How much capital do I need to retire comfortably on ?

[BIRMANBOY]

Yes you are absolutely correct Aaron....The Cambridge Dictionary says about "rant" to speak or shout in a loud, uncontrolled, or angry way, often saying confused or silly things:

3Sorry what was this thread about again I keep losing track with my rantings.

[Beagle]

Yes you are absolutely correct Aaron....The Cambridge Dictionary says about "rant" to speak or shout in a loud, uncontrolled, or angry way, often saying confused or silly things:

Hits the nail directly on the head and sums the situation up perfectly.

http://www.nzherald.co.nz/nz/news/ar...ectid=11453358

"It is important to understand that national superannuation was not a benefit, but an entitlement which most recipients have paid into for 50 years of their working lives. It was theirs by right, not by privilege or charity."Mr Peters said those who wanted to cut super should target the 70,000 migrants who qualified for it after 10 years of living in New Zealand, irrespective of whether they ever paid tax.
Prime Minister John Key said it would be "grossly unfair" to withhold the pension from those who were still working.
"A lot of them, the lowest income New Zealanders with the lowest amount of savings, the combination of work and their pension gives them a much nicer lifestyle in retirement."

I would have thought this is a pretty simple principle to understand...

[Aaron]

The entitlement mentality of some people in NZ is disappointing.
Sorry if I don't agree with politicians on this issue, they have their own scheme which is probably gold plated and did they say that the current system was affordable??
Hey at least we all got our $1,000 Kiwisaver handout shame about future generations.

Good one Birmanboy play the man not the ball. Did you learn that from Muldoon when you voted him in as he spent your savings for national super on think big. Don't worry though I am sure the current government will be happy to keep borrowing though to buy your vote. All the better that future generations can pay it back for you along with their student loans, and large mortgage.

[BIRMANBOY]

Ok here is my last word on this particular subject ....its all about attitude Aaron...not aptitude...attitude. Think about that ..life, success, happiness, security and all those things people strive for are not going to be aided by believing that life is just one giant conspiracy and everyone and everything is taking advantage of you. You (we) have a choice, you can choose to forge ahead with a clear, proactive vision of what you want to achieve in life and how you are going to do it or you can choose to spend time dwelling on all of life's perceived unfairness. Are you a victim or are you an achiever. You alone determine that outcome. Faffing on about these issues on a forum is just so useless...all you are accomplishing is contributing to your own frustration. However all up to you in the end.

The entitlement mentality of some people in NZ is disappointing.
Sorry if I don't agree with politicians on this issue, they have their own scheme which is probably gold plated and did they say that the current system was affordable??
Hey at least we all got our $1,000 Kiwisaver handout shame about future generations.

Good one Birmanboy play the man not the ball. Did you learn that from Muldoon when you voted him in as he spent your savings for national super on think big. Don't worry though I am sure the current government will be happy to keep borrowing though to buy your vote. All the better that future generations can pay it back for you along with their student loans, and large mortgage.

[Aaron]

Sorry couldn't let it go. Just that I am drawn to opinions that agree with my own.

http://www.stuff.co.nz/business/mone...nd-the-fiction

Keeping in mind the thread is about capital requirements in retirement. Just that national super will be an important component for a majority of NZers retirement planning.

[Beagle]

Its certainly been an extremely interesting thread, far more controversial than I anticipated when I started it.

Looking at the comments section after that article its clear there appears to be an inter generational dichotomy of views.

As a society I think its important we do try and raise some of these issues which is partly what motivated me to start this thread.

If you have a look back at the history of n.Z. superannuation for which I posted a link earlier you can see it indeed has been tinkered with quite materially since it's inception.
IIRC originally the scheme's pay-outs were based on over 80% of the average wage and entitlement was from the age of 60.

Now were down to 66% of the average wage and the age of eligibility is 65.

I suspect there is further tinkering that's required to the system as the baby boomer tsunami approaches. As I've suggested before I suspect the age of eligibility will inevitably have to increase as the undeniable fact is that with advances in medicines and technology we're living longer.

Whether we see the level of pay-out reduced further perhaps to circa 60% of the average wage or potentially lower and or some sort of compulsory Kiwi saver scheme introduced remains to be seen.

I think young people need to relax a little and realise that people approaching retirement have been paying taxes all their lives, e.g. who do people in their twenties think has paid for all their education since they were in nappies ?

I remain of the view that super is an entitlement not a benefit per se.

[Cool Bear]

To Aaron, Bb and Roger,

The following paper by Prof Ross Guest is an interesting comparison of the NZ Super vs the OZ age pension. NOTE the terms used are a bit confusing at first. OZ Super is equivalent to our NZ Kiwisaver whereas OZ Age Pension is equivalent to our NZ Super.

