AUSTRALIA/NEW ZEALAND - Australia's superannuation system has helped raise workers' expectations for retirement above those of their Kiwi counterparts, a study from Mercer has found.
It showed that while 39% of New Zealanders would prefer to retire before age 60, most (65%) don't expect to actually cease work until after age 65. Only 9% of New Zealanders would like to retire before reaching 50.
Across the Tasman, half (51%) of Australians prefer to retire before age 60, while only 44% expect to cease work when they are over 65. As many as 17% of Australians would like to retire before they reach 50 years of age.
Bernie O'Brien, head of Mercer New Zealand, said while the comparisons showed there were important differences between the two nations on the issue of retirement expectations and preparedness, it highlighted a concerning gap between when New Zealanders would like to retire and the reality of when they are likely to retire.
The study also showed New Zealanders were more likely than Australians to anticipate relying on government assistance once they retired.
Government assistance, such as the aged pension, was projected to account for 22% of retirement funding for Kiwis, and only 13% for Australians. However, superannuation will account for 43% of retirement funding for Australians compared to just 27% for New Zealanders.
O'Brien said: "KiwiSaver has had a strong launch and, if Australian habits are a guide, has enormous potential to transform New Zealand's retirement landscape. After more than a decade of evolution, superannuation has become central to Australian retirement savings with government assistance playing a support role.
"Given the early groundswell of support for KiwiSaver and the Australian experience, it is reasonable to make some conservative predictions. In the future, as KiwiSaver evolves, New Zealanders will be more confident in their ability to retire earlier and will expect a greater level of comfort in retirement."
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