NZ Superannuation: The 65-and-over rule
New Zealand Superannuation (NZ Super) is a universal, government-funded pension paid to eligible residents aged 65 and older. It is not a benefit that can be accessed at age 60, regardless of your personal financial circumstances.
Key eligibility requirements for NZ Super
To qualify for NZ Super, you must be 65 or older. You also need to be a New Zealand citizen, permanent resident, or hold a residence class visa, and reside in New Zealand, the Cook Islands, Niue, or Tokelau. Residency requirements are increasing for those turning 65 between July 2024 and July 2042. More details on eligibility can be found on {Link: Work and Income https://www.workandincome.govt.nz/eligibility/seniors/superannuation/who-can-get-it/index.html}.
What are my options at age 60? Superannuation vs. KiwiSaver
It is important to distinguish between NZ Superannuation and KiwiSaver, as they are different components of New Zealand's retirement income system.
| Feature | New Zealand Superannuation (NZ Super) | KiwiSaver |
|---|---|---|
| Age of Access | 65 | 65 (or earlier under limited hardship circumstances) |
| Funding | General taxation | Voluntary contributions from you, your employer, and government |
| Means Tested? | No, it is a universal payment | Your account balance is based on your contributions and investment returns |
| Purpose | Base-level income in retirement | Supplementary retirement savings |
| Portability | Fixed rate based on marital status, no portability | Withdrawable from age 65 (usually as a lump sum or regular payments) |
Retirement income alternatives before age 65
Since NZ Super is not available at age 60, alternative strategies are necessary to fund this period until age 65. Many New Zealanders use other financial instruments or continue working.
Continuing to work
Working past 60 is a common option in New Zealand, as there is no compulsory retirement age.
Investing personal savings and assets
Utilizing personal savings and investments is a primary way to fund the years before NZ Super eligibility. Options include term deposits, bonds, income investment funds, and real estate.
Downsizing your home
Downsizing your property can release equity, providing funds for retirement.
Planning for retirement in your 60s
Even before age 65, the early 60s are crucial for financial planning. Seeking advice from a financial advisor can be beneficial.
The SuperGold Card
Access to the SuperGold Card begins at age 65, aligning with NZ Super eligibility.
In conclusion, while you cannot receive NZ Super at 60, effective planning and utilizing other income sources are vital for a secure retirement at 65. Understanding the eligibility criteria for NZ Super and exploring all financial options is essential. For further details on retirement planning, visit {Link: Sorted website https://sorted.org.nz/guides/retirement/how-to-plan-save-and-invest-for-retirement/}.
