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The good news is that perhaps you have to live that times for 10 or 20 years and it will be over.Quote:
Originally Posted by MBZ460
The bad news is the future for your children and your children children :(
It would be better to change the subject, 10.30 am it is far to early to reach for the bottle :D
Cheer up, it's not that bad!!!!:pQuote:
Originally Posted by MBZ460
Yeah, I am still very thankful I am in the best place to hopefully avoid the worst...
One of the issues that hasn't got much page space in this thread is that many workers, particularly manual labourers, may not even live to the time of their 70th anniversary.
While younger generations who now mostly use mechanical devices to assist their work, many of the people at or nearing retirement have worked all their life doing all the work manually. e.g. My back is shot from a work injury in an institution that now has a "no-lift" policy.
For people like these raising the aged pension age to 70 may only mean that they go onto a Newstart allowance or Disability Support Pension for the period between the current aged pension age to the revised pension age. This will save the country nought but ony serve to inconvenience the former worker more.
Why is it only the aged pension age and asset calculations that are being discussed (by both flavours of politics) and not the superannuation tax incentives for higher income earners. And I'm not referring to wage earners at or above above the median wage, I mean people with incomes above $150K or $200K per annum. If super contribution taxes were raised to the standard rate for incomes over $150K it would have a noticable difference the Governments tax take.
I've been reading a lot of the comments here. As an adviser ( there are good un's and a few not so, most are good and help their clients improve and change many aspects of their lives), I see many people in their mid to late 50's, some even in their 60's and they have no financial plan in place. Hence I am fairly objective when it comes to the topic at hand and not emotional. Nor am I good at sugar coating it, just ask one of my clients ;).
Things to know
- Regardless of retirement age, the biggest issue is lack of financial literacy. The more financially literate people are, the better overall outcomes. It should be taught at schools and in our work places.
- The Pension was for when people would retire and fall off their perch 5-6 yrs later and the pool of workers was much larger. Now days that has turned around. Pool of workers is lower and people are living much longer.
- Super has been around for 22 years, that's a long time to get ahead. Peoples financial situation can be turned around in 5-7 yrs with the right framework and investments. So, like my ma, who have used the " super hasnt been around for long, bollocks". More a case of lack of financial literacy, not seeking advice or listening to armchair investors. Or as most people, they do nothing until it is too late and retirement is staring them in the face. if they were thinking and doing something about it 10-15-20 yrs ago, their outcomes would be massively different.
- Such and such lost X in the GFC. Well where was it invested? How much had it earnt previously? What fund are you in now? How far off retirement are you? How much time and effort have you put into your super. here's a great article :D When was the last time you looked at your super/insurance statement. | Stevo's General Financial Advice Page that goes into more.
- This is a big one for me. Who works their entire life to end up on the pension in the first place? For that to be a goal is pretty sad in my opinion. Sadly, again that is what is in order for most people. They own their own home and live on the pension. Almost 97% currently on $37k or less. If your 10+ years away from retiring, there are many things that can be done to improve your outcomes.
- The onus on anyones retirement should be on them. It's your responsibility and no one elses. Retirement should be something embraced not feeling reticent about it.
- I said earlier in this post that those relying on a pension in the future are optimists. Also remember whether 70 becomes the new age, it is for being eliglible for the aged pension, not when you may or may not wish to retire. There's alot of strategies around the best way to retire.
Now I know some of my comments may cause a bit of a tongue lash, but it is because it is true. There is nothing worse that looking into a client's face and seeing them realise that they either cannot retire, retire on the income they wanted to or will have to work longer than expected. So for those whereby retirement is a good 10+ yrs away, you should be concentrating on building wealth between now and then.
If you don't seek advice, then do your own home work. If you need simple plain English info then go to my blog Stevo's General Financial Advice Page | Improve your current financial position, give you certainty around your future& increase the value of your assets . I am very passionate about what I do and the in educating people and hence the blog. It also show's that is more to an adviser than just investing. I have already answered many general queries for other members on here, so if anyone has any they want to ask in private, please PM me.
