reaches age 65 qualifies for the state benefit (New Zealand Superannuation). For a single person this is $20,008 a year after tax, so around $385 a week. A married couple gets $30,781 (1 April 2016) which equates to $592 a week.
Is this enough to live on? – The research seems to indicate no.