Thread: Pension Age may move to 70

Originally Posted by redrovertdi

Im 42 and work for myself, times have been tuff since the last federal government and i put $25 a week into my super to keep the tax office at bay[i dont want another audit], ive accepted the fact that i will have to work till i die and thats that, but what happens to all the lazy welfare dependents that have never worked? im sure there will be a continuation hand out for them....

Yep,, you can guareantee they will have all they want, when they want it.

I've got Super,, luckily I've had it for some time, lost a heap a few years ago, but it'll be ok I guess.
I plan on semi retiring in 4 years (55) and travelling. Hoping to gain some work around, and living relatively cheaply. We'll see how it goes I guess.

I've had two major set backs for my trip away, and I'm not going to let any Govt take this chance away.

Originally Posted by bob10

tell me again, did you win or lose out of the GFC? Bob

I think everyone would of seen asset values deflated. If you do not sell the asset then you do not lose money. It is a paper loss.

For example if you look at CBA shares. Prior to the GFC they were trading around $64 (approx)

At their lowest price after the GFC they traded at around $24

They basically lost two thirds of their value through peoples fear. Did they all of a sudden stop making obscene profits? Are they only worth a third of what they used to be worth?

And more importantly if you had 100,000 shares in CBA did you lose money? well if you sold them for $24 in a panic you would of lost out. If you kept them it didn't take too long for them to go back up to the mid $50 mark and currently trading at $76.50. You would of still had the asset, this being the number of shares being held.
Imagine if you bought $100K worth of CBA share for $24, you would of tripled your money in a relatively short period of time.


So did you lose money? I think anyone that exposure into growth assets lost money, including family homes. But only on paper, unless the loss was crystalised and put into cash. If you didn't sell anything then you still have an asset paying interest or dividends and earning 6% pa but the growth side of the equation was all negative.

Some people may buy shares offering 6% or even 8% dividends knowing that the capital value will fluctuate (Can't get 6% in a bank at the moment). Ok they are making 6% interest but if we add growth say 24% rise in the share price then return is 30% if we saw negative growth of 20% and add the interest of 6% (dividends) the the return is -14% however they still got paid 6%. They haven't really made the growth or the loss unless they sell. and therefore the capital Gains tax was introduced.
Therefore if we look at these funds returning 60% plus a small component will be income through interest or dividends but the bulk will be growth through the unit price increasing.

If somebody had the coin to buy 100000 CBA shares - even pre GFC - I would imagine the probably had the wisdom to hang on to them during the tough times, and as you say, more than likely took advantage of the low.

Handy if you have the money to do it though

Originally Posted by Chucaro

Uncle Ho I remember that kind of practice in the early 70's and was one of the reasons why so many people did not contributed to the private "invited"supa. No to mention what will happens if the company went broke.

One very large Australian company in those days invested the Superannuation money of the staff in - the company's shares! This practice is not kosher any longer so they do it rather more innovatively these days.

Today, because of bad management, they are a shadow of their former importance.

Bob

Just means I'll be on "Newstart" another five years.

During the period after the GFC, say from March 2008, when returns from shares, etc dropped and that was your only income source could you get by with less driving, less buying, eating less? There was no point in selling your property if you lived there - as the probably overheated real estate prices also tumbled. Property values are rising now but not yet back to 2008 values.

Bob

G'day All,

Hmm read some interesting commentary in this post. Let me start off with this... Are you qualified to cut your own hair?

Recently I have met some people who insist that he or she can do my job better than me ( I am a non aligned financial adviser..check out my FB page and threads in The Verandah)? For some reason people think that since they use money every day, they can trade stocks online, check their prices in the newspaper and make their own investment decisions. What a mistake!

Whenever I get a haircut I sit in the barber chair and watch the person cut my hair. I've seen people cut my hair for over 30 years. Do you think that means I'm qualified to cut my own hair? Of course not! I've seen my handy work in the past and it is not good.

The same can be said for many DIY "investors" when it comes to their financial future. Unless you have the experience and qualifications, seek out someone who does, for you and if relevant, your families sake. 97% of the population retiring on $37k or less is not fiction but fact and most if not all are DIY. Retirement is coming one day folks, are you on the money?

Now in the context of changing retirement/pension age to 70, then to be frank if that is what you have worked your entire life and that is a goal, then that is very sad. It generally happens because people have not made a plan in their 20's, 30's, 40's etc. Hence they hit retirement, generally own home and live off pension. Many baby boomers are having to use their super to pay off their mortgages. Why is this happening? Because people don't plan for it, they don't invest for the future and they have an apathetic attitude. I know this because it is my industry and I see people coming in mid 50's saying what can we do. Generally we can improve their situation but some you can't. Why? Because time is the biggest creator of wealth. When I say wealth, I'm not talking a ferrarri and a Mc Mansion, but wealth in terms of how much you need to retire on an income that you want to retire on.

I'm pretty passionate about this and blunt sometimes because I love helping people change their situation, not just now but in the future. Every single person on here who has given a "throw hands up in the air" response can change things, if they want to. But to do that seek advice from a specialist. Yeah yeah, there are good ones and not so good ones. Yes the market it volatile, but over any 10 year period, you will always come out ahead. Investing is long term, not short term. FYI- the average return of my 3 funds over last 12 months was 24%. Now even if it dropped by 10%, over 2 years the average return is still 19% over 2 years.

The worst thing anyone can do is take note of some mates mate who lost $$$ on their super. Why? Because you have no idea where they were invested, how it was invested, when they pulled out of the market. Did they pull out when they should have been buying? My mum did this ( prior to me being in this industry) took her money out of a super environment and stuck it in the friggin bank getting 4% return ( 1.5% if you allow for inflation). Why because the bank told her and she heard of people who had lost on their super. I am now getting her back into a super environment, return around 8-9% as she (70) has good genes in the family and will most likely be around many more years and personally at this stage don't want to be footing any bills whilst raising my own family.

If you care about your financial future, take control, seek advice generally by someone who knows someone ( like me ) and read some of my info in the verandah. How your retirement pans out is 100% up to anyone of us, especially if you have 10+ years until retirement. Feel free to barrage me with questions here or via PM. The number one person to me is the client. Outside of that I can provide general advice which I hope can help anyone of you,

Regards

Stevo

steveo 68 speaks the truth.
It ain't rocket science, ya simply have to THINK, about how you will "LIVE", when you retire,....and ya can't plan that in 5 years, YA HAVE TO PLAN IT.
I was divorced in 1980 (with nothing),....& I retired comfortably in 2000,.....because between those times, Wifey 11 & I knew we, well me anyway, had some "catching up" to do, if we wanted to enjoy our later years in comfort.
So, we both worked our arses off, put as much as we could into super & shares etc. Result,.....we are self funded retirees, & we will probably never qualify for the pension, but,...we are happy.
Cheers, Pickles.