How much capital do I need to retire comfortably on ?

[777]

As you say, just pointing out the obvious. It's also obvious that income tax isn't the only source of funding for NZ Super - many taxpayers contribute more through GST than income tax. Also obvious that the the bulk of income tax has always been paid by a minority of taxpayers - hence that "average Kiwi" is a mythical creature, taxwise. Obvious too, that NZ Super wasn't designed as a welfare benefit but as a universal payment. Needless to add, I didn't find that article very enlightening.

My thoughts as well.

[fungus pudding]

My thoughts as well.

And mine.
.

[kiora]

No mention of returns from kiwisaver risk category though.Does have some affect.
Looks like a surprising small amount
http://www.nzherald.co.nz/personal-f...ectid=11886119

http://www.nzherald.co.nz/personal-f...ectid=11885124

[Aaron]

As you say, just pointing out the obvious. It's also obvious that income tax isn't the only source of funding for NZ Super - many taxpayers contribute more through GST than income tax. Also obvious that the the bulk of income tax has always been paid by a minority of taxpayers - hence that "average Kiwi" is a mythical creature, taxwise. Obvious too, that NZ Super wasn't designed as a welfare benefit but as a universal payment. Needless to add, I didn't find that article very enlightening.

To contribute more through GST they would have to spend more than they earn (not including rent and financial services in the spend as they are exempt from GST) so I imagine that wouldn't be many people. GST only makes up roughly 26% of govt revenue. The bulk is source deductions such as income tax, rwt etc. No one is arguing that NZ Super wasn't designed as a universal payment the issue is that it may be unaffordable in the future and if that issue is addressed now changes may not need to be so drastic in the future. I think people would rather stick their head in the sand and you are probably right I shouldn't worry about this until it is actually a problem. Like I have said in the past it will probably become a problem a couple of years after the last baby boomer attached to the taxpayer nz super tit much like the cost of tertiary education.

Also we are ignoring that govt also provides healthcare, education, roading etc etc which has to be funded as well.

[Aaron]

Touching on why the thread was originally started this article is heartening as the savings targets seem doable although I would be interested to see what assumptions they made regarding investment returns.

http://www.nzherald.co.nz/personal-f...ectid=11886119

The long awaited crash of world financial markets could muck up a few retirement plans. Although half price equities would be better than worthless cash.

[fungus pudding]

Touching on why the thread was originally started this article is heartening as the savings targets seem doable although I would be interested to see what assumptions they made regarding investment returns.

http://www.nzherald.co.nz/personal-f...ectid=11886119

The long awaited crash of world financial markets could muck up a few retirement plans. Although half price equities would be better than worthless cash.

Worthless? What will we use to buy these half price equities then?

[Aaron]

Worthless? What will we use to buy these half price equities then?

Bitcoin, gold, beads, shells???

I might have been a bit extreme. Just get sick of hearing about inflation targets while interest rates stay low. Have a look at the reserve bank inflation calculator see if a dollar in the 70s would be considered almost worthless today. can't buy much with a dollar.
Also money is just a concept some numbers on a computer if people lose faith in that concept it could quickly become worthless whereas companies will keep generating profits even if the means of exchange changes.

[RGR367]

Here's a link to the latest research;

http://www.massey.ac.nz/massey/learn...entre/research

For those of us who have been investing and/or trading for a while would find that "needed amount" by age 65 is so small indeed or as you say very doable even at a mature age of 40.
Well done folks!!!

[Aaron]

Here's a link to the latest research;

http://www.massey.ac.nz/massey/learn...entre/research

Thanks for that. It is more a report on expenditure and thankfully only 10 pages but skim reading I don't see any assumptions regarding investment returns. So assuming my shortfall each week will be $503.26 (yes I would like to have the choices option) times by 52 weeks a year equals $26,169.52 shortfall per year. I would need a 5.4% return on my $486,023 plus inflation say 7.5% return if I grow my investment to keep up with inflation. I haven't annualized some of the choices budget expenses but it looks pretty no frills to me. I should read the no frills figures to encourage my savings habit.
I would note also they haven't made any assumptions about the affordability of nz superannuation long term.

[Aaron]

As you say, just pointing out the obvious. It's also obvious that income tax isn't the only source of funding for NZ Super - many taxpayers contribute more through GST than income tax. Also obvious that the the bulk of income tax has always been paid by a minority of taxpayers - hence that "average Kiwi" is a mythical creature, taxwise. Obvious too, that NZ Super wasn't designed as a welfare benefit but as a universal payment. Needless to add, I didn't find that article very enlightening.

Wait I have just worked out who you are referring to when you mention taxpayers who contribute more through GST. There would be a group of NZers who might be contributing more through GST than income tax. Heavily leveraged property investors they could be cashing in or drawing down on their tax free capital gains not contributing a cent in income tax. What I envy most about this group is that they are the ones central banks are protecting with easy money and low interest rates while they screw over savers and people on fixed incomes or wage earners whose pay rises don't match the inflation rate (think property price inflation not the CPI bulls***t). Its a crazy financial system we have.