Regards
Stevo
P.S. Note this isn't a drum up business post for Stevo, read some of my blogs and you will learn something but only if you want to learn and improve your current situation. Responsibility for your future lies squarely on your shoulders and no one else's.
Hi SteveQuote:
Originally Posted by stevo68
Somewhat sage advice, however even though compulsory super has only been around for 22 years, many employees only take the super guarantee payment provided by their employer. In my case while I had a private super fund before the compulsory date, a lot of my money was being swallowed up by a "financial advisor" who turned out I had never met or received any financial advice from.
Apart from that, since the mid 1990's I have sacrificed 10% to 14% of my pre-tax salary to super and as a result my super balance has moved from tens of thousands to hundreds of thousands (even though for a number of years on several occasions the balance went nowhere or backwards in spite of around $30K PA being deposited.)
However I have still had only about 25 years to invest in my super, where had I had 30 or 40 years my balance would undoubtedly been over a million and somewhere near adequate to fund a reasonable retirement, at a time of my choosing. As it is I will have to continue working, with my dysfunctional back for as long as I am able to retain a job without the freedom of choice in a retirement age.
Most of my peers are in a similar or worse position.
BTW: At the current status of the health industry, I have a fear that it will be illegal for nurses to retire until they fall off their perch (like a friend of mine who worked in this one institution for 40 years, caught influenza at work and died in intensive care a few days later. At 66yo she never got to retire.)
You are very optimistic, I take the view that both benefits eventually and gradually will be wiped out. An unemployment benefit for a period of 6 months is like to be in the cards.Quote:
Originally Posted by Lotz-A-Landies
Now they are looking into the disability pension and do not surprise me that they will make the test to qualify so harsh that if the person cannot blow dust from a desk top then perhaps he/she will be disable.
Your idea and good one I my add of looking into the higher income earners it is not in the cards of both big political parties. If someone come with that idea will be call as socialist or other colorful names :)
I work with a lot of nurses and docs up here and helping to sort out their super and salary packaging. You also raised some excellent points. Whether you have an adviser or not, a good one is someone you actually know and catch up with 3-4 times a year plus emails and phone calls. It also raises the point that regardless of whether you have an adviser or not, you are still ultimately responsible for your current and future financial situation- SO PARTICIPATE. When I put a plan together for a client, it is their plan, not mine. I can only advise.Quote:
Originally Posted by Lotz-A-Landies
You also pointed out that people you know only took the gov contribution. Again, a lack of financial literacy and in some cases, apathy. If you are in your 20's and 30's, then extra contributions that could be made would go towards paying off a mortgage/ schooling. However it is worthwhile putting some away as it is time that creates wealth, that and compound interest. Even an extra $50 a week, direct debited over 20-30 yrs will make a very nice difference.
Again, people need to take more responsibility. I guarantee that if I were to sit down with 20 people from here with their super and insurances statements, that I would find concerns/issues with over 1/2 of them. Most will be in the wrong super fund and most will be well under insured. Essentially ticking time bombs. Not pretty I can assure you when the bomb explodes,
Regards
Stevo
This morning as I was driving up to the launching spot to join my regular Tuesday morning kayak paddling group :), I heard John Hewson discussing that very topic.Quote:
Originally Posted by Lotz-A-Landies
He pointed out that the tax expenditure bill (his phrase for things like super incentives) was about the same size as the pension bill.
he also said that while everyone seems to be alarmed at how much the pension bill is going to rise in the next decade, the bill for the super incentives will rise much more.
He made the point that super incentives tend to favour the rich while cuts to the pension affect the poor.
So there is at least person looking more broadly at the issue.
If the diesel excise doesn't go in this budget then you know there is no 'emergency' and that 'everyone' is not 'being asked to share the hurt'.
It's funny how such a massive budget crisis doesn't need the billions in revenue from the carbon price, nor the hundreds of millions from the MRRT - those sources of income are able to be lost, with the deficit being paid for by things like the pension.
Anyone want to buy a bridge?