Changes to the pension coming soon

Cupie · Guru

RE: Changes to the pension coming soon

adreamer · Senior Member

Phil C wrote:
Gday again.

This is a great thread if we all keep politics out of it.

We are on the full pension and I get a full disability pension from Dept of Vets Affairs.

The unfortunate truth is that compulsory super came in around 1987 ( we used my meager DFRDB for a house deposit) and of course we didnt have enough ($120,000) when retirement came up. So we sold the lot and now live in a caravan. Im not sure if that makes me needy or a spender? I guess we tried to invest but were caught out with the expenses of bringing up 2 kids a home and car, not to say 2 cats and a dog, on crap wages.

Its only the later 3 years of our working lives that we had good paying jobs, health issues intervened and retirement was the only option 3 years short of 65. Im sorry if people think we are not pulling our weight, but we have struggled on crap wages for military personnel and technicians, but we made it and our kids were never hungry or cold. Im not sure I agree with some of the post put up here, but thats what makes the world go around, we cant all agree on the same things.

Im not sure which category we fit into, but most of our working life has been a struggle because of the trade I was in and ill health, nobody wants to employ a broken electrician who is a specialists on aircraft. In retrospect there are a number of life choices I would change if I had my time again.

I guess I can only say thank you to our system of pensions, without which we would be in a very bad situation. We now live rather comfortably in our caravan and go on trips only after a period of saving up.
Just as an aside, my Father in Law scrimped and scraped his whole working life, didnt get a car till my wife was 10, and a TV after we married, hardly ever went out and worked for a govt defense organisation with super contributions taken from his low wage. At the end he was almost self funded with a top up from the aged pension, he died 10 years after retirement, him and Mum went on a few trips and didnt live high on the hog. When they divided up the estate he had very little to call his own. I guess self funded is mostly for the more wealthy.

Cheers folks

-- Edited by Phil C on Tuesday 26th of July 2016 12:05:40 PM

-- Edited by Phil C on Tuesday 26th of July 2016 12:12:11 PM

BUT PHIL, you still have each other and you sound happy about that!!

sandgrooper1 · Senior Member

Another interesting topic.

Most of the replies are from those on the forum that are already retired and have set themselves up financially, to make retrospective changes to these people to me is abhorrent.

As full time wage slaves we are doing what we can to add to superannuation to try and become less dependent on Government help ie. the OAP.

However, with the changes being brought in re limiting super amounts/balances and contributions, it is now being made nigh on impossible for the average wage earner to be able to save enough to become self funded. Something like 1.2k million in super in the current climate of low interest rates is equivalent to the OAP payment.
The result is that once you have reached the 375k asset limit there is not a lot of incentive to save more because basically you become financially penalised, the reality being that getting to the point of being self funded is a pipe dream now.
The government wants us to work longer and keep saving but for what point? The difference in having 600k and 250k in superannuation is about 4k per year in income at the end of the day when arriving at OAP age. 50k vs 46k income per year approximately.

Now I work in an organisation whereby there are other workmates around my own age and when this topic comes up in conversation most just throw their hands in the air in despair due to the never ending changes to the rules.
Some say... stuff it I may as well spend on cars, holidays, meals out, really whatever expensive lifestyle choices they may chose because there is no incentive to save.

I like to argue the point ,but as one said to me the other day, frankly AL(me), I don't care where my money comes from , you can save as much as you like but my income will be similar to yours at the end of the day albeit from the OAP plus smaller super payments.
Basically he insinuated I was being the mug for trying to save as much as possible thereby forgoing some of life's luxuries in doing so. Until the rules change again I feel the vast majority will agree with him.

So now we are in a catch22 position.....the only answers being either buy a mcmansion to hide funds or consider retiring earlier and enjoy the fact we saved rather than spent up big. We probably can self fund from 60 onwards (my preservation age is 59)to arrive at the current OAP age requirement(67) with the maximum asset base allowed.

I feel for those who are going to be impacted with the proposed changes as they are already retired and really cannot change their finances, but, spare a thought for those following...it is not very clear which path to tread either.

