Australians die richer than in retirement: study

dazz49 · Senior Member

Buckle up. Its a rough ride

brickies · Guru

Remember the market always have it's up and downs , If all fails we live in a lucky country the pension is like having $1,000,000 in the bank , But you can't touch the capital only the the returns .

Cloak · Guru

While it's not returning atm I'm using super to transition to retirement stripping tax and doubling mortgage payments on the output while salary sacrificing and buying cheaper units on the input... Short term pain long term... I hope, gain.

Trick is to alter things to suit the trends..

dazz49 · Senior Member

brickies wrote:
Remember the market always have it's up and downs , If all fails we live in a lucky country the pension is like having $1,000,000 in the bank , But you can't touch the capital only the the returns .

A thought provoking answer. Your right,,, probably need a million if you were living only off the interest to be equivalent to the pension. So are those who spent or wasted their dough on booze. cigarettes and a good time now double dipping when they get the age pension. ??? Full age pension per couple $30900 per annum plus the benefits of house / rent assist./ power assist you prob need about 1.3 million at 2.7 % to make $30900, yet if you have that amount you can get no pension, but a seniors health card as a token. So the only way self funded retireees survive is to take the risk in the share market to get a better return on investment or spend capital.. To be frank to have to survive on the pension as the sole income source must be difficult.

Cheers Daz

Young Simmo · Guru

dazz49, You seem to have a chip on your shoulder when you say, "So are those who spent or wasted their dough on booze. cigarettes and a good time now double dipping when they get the age pension".

I am one of those and am very happy that I have had an exciting enjoyable life. We now live on the pension very comfortably in our Park Home paying $125 / week, not 250 to 300 in a state house, life is a ball. As for double dipping, I payed taxes from 1954 till 2002, so I can sleep easily. Retired at age 62 after Bypass, so I cheated 3 years there as well. Not sure when compulsory super came in, but I do know it wasn't the rule in 1954. Now how many others share my sentiments?

Some people have very, very narrow views of the world.

Simmo.

dazz49 · Senior Member

Young Simmo wrote:
dazz49, You seem to have a chip on your shoulder when you say, "So are those who spent or wasted their dough on booze. cigarettes and a good time now double dipping when they get the age pension".
I am one of those and am very happy that I have had an exciting enjoyable life. We now live on the pension very comfortably in our Park Home paying $125 / week, not 250 to 300 in a state house, life is a ball. As for double dipping, I payed taxes from 1954 till 2002, so I can sleep easily. Retired at age 62 after Bypass, so I cheated 3 years there as well. Not sure when compulsory super came in, but I do know it wasn't the rule in 1954. Now how many others share my sentiments?
Some people have very, very narrow views of the world.

Simmo.

Thank you for your comments

I actually asked a question of the forum, So are those who spent or wasted their dough on booze. cigarettes and a good time now double dipping when they get the age pension". I did not say anyone was double dipping. My views are not narrow, but I do have opinions. One of those is that Australia is becoming an over sensitive, politically correct welfare dependent state.

Cheers Daz

Plain Truth · Guru

dazz49 wrote:
Young Simmo wrote:
dazz49, You seem to have a chip on your shoulder when you say, "So are those who spent or wasted their dough on booze. cigarettes and a good time now double dipping when they get the age pension".
I am one of those and am very happy that I have had an exciting enjoyable life. We now live on the pension very comfortably in our Park Home paying $125 / week, not 250 to 300 in a state house, life is a ball. As for double dipping, I payed taxes from 1954 till 2002, so I can sleep easily. Retired at age 62 after Bypass, so I cheated 3 years there as well. Not sure when compulsory super came in, but I do know it wasn't the rule in 1954. Now how many others share my sentiments?
Some people have very, very narrow views of the world.

Simmo.
Thank you for your comments
I actually asked a question of the forum, So are those who spent or wasted their dough on booze. cigarettes and a good time now double dipping when they get the age pension". I did not say anyone was double dipping. My views are not narrow, but I do have opinions. One of those is that Australia is becoming an over sensitive, politically correct welfare dependent state.
Cheers Daz

Dazz,remember when you were putting money in a super fund you were getting tax concessions,concessions paid by people who were paying the full tax rate on their earnings,such as Simmo between 1954 and 2002

rockylizard · Guru

dazz49 wrote:
A thought provoking answer. ~~~SNIP So the only way self funded retirees survive is to take the risk in the share market to get a better return on investment or spend capital.. To be frank to have to survive on the pension as the sole income source must be difficult.
Cheers Daz

Gday...

