KiwiSaver Past 65: Should Government and Employers be Contributing?
In New Zealand, when you hit 65, there is currently no obligation for the government or your employer to contribute to your KiwiSaver fund. More Kiwis are choosing to work beyond the typical retirement age, whether for financial reasons or simply because they enjoy what they do. But the reality is that relying solely on the New Zealand Superannuation may not cut it anymore. With living costs on the rise and life expectancies increasing, it’s crucial to ensure our older workforce isn’t left hanging.
The Case for Extended Contributions
Boosting Financial Security: When government contributions to KiwiSaver stop at age 65, many retirees miss out on a crucial opportunity to grow their savings. As of December 2023, the average KiwiSaver balance for people aged 61-65 is $59,329 which falls short of what many people require for a comfortable retirement, especially with rising living costs.
Extending KiwiSaver contributions from the government and employers is essential. Many retirees face challenges in maintaining a decent standard of living, and by supporting contributions past 65, we can help ensure they have the financial resources to enjoy a more stress-free retirement.
Fair Compensation for All Ages: It can feel unfair when employees suddenly miss out on contributions just because they turn 65. If employers and the government are expected to contribute past this age, it creates a level playing field where everyone receives the same support. After turning 65, individuals continue to provide value to their employers and the economy. They deliver the same services and contribute to the tax base, so why should contributions stop simply because of age? Extending KiwiSaver contributions is not just about support; it’s about fair compensation for ongoing effort and engagement in the workforce.
Changing the Retirement Mindset: Allowing contributions to continue past 65 shifts our view of retirement from a single event to an ongoing journey. It encourages Kiwis to think long-term about their savings, helping them plan better for their financial futures.
A Brighter Future for Everyone
The conversation about KiwiSaver contributions after 65 is about more than just finances; it’s about creating a community where everyone can thrive. By pushing for continued contributions from both the government and employers, we can help ensure that older Kiwis can enjoy their retirement years without financial stress.
At MoneyGuide we’re all about empowering our clients with the knowledge they need to make smart financial choices regarding their KiwiSaver. Let’s work together to build a future where every Kiwi can retire with confidence and peace of mind.
If you’ve got questions about KiwiSaver, don’t hesitate to reach out! We’re here to help you navigate your KiwiSaver journey.
