A survey of 1000 adults living all over the US, carried out by the First National Bank of Omaha, examined Americans’ plans, behaviours and decisions on an array of retirement-related matters—from saving to investing to paying off debts to staying informed and more.
The survey revealed that 39% of people who have yet to retire have not started saving for retirement. It also found that 69% have not calculated how much money they will need for retirement. And 65% prioritise getting out of debt over investing for retirement.
Are Kiwis any better at preparing for retirement?
New Zealand’s Commission for Financial Capability (CFFC) says 46% of New Zealanders who are yet to retire do not contribute to KiwiSaver, and are not enrolled.
The CFFC points out that the US does not have a universal pension scheme like NZ Super, and therefore the consequences of not saving for retirement are different in both countries. Other policies differ too; for example Kiwis are unlikely to have medical debt because public hospital healthcare is free.
Certainly, while American retirees are burdened with debt (37% are still paying off a mortgage, 15% are paying off medical debt and 8% are paying student debt) Kiwi retirees fare much better with just 12% of retirees still paying off a mortgage, according to the CFFC. Our public health system and a formerly free tertiary education system mean that no other major sources of debt typically plague older New Zealanders.
The CFFC’s Financial Capability quarterly barometer makes for interesting reading. It points out that most Kiwis intend to retire between 65 and 69 years of age.
With regard to attitudes towards saving for retirement, most (38%) felt they ‘need to save for retirement even though it’s not easy’, with 28% perceiving it as the responsible thing to do, and 20% as a necessary evil. Most New Zealanders intend to rely on NZ Super, KiwiSaver or other pension or retirement scheme during their retirement. Interestingly 27% intend to supplement their retirement by working part time. Nearly half (47%) felt that NZ Super wouldn’t be enough to retire on.
Worryingly however, 32% (the majority) had “no idea” how much they needed for a comfortable retirement.
The data collected on retired New Zealanders found that only 7% were struggling to make ends meet in their retirement with most (39%) reporting that they “can’t do all things but can afford some luxuries” and 26% saying they can afford to do all they want.