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Pension age change a minor hiccup for advice clients

Advisers may need to revisit some of their client plans if the Government goes ahead with its proposal to lift the age of eligibility for the pension.

Wednesday, March 8th 2017, 5:59AM 1 Comment

by Susan Edmunds

Prime Minister Bill English said this week that the Goverment planned to slowly increase the age, from 2037. By 2040, it will reach 67.

Michael Dowling, president of the Institute of Financial Advisers, said there would be a filter-down effect.

“The 67 retirement age will affect those born after 1974. The majority of clients doing retirement plans will fit in the adjustment period, so once we see how that works, it will have an effect.”

He said many clients talked about semi-retirement at an age earlier than 65, and that could be pushed later.

But most clients had a rough plan, rather than something that was immovable. “If they need to work for six months longer, they would cope with it. The follow-on effect is potentially more saved for a slightly shorter period.”

He said the change was not a big issue but something to remember in client reviews.

IFA chief executive Fred Dodds said it was another signal that superannuation would continue to be a political football. “Waiting for an untouchable solution will only waste more time. Taking advice should be on many New Zealanders’ minds, be it 65 or 67, it is the years after that which need planning for.”

The proposal revealed this week is contingent on National winning the election and English has indicated that, should a coalition partner object to the change, it could be dropped.

Tags: NZ Super

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Comments from our readers

On 9 March 2017 at 7:53 am dcwhyte said:
The proposed changes are relatively minor in the grand scheme of things and represent a 'toe in the water'. If this becomes a serious election issue, you can bet your bottom dollar National will retire their proposals.

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