Monday, August 11, 2014
America is undeniably facing a retirement calamity. Millions of boomers fear that they will outlive their savings. Yet many retirement experts think New Zealand may have answers that may help avert a crisis here.
Although New Zealand has a population of just 2% of ours, it has a similar swell of postwar boomers who were not the greatest savers. However, the huge difference lies in the seven-year popular voluntary KiwiSaver retirement savings plan that is helping to transform its country into a nation of savers. Everyone can have a KiwiSaver plan for life, and its transferable from job to job. This is different from plans in the U.S. because how much you save for retirement, depends greatly on whether you work for an employer with a 401(k) type savings plan or pension plan. “Only about half of the U.S. workforce actually has access to an employer retirement savings plan or pension.”
The KiwiSaver has been “the most successful savings scheme in the last 100 years.” Since its inception, 2.3 New Zealanders have signed up.
See Richard Harris, Why New Zealand’s Retirement System Works So Well, Market Watch, Aug. 5, 2014.