All the above are just my interpretations on how things are and I welcome feedback that is polite.

Thanks AL.

Phil C · Guru

adreamer wrote:
Phil C wrote:
Gday again.

This is a great thread if we all keep politics out of it.

We are on the full pension and I get a full disability pension from Dept of Vets Affairs.

The unfortunate truth is that compulsory super came in around 1987 ( we used my meager DFRDB for a house deposit) and of course we didnt have enough ($120,000) when retirement came up. So we sold the lot and now live in a caravan. Im not sure if that makes me needy or a spender? I guess we tried to invest but were caught out with the expenses of bringing up 2 kids a home and car, not to say 2 cats and a dog, on crap wages.

Its only the later 3 years of our working lives that we had good paying jobs, health issues intervened and retirement was the only option 3 years short of 65. Im sorry if people think we are not pulling our weight, but we have struggled on crap wages for military personnel and technicians, but we made it and our kids were never hungry or cold. Im not sure I agree with some of the post put up here, but thats what makes the world go around, we cant all agree on the same things.

Im not sure which category we fit into, but most of our working life has been a struggle because of the trade I was in and ill health, nobody wants to employ a broken electrician who is a specialists on aircraft. In retrospect there are a number of life choices I would change if I had my time again.

I guess I can only say thank you to our system of pensions, without which we would be in a very bad situation. We now live rather comfortably in our caravan and go on trips only after a period of saving up.
Just as an aside, my Father in Law scrimped and scraped his whole working life, didnt get a car till my wife was 10, and a TV after we married, hardly ever went out and worked for a govt defense organisation with super contributions taken from his low wage. At the end he was almost self funded with a top up from the aged pension, he died 10 years after retirement, him and Mum went on a few trips and didnt live high on the hog. When they divided up the estate he had very little to call his own. I guess self funded is mostly for the more wealthy.

Cheers folks

-- Edited by Phil C on Tuesday 26th of July 2016 12:05:40 PM

-- Edited by Phil C on Tuesday 26th of July 2016 12:12:11 PM
BUT PHIL, you still have each other and you sound happy about that!!

adreamer, IMHO thats all that matters.. however we can still do the stuff we only dreamed about as younger people...

Cheers

brickies · Guru

Good points AL , It all depends how you want to invest while in the work force , We invested in our kids education first then put has much has we could in Super and we feel it was a good investment it didn't make very in money wise but our kids are very successful and the big tax they pay more than cover the pension and we are very happy and are enjoying life . please just be happy were you are in life if you are a grey nomad it to late to change much but your outlook on life .

macka17 · Guru

Hey.

Happy. Unhappy. Well off. Scratching.

WE ALL got one thing in common

We ALL still breathing.
Spare a thort for the ones you knew and aren't anymore.

We all on a bonus. financial or not.

Enjoy it.

One day not too soon in future, ay my time in life and older (75)
We'll be joining the other ones.
then it won't matter in the least will it.

SOmebody else can write on these posts
Chuckle.

My old man calked on a Sept at 75 yrs.30 odd yrs ago.

I way 75 in June.
every day from now on. I'M on a bonus.
Mum went to 98. Maybe I can borrow a couple off her line hey....

TheHeaths · Guru

Thank you Sir Rockylizard.

I shall return to my burrow and keep quiet again. It is always nice to learn something.

Cupie · Guru

rockylizard wrote:
TheHeaths wrote:
It is unfortunate that this type of discussion always sets member against member, but I guess that is the way it will always be.

SNIP~~~ point me to a reference, citing the original setting up of the aged pension, stating that the pension was for those less fortunate, ~~~SNIP.
Gday...
http://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/8e72c4526a94aaedca2569de00296978!OpenDocument
http://www.aihw.gov.au/WorkArea/DownloadAsset.aspx?id=6442475254
http://www.nma.gov.au/online_features/defining_moments/featured/age_and_invalid_pensions
that should keep you occupied for a while with a few reds
cheers - John

I finally got round to reading a bit of the stuff in rockylizards post.

