How to retire early... or simply survive

[PZ99]

Oh, sorry. The NBN is off budget because it's a "financial asset investment".

The funds come from investment - super funds have diversified interests in the NBN for a small return. They buy govt bonds and that money goes to NBNCo.

Which means the intention is to either pay for itself or sell it off. The same thing happens with nation building projects like roads etc. We have around $80b in an off budget fund as a "headline deficit". Most of it from the Abbott/Turnbull govts I might add

It's not part of our federal budget quagmire - so technically it's not paid for by taxpayers.

As for stop handing our welfare to people who wont work for it, I agree completely - save for the people who really need it.

 

[tech/a]

Learnt something

Thanks.

So in a worst case scenario and there is a global meltdown of Western Commerce
the Billions invested would not be returned to the Funds and Super would be for ever lost.
OR
It doesn't make a profit or becomes obsolete --- which is most likely making it unsaleable and worthless.
How are the Billions paid back into Super?

 

[tech/a]

See above again.PZ99

 

[PZ99]

The billions (it's not that much) that's invested is earning a return based on the bond rate.

They will get their money back - I'm paying $60 a month for my NBN. Some of that goes to the investors. When a sizable population are connected (compulsorily unless they go wireless or offline) the return is greater. They could sell it for a song in ten years and still get the money back and more simply from inflation. They could have sold it now had it not been for the fact that the rollout was sabotaged by short term hysteria about costs. The flustercluck of fibre and cable for a few dollars today is a fair way to devalue it tomorrow and thereafter.

That's what happened with Telstra. Sold off and started a future fund that now has $150 billion in it.

 

[sptrawler]

Oohh look... a contrary view.

A self funded retiree earning $1900 a week can't spare $72 a week to sponsor Australia's future?

Tax free super is a structural deficit burdened on future generations bequeathed by the Howard govt in a burning desire to stay in office for just one more term.

Spare me the entitlement eulogy, fabians

I will be interested to hear your comments, when you reach the position, by then the goal posts will be well and truly moved.
This is only the first step, in what I feel, will end up a completely different scenario for future retirees.
But hey, if everyone is like you, we can look forward to a glowing benevolent future.
Where your savings in retirement are distributed, for the greater good, as they have been your whole working life.

 

[sptrawler]

Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?

A free income for doing nothing is not what built Australia.

Why should a couple who have saved nothing, their whole working life, get $35,000 free + free medical + cheap rates + all the other perks that come with a pension card?

How many people are getting $100k, think about it, if you have $800k invested you lose the last $1 of pension and perks.
So if that person is earning 5% on that $800k, they are getting $40k a year.

It's o.k for the smug to sit back and quote the 2% of people who are getting $100k, what about quoting the 40%, who are getting $40k and being screwed over for saving all their working life?

 

[PZ99]

I will be interested to hear your comments, when you reach the position, by then the goal posts will be well and truly moved.
This is only the first step, in what I feel, will end up a completely different scenario for future retirees.
But hey, if everyone is like you, we can look forward to a glowing benevolent future.
Where your savings in retirement are distributed, for the greater good, as they have been your whole working life.

I will reach that position at the end of next year and from that point, I will be a self funded retiree. They can move the goalposts anywhere they like. But they can't stop me from earning money and paying the same tax that everyone else does.

The worst thing the Govt can do is bring back something like workchoices where workers ultimately earn just enough for dog food and dunny paper and then retire at 70 with nothing other than a hefty medical bill and a maxed out credit card.

 

[sptrawler]

If you've built up a business to the point of enjoying a comfortable retirement then that's great. It's something for others to inspire to. But it's not a ticket for a free ride on the back of taxpayers in a country running up debt and deficits and mortgaging our future.

But blowing all your money, on piss, gambling and holidays your whole working life, does entitle you to a comfortable retirement on the public purse?

 

[sptrawler]

I will reach that position at the end of next year and from that point, I will be a self funded retiree. They can move the goalposts anywhere they like. But they can't stop me from earning money and paying the same tax that everyone else does.

