Living the retirement dream

TRACY WATKINS AND ANDREA VANCE
Last updated 12:15 23/02/2013
Pensioners at home
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KEEP ON GOING: Many New Zealanders are working past the fixed retirement age of 65.

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Ron Atkin is living the dream. The 62-year-old Napier man owns his own business, loves his work and has no plans to give it all up at 65.

"I've got the lifestyle everyone wants. I just want to keep it going as long as I can," Mr Atkin says.

"Mine will be a slow fade out. I don't plan on having a retirement date, I'll just slowly step back."

He is not alone.

A Fairfax Media-Ipsos poll of 1000 people shows 30 per cent of us plan to keep working past 65 - and the older we get the more likely we are to push out that date.

Sixty-five might be the traditional retirement age, but among those we questioned just 38 per cent planned to retire at that age. Some want to retire earlier - 21 per cent - while a further 11 per cent aren't sure.

No wonder so many of us now feel the current fixed age of entitlement to superannuation at 65 no longer suits our lifestyles.

When asked whether they favoured the status quo, raising the qualifying age for superannuation to 67, or giving people the option of retiring later for a bit more money, a staggering 49 per cent of people favoured a flexible pension age.

A further 15 per cent favoured raising the retirement age to 67, while just 29 per cent of people wanted to keep the system as it is.

UnitedFuture leader Peter Dunne says people want to choose their own age of retirement, which is why he is proposing people be allowed to draw down a pension any time between the ages of 60 and 70.

The Government has agreed to investigate the plan, which would allow people to opt to retire from age 60, at a reduced pension rate, or hold out till as old as 70, in return for a bigger pension.

Mr Atkin thinks a flexi-pension is "a brilliant idea".

But he's more concerned about those who want to retire early.

Many manual workers aren't physically capable of working till they're 65, he says.

Even a quick survey of his mates on the golf course shows many are struggling at that age.

"People are living longer but they're not wearing out any later. That's my issue. You look at builders and plumbers - you're asking a 65-year-old to get up a ladder and it's not on. He's no longer capable of doing that. It's just dangerous."

Mr Dunne said he was not surprised by the poll's support for flexi-pensions. His office gets a steady stream of inquiries from people wanting to know how much they would get.

While only rough calculations had been done on the impact, it would work out at about 60 per cent of the existing Super- annuation entitlement for someone who retired at age 60, and around 130 per cent for someone who held out till they were 70.

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For a married couple that would equate to about $696 a week if they both wait till age 70, or $321 for a married couple if they retire at 60.

At the lower rate, many have questioned whether it would condemn those who opted out early to an old age lived in poverty.

Mr Dunne concedes it is a valid concern. "[But] the counterpoint to that is that at the moment they don't have the choice. If they're forced to retire earlier, they have nothing."

The other leg to UnitedFuture's policy was compulsory KiwiSaver and that would help bridge the gap in earnings, he said.

The age of eligibility for the pension has been a hot potato politically for years - so much so that Prime Minister John Key vowed in Opposition to resign rather than change the current age or entitlements, which are paid at a rate tied to the average wage.

Previous broken promises over means-testing and pension rates made the pledge a political necessity.

But it was also a promise made before the full impact of the global financial crisis and the Christchurch earthquakes, and the spectre of decades of debt hovered over the Government.

Mr Key has come under increasing pressure to go back on his promise and raise the retirement age - a policy which has the backing of Treasury and many economists.

But the Government insists there is no pressing need to change the system.

Labour disagrees - and campaigned at the last election on raising the age of entitlement to the pension to 67.

But it was a big gamble that did not pay off at the ballot box, even if it won Labour kudos for having the more fiscally responsible policy.

Mr Dunne said people did not like being told the goal posts had suddenly shifted.

"The key thing is they want to make that choice for themselves. A lot of working class people have reacted to me quite strongly at the notion of being suddenly told the retirement age is going up to 67."

Christchurch workshop service manager Andrew Hodgkinson says he is "not adverse" to the retirement age rising to 67, but would prefer it is not compulsory.

"I have some people that work for me that are that age and they want to continue working.

"I think people should be able to retire at 65 if they want to . . . an individual decision rather than a government decision as to what age people retire.

"Everyone's circumstances - financial circumstances, personal circumstance, desire to keep on working - it's all different and I don't think they should have a compulsory rising of the retirement age to 67."

Like most of us, the 34-year-old would love to retire tomorrow.

"But it's not going to happen."

Mr Hodgkinson and his wife moved to New Zealand seven years ago from Britain.

They will be entitled to a British state pension when they retire - "it's not massive" - and are looking at setting up a pension fund in New Zealand. They also plan to use investments and property to live on in their old age.

Mr Hodgkinson plans to retire aged 65, but says he and his wife are "both reasonably concerned that we haven't got an ever- growing fund of money".

Young people are most likely to dream of retiring early - a third of those aged 25-34 have ambitions to retire by age 60, according to pollster Duncan Stuart.

"Only 15 per cent of those aged 45-64 feel this way."

Older workers are also more inclined to take things day by day, Mr Stuart suggests.

"There is a point beyond age 65 where one in every five appears happy to make it up as they go along, depending on their health, their lifestyle and their contentment with being in employment."

There are some party political differences. For instance, twice as many National supporters have ambitions to retire by age 60 as Labour supporters, while Labour supporters are more likely to plan to work beyond age 65.

But the starkest finding in the poll was the pressure to change the status quo, Mr Stuart said.

"Virtually two-thirds of New Zealanders would prefer to see the age of superannuation entitlement be either raised to age 67, or raised optionally by the individual."

Blenheim baby boomer Sharron Bray believes the retirement age should be flexible - depending on health. But within 10 years she predicts it will rise to 70 "because people are well".

The 66-year-old retired from her job as a department store bra- fitter to look after two of her grandchildren while her daughter retrains. Otherwise, she says she would still be working fulltime.

She believes future generations should be entitled to a state pension - but would be wise not to rely on it for their total income. "If you have been working, putting into the general pot for everybody to use, yeah I do [think you should be entitled].

"What I think will happen is that it will be more of a top-up. They [the government] will expect you to have your own funds.

"If you are not dipping in the coffer then maybe you'll be able to get great medical services - or some [other] lollipop they'll give you."

Mr Dunne's proposal would not cost the country any less than the current pension scheme - it works out cost neutral, or just marginally cheaper, depending on what age people opted on to the pension.

But he believes it would help dig National out of its hole over Mr Key's promise not to reduce superannuation entitlements.

"My view is that given National's rock-solid promise not to shift beyond 65, this potentially lets them off the hook.

"They could still say the age of entitlement is 65, the fact that people might choose to wait till 66 or 67 doesn't detract from that promise."

He admits that Mr Key is yet to be convinced.

But public consultation sparked by the release of a discussion document later this year will force the issue on to the Government's agenda.

As Mr Stuart notes, the Government could find that backing change is better than backing the status quo.

"Given these numbers, it would be surprising if neither major party didn't come up with a modified scheme to attract voters in the next election. It would be a winner."

- © Fairfax NZ News

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