Whilst I can, in some way, understand what you are trying to convey ... life in retirement is not quite as fraught with such distress.

If one understands the 'investment' world and its vagaries, then 'balance' the investments and monitor and react advisedly to changing circumstances, the 'share market' is not as risky as is often painted. It is a lot like life, I guess, it has its ups and downs ... and it is how one reacts to it (life and the market) will depend on how enjoyable and rewarding it may be.

Yes, I suffered like most others when the GFC hit in 2008 - but not ALL my investments were affected - only the few I had in a 'high return/high risk' area were greatly reduced. Such is life.

However, I did not sell those shares when they fell - I held them and today they are again back in a strong position, giving me a good dividend and helping my portfolio look healthy. As Warren Buffet advises - when the market is down BUY ... when the market is up SELL ... not the other way.

The share market is a LONG TERM investment - and like life, needs to be nurtured so that it lives and provides a stead return.

Interest Rates Graph.jpg

There is nothing wrong with drawing on perhaps some capital and the interest from the 'nest egg'. Invested sensibly, and also drawn down sensibly (wisely?), it may still allow a small consideration for the government provided pension.

Despite that, and I am quite certain there are very many members on this forum, living on just the full pension who find it is quite achievable - not the life of Riley perhaps - but definitely do-able.

Even in the "good ole days" my Gran was able to not only live on her pension but to also put some aside to cover her little holidays to Melbourne from Ballarat a couple of times a year. Albeit, she did not smoke nor drink, did not own a car and rarely frequented restaurants. And I should concede that life was a different to today's material world. hmm

She lived a full and happy life and died at 94 years from of a heart attack - with a small inheritance to we grandchildren.

Anyway - sorry to rabbit on - but there is no need to fear the vacillations of the market. One simply needs to be prudent, informed and cautious - and not overreact.

I guess living a 'prudent' life helps to

Cheers - John

Aus-Kiwi · Guru

I have about half in property and super.. What I don't get is why some super schemes are paying so low ??
In pension phase..

Hey Jim · Guru

Well put John,

I was taught by the Very Best. God bless Bernie Curran.

A Dollar's a Dollar. You can't go broke taking a Dollar.

Hey Jim

brickies · Guru

They take less risk in income phase ,Has at that age you have less year to recover large down turns

landy · Guru

I like Simmo Have paid taxes all my working life 1964 -- 2014 and still do.For many years of that time I was self employed worked 7 days a week and was taxed appropriately I also Like Simmo think now that I am past 65 and retired I should be entitled to the pension. Unfortunately the government do not see it that way, If you choose to eat some of your pie for lunch and save the rest for supper so to speak you will be discriminated against.
I would like to make it clear I am not in any way attacking pensioners I am jealous and wish I could get it, I also think all tax payers should be treated equally. Sorry for the rant.
Landy

-- Edited by landy on Thursday 7th of January 2016 11:52:33 PM

Cowboy7307 · Senior Member

Why is it that Australia has to make it ,the haves and the have nots ,Why not give every one the pension , add it to there income then tax them accordingly ,simple, then we would not have to listen to this BS

Desert Dweller · Guru

We're not risk takers. We both kept our super in the conservative part of our schemes. Our cash is invested in term deposits. Small reliable returns on both, we're not greedy. Never lost anything even in the GFC. We're on a part pension, living like Kings!

brickies · Guru

Who are the 2% on this post , It's great to see so many financial situations and we all can do what we want , Some still pay tax to help one that collect a pension we are very good sharers and god love you all .

Cupie · Guru

Lots of media & political attention to the cost to the economy of Pension et al payments in Australia. The following article from 'Your Life Choices' puts it in perspective.

(ps. As I type this the subject is being discussed on ABC Local radio 612)

...............................................................................................

Debbie McTaggart

A report released by the Organisation for Economic Co-operation and Development (OECD) has confirmed what we already know Australian pensioners dont have enough money to live on.