The worst thing the Govt can do is bring back something like workchoices where workers ultimately earn just enough for dog food and dunny paper and then retire at 70 with nothing other than a hefty medical bill and a maxed out credit card.

Well, firstly congratulations, I hope it all goes well for you.
You will need to have a considerable amount, to remain as upbeat as you appear, and if you have that well done.

By the way, it was Labor who increased the retirement age, and no doubt it will be them who move it up again.

 

[SirRumpole]

But blowing all your money, on piss, gambling and holidays your whole working life, does entitle you to a comfortable retirement on the public purse?

That's a pretty pathetic comment. Before Keating bought in super the pension was the only way of funding retirement. Not everyone has the cash to spend on shares or negative gear other people's houses. Paying off the mortgage took a lot of those "savings".

 

[PZ99]

Why should a couple who have saved nothing, their whole working life, get $35,000 free + free medical + cheap rates + all the other perks that come with a pension card?

Because the cost of living in this country has blown out to a level where anything less than the above is considered a less than decent quality of life.

But, if you go through some of my previous posts... I'm not advocating a free ride either.

How many people are getting $100k, think about it, if you have $800k invested you lose the last $1 of pension and perks.
So if that person is earning 5% on that $800k, they are getting $40k a year.

Fine with me. But if people are earning 5% and $100k a year they must have a 2 million dollar investment. Why can't someone with 2 million dollars pay just $4000 a year?

It's o.k for the smug to sit back and quote the 2% of people who are getting $100k, what about quoting the 40%, who are getting $40k and being screwed over for saving all their working life?

There's nothing smug about it. If anything the majority of the smugness is coming from people with incomes way over what you are quoting and paying little or no tax in the process.

 

[PZ99]

But blowing all your money, on piss, gambling and holidays your whole working life, does entitle you to a comfortable retirement on the public purse?

Of course not. Who is advocating this? And how prevalent is it?

Well, firstly congratulations, I hope it all goes well for you.
You will need to have a considerable amount, to remain as upbeat as you appear, and if you have that well done.

By the way, it was Labor who increased the retirement age, and no doubt it will be them who move it up again.

Cheers

Yes, it was Labor who increased the retirement age, to 67.

But it's the Libs who want to increase it to 70 which is another three years of hard slog.

That is still their policy and thanks to Bill Shorten and the ALP for blocking it in the senate.

 

[Value Collector]

Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?

A free income for doing nothing is not what built Australia.

If thats the deal that the government made with the guy to convince him to build up his super over the years, then they should honour it.

It is pretty crap if the government gives you an incentive to get you to fund your own retirement, then 30years later when its time to start collecting the benefits after doing what the government wanted for 30 years they change the rules.

It's like playing UNO with my 7 years old nieces, since when did you get to put down after you picked up, just because I ended up with 2 draw fours and a wild card suddenly the rules are changing.

if you want to change the rules, change them when a new game starts, not half way through my game.

 

[sptrawler]

Of course not. Who is advocating this? And how prevalent is it?

It is easy enough to find out how many are on pensions, I'm only talking from personal experience and my knowledge of my workmates, their spending habits and the situation most find themselves in today.[/QUOTE]

Yes, it was Labor who increased the retirement age, to 67.

But it's the Libs who want to increase it to 70 which is another three years of hard slog.

That is still their policy and thanks to Bill Shorten and the ALP for blocking it in the senate.

Let's see if they block it when they are in office.

 

[PZ99]

It is easy enough to find out how many are on pensions, I'm only talking from personal experience and my knowledge of my workmates, their spending habits and the situation most find themselves in today.



Let's see if they block it when they are in office.

They are funded through the unions so the chances of it happening are zero.

If they attempt to do it they will commit political suicide and for the sake of populism you can bet the Libs will block it citing some irrelevant scenario like crappy climate change

Labors' policies are out there and clearly defined... tax on high income super, check neg gearing, abolish franking credit refunds, restore penalty rates. If these things are bad, vote Liberal.

