Do you want to enjoy your retirement years in New Zealand? New Zealand is a fantastic place to retire to!
New Zealand is famous for its beautiful natural environment, climate, relaxed lifestyle and overall quality of life.
New Zealand has traditionally been very popular with retirees from all over the world looking to move overseas.
According to a recent estimate there are currently about 60,000 pensioners from Britain alone living in New Zealand.
Older New Zealanders are happier than any other age group in New Zealand.
Their contentment comes from family, friends and having time for recreation activities like walking, gardening, swimming, bowls, fishing, golf, dance, yoga and cycling and many also enrol as students in community or university classes.
Long Life Expectancy
Relevant financial information on retirement in New Zealand
New Zealand Superannuation
New Zealand Superannuation, NZ Super, is the government pension paid to Kiwis over the age of 65. Any eligible New Zealander receives NZ Super regardless of how much they earn through paid work, savings and investments, what other assets they own or what taxes they have paid.
To be eligible for NZ Super, you need to be aged 65 or over and be a legal resident of New Zealand. You also need to have lived in New Zealand for 10 years since age 20, with five of those years since you turned 50. Time spent overseas in certain countries and for certain reasons may be counted.
The level of NZ Super payments is set by the government each year. The rates are reviewed and adjusted to take into account any increases in the cost of living and average wages. NZ Super is paid fortnightly.
The after-tax NZ Super rate for couples (who both qualify) is based on 66% of the ‘average ordinary time wage’ after tax. For single people, the after-tax NZ Super rate is around 40% of that average wage.
There is no ‘retirement age’ in New Zealand.
NZ Super is paid from age 65, but you don’t have to stop working to get it. These days, more and more people are working beyond 65 either full-time or part-time.
If you get a pension from an overseas government, your NZ Super payments may be reduced by the amount you receive from overseas.
Depending on your personal situation you might qualify for extra help from the Government on top of NZ Super. This could include help with ongoing health and medical costs (Disability Allowance) and housing costs (Accommodation Supplement).
You may also qualify for other assistance – for example, if you face an emergency situation, or if you need help with essential costs.
A Community Services Card can help you with the cost of healthcare. If you qualify, you’ll pay less on some health services and prescriptions.
KiwiSaver is a voluntary work-based savings scheme set up by the government to encourage New Zealanders to save for their retirement.
If you're employed, you can choose to contribute 3%, 4% or 8% of your gross (before-tax) wage or salary to your KiwiSaver account. Your employer has to contribute as well – at least 3% of your gross salary.
If you’re using KiwiSaver to save for your retirement, you can’t touch your money until the age you get New Zealand Superannuation (NZ Super) which is currently 65. If you’re between 60 and 64 years old when you join, you can’t touch your money for 5 years.
How much capital you will need for your retirement?
This will obviously depend on the lifestyle you would like to have during your retirement years. For a general idea of how much money you should have available, this Retirement Planner is a good tool.
Do you want to transfer your UK pension to New Zealand?
UK citizens might be able to take with them any UK private pension they might have.
UK pension transfers are a complex area and it is important that you get professional advice regarding the suitability of a transfer.
'UK Pension Scheme Changes in 2014'
'There are a number of changes planned, with greater flexibility being available with personal pensions and members no longer being required to purchase an annuity. However, the UK government is also considering removing the ability for members of UK Public Sector pension schemes to transfer their benefits to personal pensions, ie defined contribution schemes. In effect this will be locking members into those schemes for life. The public sector schemes are still very good schemes and provide pretty much guaranteed benefits but this could restrict some flexibility.'
'What is interesting though, is what impact this will have on QROPS transfers from these types of schemes. If they are looking at banning transfers from defined benefit schemes into personal pensions then it is likely that they will no longer allow QROPS transfers from these types of schemes as well. Obviously we do not know the full impact on QROPS transfers but it is looking likely that there may be restrictions on these types of schemes which will include a number of Public Sector schemes, such as Teachers, NHS, Police, Fire Service, Armed Forces and Civil Servants in Local Government Schemes.'
'New migrants with benefits left in these types of schemes may want to consider their options over the next few months as the UK government are potentially implementing these changes from April 2015.'
'Migrants also need to be aware of the recent tax changes and the 4 year exemption that is available and expert taxation advice should be sought.'
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If you want to find out more about your options for retiring in New Zealand, contact Dr. Carsten HallwassContact Dr. Carsten Hallwass