So, when did retirement become a ‘thing’?
Retirement was added to the lexicon less than one hundred years ago. Relatively speaking, it’s still a shiny, new concept in the working life of mankind. And, if you’re prepared for it, you could enjoy it more than you enjoyed your youth, after all you should know yourself and what you want a lot better by now. But when and how did retirement begin?
Thanks to a strong platform of social change, the first New Zealand Labour Government was elected in 1935. In 1938, they introduced the Social Security Act. This established New Zealand as a welfare state. A welfare state takes for granted that the government is responsible for protecting the interests of all segments of the country’s population, including the elderly. One way of doing this is by providing retirees with a pension. Whether you are an advocate of a labour government or not, it’s thanks to them that retirement became something you could plan for and, as a result, enjoy.
Within that original Social Security Act, was the provision of a universal and not means-tested Superannuation available to retirees from the age of 65. This Superannuation is still available today.
Is 65 the official age for retirement in New Zealand?
There has never been an official retirement age in New Zealand. However, this policy shaped the idea that you would retire from the workforce, at the age of 65, and it’s from here that the concept of ‘retirement’ grew.
Prior to this, there really wasn’t any such thing as retirement. If you were alive, you worked, and you dealt with whatever life threw at you without much support from the government. Life expectancy was also much lower, and many people never made it to what we now consider old age. Clearly that has changed dramatically since the 1930s.
Many people live much longer than they did between the two World Wars, thanks to medical advancement, vastly improved living conditions, better hygiene, a superior diet, and more health-related exercise. In 1800s New Zealand, the life expectancy was, on average, under 30 years. In 2012, the average life expectancy was 80+ years making New Zealand one of approximately 20 countries for which that was true. The rest were well below that. The most recent data shows that ages well over 80 are becoming more the norm.
Thanks to these changes, we now actively think about how we want to live our lives once we do retire, how we are going to fund that lifestyle and we begin our retirement planning to make it happen. Nowadays, thanks to the overall better lifestyle we live, lots of New Zealand retirees seek a highly active retirement.
We know from experience that our clients look forward to doing things such as travel, sport, and being actively involved with their grandchildren when they retire. And that’s just for starters. But they are also addressing the tougher questions, such as what happens when they are no longer able to live independently.
There is so much to think about when it comes to retirement now but possibly the biggest consideration is how to pay for it.
3 Ways to make retirement your best time ever!
- Contact Britannia Financial
Britannia Financial can help. It’s our mission to get to know you. To find out who you are as a person, and what’s important to you when it comes to your retirement planning. You may not have all the answers yet, but we will work with you to put together the best possible plan to help you achieve the financial goals which will allow you to live your life, on your terms, once you do retire.
- Download and read our free Retirement Planning Guide
Our free Retirement Planning Guide includes a handy budgeting calculator to get you started. Simply fill in the form and the guide will be in your email inbox a few moments later. It’s a good start to getting an idea of the cost of retirement.
- Read the next article in this newsletter!
Our next article, ‘How much does retirement cost?’ will help you determine how much your retirement might cost, plus some tips on how to bridge the gap between the actual cost versus New Zealand Superannuation.
We can help you work through this in person, if that’s easier for you. Fill in our assessment form, contact your expert financial adviser, or give Britannia Financial a call on 0800 500 811.
Call us today and make an appointment. Retirement comes quicker than you think!
SHARE THIS PAGE