A lot of my workmates are in a dire position. They're paying $400 a week in rent and they're over 50 and will no doubt go on the age pension if their body doesn't break first. We do a lot of heavy lifting in my job and I have the scars to prove it

But I saved my dough and it will serve me until I'm on the other side of the grass. Which is why I really don't worry too much about what other people are earning or spending and I don't quite get why so many people get fascinated by it to be honest.

 

[sptrawler]

That's a pretty pathetic comment. Before Keating bought in super the pension was the only way of funding retirement. Not everyone has the cash to spend on shares or negative gear other people's houses. Paying off the mortgage took a lot of those "savings".

I'm not talking about those who had meagre incomes, or disabilities.
I'm talking tradies on the same money as me, who saved nothing had a great life and now find themselves in there 60's with diddly squat.
I don't mind paying my fair share, but I certainly wouldn't have gone so long and so hard, to get where I am, if I had known the goal posts were going to get moved like is being suggested.
My intention was to be fully self funded, my whole life, well that is out the window now, I'll spend and enjoy not be frugal as I have been all my life.
Maybe that fits in better with Labor ideology, where everyone goes to the lowest common denominator, except the politicians themselves. lol

 

[sptrawler]

But I saved my dough and it will serve me until I'm on the other side of the grass. Which is why I really don't worry too much about what other people are earning or spending and I don't quite get why so many people get fascinated by it to be honest.

You sound very much like myself, i certainly hope your savings see you through, with the suggested changes Labor are talking about mine won't. lol
With inflation, erosion of capital will be accelerated.
I know people will suggest the pension will kick in, but my call is the next move will be that you have to spend your capital before qualifying for a pension, as it is with the dole.

 

[SirRumpole]

It is pretty crap if the government gives you an incentive to get you to fund your own retirement, then 30years later when its time to start collecting the benefits after doing what the government wanted for 30 years they change the rules.

Super is now compulsory, so there is no tax incentive.

Howard made super tax free to maintain the support of the upper incomes and give himself a nice fat retirement package into the bargain.

 

[sptrawler]

Fine with me. But if people are earning 5% and $100k a year they must have a 2 million dollar investment. Why can't someone with 2 million dollars pay just $4000 a year?

If you look back to the my posts, when Labor suggested the taxing of super incomes above $100k, I fully supported it and still do.

What I dissagree with is, the removal of the franking credit, takes 30% of much lower incomes.
Therefore those, as I who are trying to achieve an income above inflation, are going to be screwed.
Shares are paying about 5% give or take, with the franking credit that goes to about 7%, without the franking credit and with the ever increasing minimum drawdown, shares will have to be sold to fund it.
That is o.k, while inflation is low, but becomes a real issue as inflation increases.
Rates in our location have gone from $1,400 to $2,000 in the last 2 years. Electricity has gone from 12c/unit to 25c/unit in the past 8years, the supply charge doubled last year.
It is only the fact that there is a supermarket war on, that the cost of food has had a lid on it, for the last few years.
Like I said, there will be a huge problem, when inflation in the Western World kicks off, and all Governments are pushing for it to kick off.
Also the ATO has introduced a reporting requirement, that any large sums removed from super, have to be immediately reported. Make of that, what you will.

 

[Value Collector]

Super is now compulsory, so there is no tax incentive.

Howard made super tax free to maintain the support of the upper incomes and give himself a nice fat retirement package into the bargain.

The minimum contribution is compulsory, the government is still actively providing incentives to get people to invest more over and above the minimum.

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Also, just because someone is withdrawing $100K per year from their super doesn't mean the super is earning $100K per year, Some of that is capital that is already been taxed when it was originally earned.

If I earn $100, pay $15 in super contribution tax so my super account is raised by $85 when it comes time to withdraw it I shouldn't have to pay tax on it, its my money after tax, you don't pay tax when you withdraw your after tax wages form you account