Diane Maxwell: New Retirement Commissioner
At first glance, the new retirement commissioner, Diane Maxwell, seems a bit young for the job. After all at her age of 46 most New Zealanders are still trying to figure out how to pay the mortgage and wrangle the kids, retirement seems a very long way away.
However, Maxwell, considers her relative youth to be an advantage. She views retirement planning as just part of an overall life financial plan, rather than a discrete activity restricted to those nearing the big six five.
Her point is that people in their mid-40's or younger, should be considering their retirement income as part of the bigger picture.
In the broader context, she wants retirement savings to come out of the closet, and become a conversation for polite discussion. While we are more than happy to describe our adventures in house buying and renovations, over a beer at a BBQ, we are far less inclined to discuss budgets and financial planning in general.
Spending money is seen as a topic for polite conversion, but saving it, far less so. Maxwell would like to see it become acceptable to not just talk about the great bargain you just found at The Warehouse, or how you got a deal on the new skinny jeans at Glassons. Instead she'd like to see us embrace the idea of planning and implementing a budget as sexy too. It should be acceptable to gloat about your new higher Kiwisaver contribution, or other savings targets you’ve achieved.
Maxwell would also like to take the conversation to every level of society. Today most of the conversation happens with government, the savings industry and academics. She sees it as key that the everyday person gets involved as well.
Maxwell believes the key is financial literacy, a topic which should start in school but should also be a subject of life-long learning.
Maxwell describes as "three pillars" the components of retirement income for most Kiwis:
- New Zealand Superannuation which is not means-tested for most who are 65, has lived in the country for at least 10 years
- Kiwisaver, the successful fund has now got around 2 million New Zealanders enrolled in it. Many contribute via their employers, but self-employed can also contribute and get government contributions. Kiwisaver funds are not available until you turn 65 but then can be withdrawn as a lump sum
- private savings
In particular, she sees that women enter retirement in not nearly as good financial shape as men. Women suffer from the double hit of not just earning less money over a lifetime, compared to men, but also of having a higher life expectancy which means that they need to have bigger retirement savings. Women who take time out, or work part-time while their kids are young are of course particularly badly disadvantaged.
Society is changing significantly; as the baby-boomers start to retire the number of retirees to working-age population will soar. However it's possible that the baby-boomers, will re-invent retirement, just as they have every other life stage. The debate has already begun, that with the raising life expectancies, whether 65, a figure originally decided on for pensions by the Prussians over a 100 years ago, is still appropriate. The previous Retirement Commissioner had already argued with the government, saying that the age of eligibility should gradually rise to 67. Maxwell hasn't yet stated a view on this contentious subject.
She does however have a message for New Zealanders; stop being complacent. New Zealand has one of the most inclusive retirement incomes in the world. But few of us would be happy living on either just Super, or Super combined with minimum Kiwi Saver contributions.
It's not enough to keep on paying into Kiwisaver when you are employed and expect to live a retirement full of overseas trips and new cars and a well-maintained home.
Maxwell Diane Maxwell brings some substantial banking industry experience to her Retirement Commissioner role. She is also looking to incorporate her personal experience of being part of the Pasifika community; her husband is Samoan, to ensure that Maori and Pasifika are included in the conversation. She is also discussing using the new social media methods to connect to younger people. It will be interesting to watch for new developments on the commission’s website sorted.org.nz