Mercer’s KiwiSaver Sentiment Study reveals that while 39% of New Zealanders would prefer to retire before age 60, most (65%) don’t expect to actually cease work until after age 65. Only 9% of New Zealanders would like to retire before reaching 50.

Across the Tasman, 51% of Australians prefer to retire before age 60, while only 44% expect to cease work when they are older than 65. As many as 17% of Australians would like to retire before they reach 50 years of age.

Bernie O’Brien, head of Mercer New Zealand, said while the comparisons showed there were important differences between the two nations on the issue of retirement expectations and preparedness, it highlights a concerning gap between when New Zealanders would like to retire and the reality of when they are likely to retire.

“The contrast between the two countries, New Zealand and Australia, is interesting, however, the contrast between the two perspectives, preference and expectation, is what we need to focus on.

“Mercer’s study tells us that more Aussies than Kiwis want to retire before age 60, and more Kiwis than Aussies expect to continue working beyond age 65. We think the differences reflect the fact that there’s been an increase in voluntary participation in Australia’s 15-year-old retirement system, which provides an achievable model for Kiwis to aspire to,” O’Brien said.

New Zealanders are also more likely than Australians to anticipate relying on government assistance once they retire.

Government assistance, such as the aged pension, is projected to account for 22% of retirement funding for Kiwis, and only 13% for Australians. However, superannuation will account for 43% of retirement funding for Australians compared to just 27% for New Zealanders.

Another key difference in attitudes was that Kiwis were far less likely to turn to their employer for information about retirement planning. Reflecting in Australia the enhanced role of employers in selecting default superannuation funds, 45% of Australians expected their employer to provide information and education to help them prepare for retirement compared with just 4% of New Zealanders expecting the same.

O’Brien said New Zealand employers can expect to take on more responsibility in the future.

Mercer’s study of 508 working New Zealanders aimed to better understand their sentiment toward KiwiSaver, including their understanding of and attitude toward the plan, as well as readiness for retirement. In addition to the direct findings, Mercer included a cross country comparison between Australia and New Zealand, drawing from its recent Financial Literacy and Retirement Readiness study undertaken in Australia.