Only a third of Gen-Xers plan to retire at 65 – study

Find out how you and your clients can stay on track

Only a third of Gen-Xers plan to retire at 65 – study

The oldest members of Generation X are only seven years away from being able to collect a pension, but only a third of Gen-Xers are planning to retire at 65, new research has revealed.

“If that isn’t a stark reminder of our age, then I don’t know what is,” said Fiona Mackenzie (pictured above), Gen-Xer and ANZ NZ managing director for funds management.

“These things do tend to sneak up on us and all of a sudden, we’re talking about retirement. It can be a bit overwhelming, particularly if you feel like things aren’t on track as you’d imagined they would be.”

When asked by ANZ Investments at what age the respondents expected to stop full-time paid work and retire, 35% of the group aged 45-54 who were used as proxy for Generation X said they will retire between 65 and 69, 16% said they plan to give up full time work in their 70s, 2% expected to work into their 80s, while 3% said they will never retire.

There were also those who were looking to retire from full-time paid work before they reach 65, with 9% expecting to retire before 60 and 10% expecting to retire between the age of 60 and 64.

A quarter of the respondents, meanwhile, were uncertain when they would retire, because there were too many factors to consider.

“The way we have traditionally thought about retirement is changing,” Mackenzie said. “We are living a lot longer, and more people are working beyond the official retirement age of 65. For some this is out of necessity, but for many working into their late sixties and even seventies this is a lifestyle choice.”

There is no magic number people need to have saved to retire, the ANZ leader said, as the amount will vary for each person.

“It is really important for people to check in and get an idea of what that number is for them,” Mackenzie said. “That will help them create a plan for what they need to do to reach that goal.”

Those who have already retired were also asked by the researchers whether they retired earlier or later than planned, and why.

For those who retired earlier than planned, health was the top reason.

Among those who retired later than planned, 52% said they had wanted to keep working part time and 19% said they wanted to keep working full time.

“Unfortunately, 25% of people who had retired later than planned said it was because they didn’t have enough money to retire comfortably,” Mackenzie said.

“We hope the survey results will help more people to think about what sort of lifestyle they’d like to have after 65 and whether they are on track to achieve it.

“Even for the oldest members of Gen X, there is a lot they can do before they reach 65. These tend to be very financially productive years, and even if you are planning to keep working beyond 65, it is a good reminder to stay focussed.”

ANZ provided a checklist for Gen Xers to see if they are on track:

  • Use a KiwiSaver calculator to help you work out how much you are likely to have saved by retirement, how much you might need, and whether you’re on track
  • Check if your fund is the right for you depending on your age, desired level of potential returns, and how comfortable you feel with experiencing ups and downs in your KiwiSaver savings
  • Consider increasing your employee contributions or make voluntary contributions to help grow your KiwiSaver savings. Kiwis aged 18–64 who contribute up to $1042.86 annually are generally eligible for a matching government contribution of up to $521.43.

Are you and your clients on track? We’d love to hear from you in the comments below.