Pensions at a Glance 2015 compared Australia to 33 other countries and found that it ranks second last when it comes to social equity. A whopping 36 per cent of pensioners live below the poverty line, which is defined in the report as being half of a countrys median household income. The OECD average is 12.6 per cent.

Of course, the findings wont come as a surprise to those trying to live on the Age Pension. The Australian Government contributes less to pensioner benefits, just 3.5 per cent of GDP, than any other OECD country, with the average spent in such countries 7.9 per cent.

The findings mirror those of the Global Age Watch Index 2015, which ranks 96 countries in total and found that 33 per cent of Australians over 60 were living in poverty.

The good news is though that Australia does do better than South Korea, with 50 per cent of pensioners there living below the poverty line.

.............................................................

For our part we are fortunate in that we both contributed to Super over our whole working lives, me from age 15 to 57. We were in full employment for the entire period (except for a period of 10 years where SWMBO took time out to raise our young family). We have never received any unemployment payments & always paid the full rate tax. Our 'defined benefit' super schemes paid out nicely & we took good Financial advice & our diversified, conservative approach along with a lifetime of careful spending & build up of assets as we approached retirement, has left us relatively well placed (so far) despite very heavy losses during the GFC. After 17 years of retirement, despite lots of expenditure on caravanning & many overseas trips we still have more assets now than when we retired. We live a good & happy life & still try to give back to the community as we can.

Australia used to be up with the top of the pack with respect to Social support, but we have long since lost the plot. Our society needs a good safety net without going to the excesses of countries like Greece. We aught to be compassionate & supportive to our own.

Mind you I am not complaining about how the system has treated us. I know of many people from similar backgrounds who now rely on the Pension, and others who live amongst the mega rich in Gold Coast gated communities & the like. Perhaps it's largely about the choices that you make and your good fortune along the way. The 'givers' seem to me to be amongst the latter & the 'Takers' the former.

Wombat 280 · Guru

A self funded retiree is just another form of gambler hoping to beat the odds . They will go to their grave with a million plus left to the kids while they lived a hand to mouth existence in their twilight years , bugger it get it and enjoy it while you can you only get on chance life isn't a rehearsal .

After many years ADF service I got out at the compulsory age 55 and had no option but to take my super as a fortnightly pension , WOW how happy I am, while others watch the stock market everyday and cry over the global down turns my pension is indexed twice a year while I'm on the road fishing and vanning living the good life . Never thought it would be this good when I was 18.

The ones who should be up in arms over their extremely poor super returns are those in union/ industry based funds, if all the supposedly lost and misappropriated monies had been paid in when due or ultimately recovered ( will never happen)and invested for the good of members then there would be no working poor in Australia and we certainly would owe our entire debt to China.

The Chinese defence budget including R&D is funded from interest received from it's overseas loans to places like OZ, USA and a heap of European countries. Stand By the debt collector is coming around soon.

brickies · Guru

Wombat would like to see some fact to back up your big statement .

Cupie · Guru

Wombat ..

I agree that those who chose to take a lifetime indexed pension rather than lump sum, where they had the option, do have an advantage with respect to assured income. Though not so much in relation to discretionary capital expenditure, like buying a new van & tug. For my super scheme the pension reduced to, I think, 5/8 for the spouse on death of the main recipient. Nothing goes to the final estate. My Mother was in that position & had to struggle after the early death of my Father.

I took the lump sum option (had to decide at least 10 years before I retired) & I certainly do not fit the description of a gambler looking to beat the odds. An educated, calculated long term investment strategy is quite different from 'gambling' on the stock market fluctuations.

The unfunded Govt. DB Super schemes forced the Govt. to set up the Future Fund & privatise Telstra allocating a massive volume of Telstra shares to establish a capital base for it. I believe that much of the retardation & fluctuation of Telstra share price is the result of the Future Fund trading those shares. The future Fund consistently outperforms all of the Super funds by a wide margin. From what I read it also indulges in some of those dodgy off shore Tax schemes.

From my memory of the published figures, I think that Industry Funds consistently perform at the upper end of Super Funds & have nothing to do with the alleged 'misappropriated' funds that you refer to.

