Nigel Latta: We need to face up to old age
The geezer was bald. Brown liver spots were scattered over his scalp. Rheumy eyes peered out from behind thick glasses. His teeth were yellow, his hair grey, his jawline melting into his neck.
That old bloke was me. Makeup artists had aged me up so I could see what I'll look like when I'm 70.
It was confronting. I knew it was all special effects, but staring in the mirror at that wrinkled but familiar face, I realised: I'm going to get old. It's unavoidable. It's my future.
Facing the prospect of aging is always a little depressing. Getting old means slowing down, giving up stuff, and eventually dying.
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Maybe that's why we don't think about it as much as we should. It wasn't until I saw my 70-year-old face that I really confronted the fact. I think confronting aging is something we need to do as a country, too.
New Zealand is getting older. Currently, 15 per cent of the population is over 65. By 2048, experts predict that number will have risen to 24 per cent. That means that under the current NZ superannuation rules, 1.4 million people - almost a quarter of our predicted population - will be getting the pension.
The number of people paying taxes will decrease in proportion to the number of people receiving the benefits of them. We already spend $12 billion on the super every year - more than what we spend on all the other benefits put together. That number's only going to get bigger as the baby boomer generation retires. Healthcare costs will also increase as more of us live longer.
In 2013, Treasury put together a document called "Affording Our Future" that looked at whether New Zealand would be able to support its aging population. It's conclusion? We can't.
If nothing changes, keeping our retiring population healthy and supporting them financially will bankrupt the country some time in the 2020s. We'll have to borrow so much money we'll end up like Greece.
"Affording Our Future" suggested raising the retirement age to 67 as part of the solution to the problem. If that's necessary - and all the evidence suggests that it is - we need to do it sooner rather than later. The longer we leave it, the harder it's going to be.
The trouble is, raising the retirement age is a hard sell for politicians trying to win votes at election time. Many people, for perfectly understandable reasons, don't like the idea of being forced to work an extra two years. But if we want to avoid disaster, I think we need to look past our own interests and vote responsibly.
Aging is not just a problem for the government, though. The pension's only enough for the bare essentials - to have the retired life many of us want, we need savings of our own.
When I used a retirement calculator to figure out how much money I'd need to afford my idea of a good retired lifestyle, I was shocked to discover I need to squirrel away $1.2 million by the time I plan to retire. That's over $1000 every week. It ain't going to happen.
Even after adjusting my expectations, I still need to save $471 each week, which won't be easy. It's almost like by the time you realise retirement's not a million miles away, it's too late to do anything about it.
Achieving a comfortable retired lifestyle is becoming more important. In the old days, retirement seemed kind of like a waiting room for death. It seemed like all my grandparents ever did was plant peas, drink tea and play lawn bowls.
If you want to see what retirement's like for many people these days, take a look at Tauranga couple Don and Claire. They own a tidy, modern unit in a "lifestyle" village, and spend most of their time driving around the country with their caravan. What a life!
The Commission for Financial Capability ran a competition where they asked New Zealanders to come up with names for the three stages of retirement. (The fact that we need to break retirement up into three stages shows just how long we're now living.) The competition's winner, Wellington retiree Erica Whyte, called the stages discovery, endeavour and reflection.
"When you first retire, you've suddenly got this whole day, and you have to discover how to fill it meaningfully. Then endeavour, you then have to try to make some of those new discoveries work out in a different environment, and then ultimately there's a lot more time to think about what life has been, and I call that one reflection," she says.
For a fulfilling retirement, though, we need money, and lots of it. For many retirees, your house is the nest egg that's going to keep you going in your old age. You sell it, likely for far more than you paid for it, downsize, and live off the profits. But what's going to happen to the growing number of Kiwis who are locked out of the property market, and will rent all their lives? What are they going to have to fall back on if their retirement savings run out?
Many of us (myself included) aren't saving nearly enough for a comfortable retirement. Why is that?
Maybe we just haven't been taught how important it is, like the kids in teacher Vicky Crawford's classes at Albany Senior High School are. The school is working with the Retirement Commissioner on a programme that teaches these teens how to manage their money so they don't have to spend the end of their lives in poverty.
It seems to be working; I can just about guarantee these kids know more about KiwiSaver than you.
I think sometimes we feel like saving for retirement is throwing the money away. That's not really true, though: you're just spending it on a future you.
Retirement Commissioner Diane Maxwell says we should think about each little bit we save like we're buying our future selves a coffee.
Old me looks like a grumpy geezer, but he's probably all right. I think I'll buy him a coffee or two.
CASE STUDY: LAWRENCE
If the retirement age goes up, we'll all be working longer.
As long as you've got your health, I think that might be a good thing.
Lawrence is in his 80s, and works in the electrical department at my local Bunnings.
A former tradie, he retired at 67, renovated his house, and travelled around the country.
So far, a pretty typical retirement story. But what Lawrie did next is pretty unusual: he un-retired, age 73.
Three days a week he heads off for an eight-hour work day at Bunnings.
Retirement Commissioner Diane Maxwell says what Lawrie's doing is becoming more common among our retired population. Over 20 per cent of New Zealanders work past 65. We've actually already got one of the greyest workforces in the world.
"Increasingly people are saying, 'Well, I'm not going to have that big gold watch moment where I drop off and disappear and go and knit, I might actually just reduce my hours, start taking up some other hobbies but still be working.' There's a far more gradual shift, which I think is a really positive thing," Maxwell says.
It seems to be working out pretty well for Lawrie. I can personally testify that he gives really good advice. "We've got old, grey heads, I know that, but there's a lot of knowledge in those old, grey heads," he says.
"I've had people come to me and say, 'When we come into Bunnings and we need some information we always look for the grey heads'."
Of course, it's great that he's still earning, but the job provides more than just financial benefits.
"It's meeting people, sharing our knowledge with them ... we have an amazing team in this store, and it's sort of like a big family in a way, and the friendship between different members of this team is really valuable to me, actually. Old people and young people often have difficulties mixing, but that just doesn't exist here. The young guys think I'm okay."
"They look after me like a grandfather. If there's anything heavy to be done, it's, "You leave that Lawrie, I'll do that'."
The Hard Stuff With Nigel Latta: The Retirement Bomb airs on Tuesday at 8.30 pm on TV ONE. The whole series is available to watch now on TVNZ OnDemand.