There are some fantastic stats & data in the first one and very interesting discussion in others ..

Here's a selected extract that gives some indication of thinking of the day ... note the bit that I have highlighted.

Fantastic reading (even more interesting than Leon Uris' "Trinity" that I am currently re-reading)... Thanks Rocklizard.

Pensions at the state level

New South Wales introduced legislation in 1900. Every person in the community (unless aboriginal, alien or Asiatic) who was above the age of 60 years, who had resided in New South Wales for 15 years and whose income did not exceed £50 a year would be entitled to a pension of ten shillings a week when single.

Married couples received 15 shillings a week, which was more or less adequate. Similar legislation was enacted in Victoria (1900) and Queensland (1908).

New South Wales introduced an invalid pension scheme in 1908.

The federal government therefore had a rich legacy of experience to draw on in setting out a national scheme.

A royal commission concluded in 1906, which recommended a scheme largely based on the New South Wales legislation. It recommended that men over 65, and later, women over 60 be eligible. Their income had to be less than £52 a year and assets, such as a home, could be no more than £310 in value. Residence of at least 25 years was also a requirement.

The pensioner also had to be of good character, which generally remained undefined, although those who had deserted their spouse and children in the previous five years were not eligible.

macka17 · Guru

Those first coupla paragraphs say it all.
the disadvantaged so they won't drop into poverty.

It then goes on to homeowners etc.
But you can be sure they weren't thinking of 600k to 1 mill and more value homeowners
being incorporated into the system.

the system was devised for the "disadvantaged and poor"..

You got a 800k home. you ain't disadvantaged....in anybody's language.

I can always remember that long lanky piece of s--t Keating.
Boasting about using public doctors and hospital services.
and him second highest paid polly in land.

That was misuse, of the highest order.

Weedpharma · Veteran Member

Sandgrooper1, I have nowhere near $1.2m in super. What I have will run out as I will be running it down to live. Fortunately I have also gambled on some investments that will carry us over. Your $1.2m allows only for the interest to be same as pension. You do not need that amount if you also use the capital. And why should the taxpayers support passing this amount on to heirs?

We need to come up with a system that allows a "reasonable" amount of money to be put into super at a concessional rate but not so high as to be a tax minimisation scheme. A couple of million in super should be enough to allow a good income on retirement without it being simply a means of stashing huge sums away to minimise tax and pass wealth onto your heirs.

A couple of million is a lot to most of us but is not an especially high figure in today's dollars.

Weedpharma

sandgrooper1 · Senior Member

Weedpharmer,

I actually was not saying that we had $1.2m in super(I wish)...I was just making the point that you would need this amount invested via superannuation to earn the same return as the OAP at the moment bearing in mind the low interest rates and yes super including the capital should be drawn down as time goes by as retirement income.

I agree with your other point totally, basically that was exactly what I was having hissy fit about re how plans by the powers that be want to limit contributions to a level whereby it will be impossible to get to a self funded retirement. They bang on about how much the OAP is costing tax payers/budget bottom line.... then on the other hand want to stop people from having enough by limiting contributing to super.....certainly there should be a upper ceiling amount allowed, indexed to allow for inflation,CPI etc...
To me you should be able contribute as much as you can to get there at any time of your life. People should be encouraged to contribute to superannuation.

The task seems pretty simple to me....I am sure greater minds than mine are at work here.

I foresee most retirees in the future will be lumped into one group with the lucky few, including politicians, having enough outside of superannuation to retire independently of the OAP system. Unfortunately I am thinking this will not be us ....lotto is looking good as the only avenue out. One powerball.....

Cheers AL

brickies · Guru

But after all this how many know what the changes on The 1 -01- 2017 are , I think OP was just letting people on the forum there are changes happening , Some how the post got lost about the haves and the have nots .

sandgrooper1 · Senior Member

My apologies to the OP for going off track somewhat.....just got a bit excited I guess.

I wasn't really interested in the have and have not situation.

Now.... pass me another beer ....thanks...