By the way, I heard something on the radio today that those Defined Benefit Pensions were hit by the Govt.'s New Year Pension rules changes. Something about a greater % of the DB super pension being assessed under the income rules thereby reducing any Part Pension payable. As it doesn't effect me I did not investigate.

The Phantom · Guru

brickies wrote:
Who are the 2% on this post , It's great to see so many financial situations and we all can do what we want , Some still pay tax to help one that collect a pension we are very good sharers and god love you all .

I'm a 2%er. Dazren (3 dogs) told me that unequivocally.

Meanwhile I have a few bob stashed away, draw a part pension, have a few shares and don't give a Rat's A... about anyone else's problems. It is just not in my gene's to worry about someone else's issues.

The Phantom

Aus-Kiwi · Guru

Yep too late to worry about things once you retire or 55 and older..
One thing for sure sure. The saying speculate to accumulate when young sure helps when your older..
The thing is getting a good paid job with training etc in the first place and living a lifestyle you can afford..
I have just been on a Pacific Island cruise with friends.. They wont see what I'm about to say..
The couples 'least' amount of money, SPENT the most and whinged the whole time what they where spending !!
Not paying there rent the last two weeks.. I GUESS at 64+ they will never change there lifestyle..
Too broke to retire !! Rent is $550 per week..

Cupie · Guru

Aus-Kiwi wrote:
Yep too late to worry about things once you retire or 55 and older..
One thing for sure sure. The saying speculate to accumulate when young sure helps when your older..
The thing is getting a good paid job with training etc in the first place and living a lifestyle you can afford..
I have just been on a Pacific Island cruise with friends.. They wont see what I'm about to say..
The couples 'least' amount of money, SPENT the most and whinged the whole time what they where spending !!
Not paying there rent the last two weeks.. I GUESS at 64+ they will never change there lifestyle..
Too broke to retire !! Rent is $550 per week..

Spot on with your observations re accumulation phase jobs & affordable lifestyle.

Perhaps the hardest thing for some is being comfortable with moving from the accumulation phase & begin enjoying spending those assets, or at least getting the balance right.

I have some friends who just can't make this leap. At age 70+ one is still borrowing to invest in high rise units with long term return profiles, as well as self managing single block surburban housing plot divisions & building. Also is very active in share market speculation on an hourly basis. Another is of a similar age, establishing a newish business in importing bare boats for 'local' fit out & sale on the luxury boat market. Neither seems to ever take time out to holiday or travel. Both live rather frugally too but in very expensive homes/units. Are they & their families happy? Perhaps.

BTW SWMBO says that I am too tight & grumble at spending my hard earned $.

Thankfully that we are all different.

Cupie · Guru

Just to back up my comments in my previous post about transition from Accumulation to Enjoying ..

Stumbled across this today on the Business Spectator ...

Australians die richer than in retirement: study

STAFF REPORTER

New research from the CSIRO shows that a reluctance to spend savings accumulated in superannuation means many Australians are wealthier when they die than the day they retire, according to the Australian Financial Review.

Behavioural economist Andrew Reeson, who conducted the research, said that Australians primarily use the super system to build wealth, and even those with large super balances tended to adhere to the governments mandated minimum drawdown rates.

It does seem far from ideal that most people are choosing to self-insure for longevity risk, rather than investing in annuities, and that so much of the savings people have built up may end up being enjoyed by others, Mr Reeson told the AFR.He suggested an explanation for the high savings rate among many Australians could be driven by the psychological challenge of managing the switch from saving throughout ones working life to spending in retirement.

Government research suggests a significant proportion of pensioners increase or maintain the value of their assets in retirement, which poses a dilemma for policymakers, who would prefer super savings to be spent rather than saved and passed onto children.

Aus-Kiwi · Guru

Getting a tax concession through super is smart . The other tax payers hardly pay the extra ? The super money gets used somewhere . I took advantage of the tax on super and negative gearing . It's smart way of running your business even if you are on wages ., it's not like one is putting chit on another .. I have friends in there 70 with sfa money and rent ., when they finally stop working there lifestyle is going to change big time . Over $500 a week rent is way too much on pension !! Here in Sydney ., It gets me why some people spend there super to go on pension though ! I mean blowing $250k in 18 months !!

Knowledge speaks, but wisdom listens.

Australians die richer than in retirement: study