\u201cChanges to NZ Super are inevitable, and it\u2019s because we need them. It\u2019s unsustainable at the moment, with our ageing population.\u201d<\/p>\n
Like many others, she suggests lifting the retirement age, and\/or means testing. A third option or lever could be to change how increases are calculated. <\/p>\n
\u201cCurrently, they\u2019re based on wage growth. There\u2019s conversation around shifting that to the Consumer Price Index.\u201d<\/p>\n
A combination of all three potential changes could work, said Delgado. <\/p>\n
\u201cThat way, you spread the cost and benefits, and it\u2019s less of a harsh than sudden change to one area.\u201d <\/p>\n
She cautioned against relying on importing workers to prop up NZ Super. <\/p>\n
\u201cRealistically, [immigration] is not something we can rely on.\u201d <\/p>\n
She said immigration is led by economic cycles, which can also result in outflows of young Kiwi workers.<\/p>\n
By 2050, nearly one in four New Zealanders will be over 65. Photo \/ 123RF<\/p>\n
Delgado both expects and would like to see changes to KiwiSaver<\/a> to ensure that her generation has more savings come retirement. <\/p>\n \u201cWe\u2019ve already seen some of those changes in the Budget earlier this year. It\u2019s a good start. But our savings levels are still low. The bigger problem with KiwiSaver is that it\u2019s still not compulsory, and that\u2019s a change we need. From there, it would be great to lift contributions and look at policies that incentivise Kiwi to contribute more.\u201d <\/p>\n That would be in line with a lot of other OECD countries, said Delgado. <\/p>\n \u201cYou just have to look over the ditch. They have a 12% contribution [to Aussie super, the equivalent of KiwiSaver].\u201d<\/p>\n Speaking to her generation, Delgado would like to see her peers take action themselves. Moving beyond property investing was a good step, in contrast to their parents, who had pulled out of capital markets after the 1987 crash and turned to property investment.<\/p>\n She also talks about the need to ingrain the importance of savings into our culture, especially if NZ Super undergoes structural changes.<\/p>\n One positive generational change on that front already taking place is younger people investing in platforms such as Sharesies<\/a>, which have removed some of the barriers from earlier generations getting into investing, Delgado said. <\/p>\n \u201cWith my peers, those conversations around, \u2018hey, I\u2019m investing in shares and equities,\u2019 are becoming more common and it\u2019s a positive change. As a younger generation, we shouldn\u2019t necessarily be waiting for these policy changes to start thinking about our retirement as well.\u201d<\/p>\n Younger generations can change their financial futures with small steps, she said. In short: start early, save smart, and don\u2019t assume that the future of superannuation will look exactly like the past.<\/p>\n