The government has stopped paying contributions into its Super Fund just when markets are low. But it's not a great example to follow – unless you plan to live on New Zealand Superannuation.
The government's decision is going to impact the nest egg it was building to pay future generations' regular NZ Superannuation payments. It's ironic, because payments this year – had the government had a surplus to invest – would have had a very good opportunity for capital growth.
When it comes to your own retirement savings it can be very depressing indeed to see your nest egg shrunk. But it's one of the biggest human financial failings to buy at the top of the market and then bail out or fail to buy at the bottom. Or to think that you've missed the boat.
Sure the FTSE 100 bottomed out at just above 3500 in March, but at 4380 at the time of writing it's still historically cheap – having topped 6500 in 1999/2000 and again in 2007. Stock markets do rise over time even if they have the volatility we've seen in recent years along the way.
Likewise the Dow Jones Index dropped below 7,000 and is now above 8,000, but topped 14,000 in 2007. And the NZX 50 is sitting roughly at the same level as it was in 2004.
If you find these charts interesting it's worth visiting the MarketWatch website, which offers a lot of flexibility in how you view the data.
Assuming you don't believe we're facing financial Armageddon – then the chances are that these indices will fly again and money drip fed in now will rise handsomely. I mention this only because the day before writing I saw Robert Kiyosaki speak live in Auckland and his views on the imminent collapse of the US dollar were enough to bring on insomnia. Kiyosaki's views can be found in his new book: Conspiracy of the Rich , which can be read online.
That aside, if you're worrying about how long it's going to take to recover your paper "losses" in Kiwisaver or other stockmarket-based retirement investments then check out this "comeback calculator" on the New York Times' website.
Going back to the Super Fund, the government says the suspension will make no difference to the level of New Zealand Superannuation for the next generation to retire. But 53% of Kiwis don't believe it – according to a ShapeNZ survey by the New Zealand Business Council for Sustainable Development.
Without a fund to pay for superannuation payments to retirees it will be very tempting, or even essential, for future governments to cut payouts as the over 65s rise in both numbers and the percentage of the population.
The answer to this uncertainty is to save now – to ensure you can actually live later.
Do you have any retirment saving tips or ideas?