Major difference is that OZ Age Pension (equivalent to NZ Super) is means tested which is what Aaron would like to see for our NZ Super

In OZ, they can withdraw their Super (read Kiwisaver) at 60. One unfortunate consequence of means testing is that many will try to spend most of it by 65 so that they are eligible for the full Age Pension! The other interesting fact is that their poverty rate for over 64 is much higher than ours 34.9 per cent compared to our 7%.

http://www.cffc.org.nz/assets/Docume...me-Systems.pdf

My stand is that our Super should never be means tested - most of us kiwis are far from being fiscally responsible individuals at the moment. Means testing will encourage more to just live for today and spend spend spend and not to worry about tomorrow as we will then get the full super! It will penalise most of us here in ST who are trying to build up a nest egg.

[Aaron]

My stand is that our Super should never be means tested - most of us kiwis are far from being fiscally responsible individuals at the moment. Means testing will encourage more to just live for today and spend spend spend and not to worry about tomorrow as we will then get the full super! It will penalise most of us here in ST who are trying to build up a nest egg.

I agree that most of us kiwis are far from being fiscally responsible individuals.

I don't agree that national super should not be means tested and to get around some issues, I would suggest that after Kiwisaver becomes compulsory you also restrict withdrawals on retirement to an annuity. I don't like managed funds or annuities( I am in kiwisaver for the govt handouts(shame on me but thank you nz)) but if you had means and/or asset testing for National Super an around the world trip, new car and renovated house would see most kiwisaver savings gone in a couple of years after retirement. It would never work unless you force people to take an annuity. Making Kiwisaver compulsory is another way of making life harder for future generations (but possibly a politically acceptable one) while maintaining the current generous system.

I would note the disparity in benefit between old and young in the article I attached above.
A single person seeking work aged over 25 years of age will receive Jobseeker Support of $210.13 after tax.In 2015, a single person aged over 65 and living alone will receive $374.53 per week ($19,475.56 per annum). A difference of $164.40 per week. A jobseeker aged 20-24 years will receive $175.10 after tax - less than half of their retired counterparts. It is unclear why a single retired person needs $165 per week more than a single younger person seeking work.
I am not against old people or the need to look after them in retirement but they older generation were paid to go to University if they were able or wanted to go, something they haven't offered the young people of today. We should be investing in our young people as they are the future of NZ.

[Bjauck]

I think that a one-size-fits-all super payment may have been more appropriate in a more egalitarian NZ. However the poorer retired folk will increasingly need more government assistance. For example in Auckland, fewer people are able to afford the deposits to buy ever more expensive housing. Ownership of residential housing is increasingly becoming less widespread. Those who do not own their own homes when they retire will need help to avoid poverty when they rely on government super.

Many of those who are able to build up a sizeable nest egg of a portfolio of shares (or more likely in NZ, a portfolio of rental property), may have been able to do so as a result of liberal family trust rules and tax reforms from the 1980's onwards - a shift to GST from income tax and as a result of greater inherited wealth as a result of the abolition of death duties. They may have the luxury to now consider government superannuation as pocket money in their retirement.

[Beagle]

I agree that most of us kiwis are far from being fiscally responsible individuals.

I don't agree that national super should not be means tested and to get around some issues, I would suggest that after Kiwisaver becomes compulsory you also restrict withdrawals on retirement to an annuity. I don't like managed funds or annuities( I am in kiwisaver for the govt handouts(shame on me but thank you nz)) but if you had means and/or asset testing for National Super an around the world trip, new car and renovated house would see most kiwisaver savings gone in a couple of years after retirement. It would never work unless you force people to take an annuity. Making Kiwisaver compulsory is another way of making life harder for future generations (but possibly a politically acceptable one) while maintaining the current generous system.

I would note the disparity in benefit between old and young in the article I attached above.
A single person seeking work aged over 25 years of age will receive Jobseeker Support of $210.13 after tax.In 2015, a single person aged over 65 and living alone will receive $374.53 per week ($19,475.56 per annum). A difference of $164.40 per week. A jobseeker aged 20-24 years will receive $175.10 after tax - less than half of their retired counterparts. It is unclear why a single retired person needs $165 per week more than a single younger person seeking work.
I am not against old people or the need to look after them in retirement but they older generation were paid to go to University if they were able or wanted to go, something they haven't offered the young people of today. We should be investing in our young people as they are the future of NZ.

The difference between a benefit for a young person in their early twenties and the superannuation of that of a retired person in their late sixties is that one is a temporary welfare benefit paid to encourage people who into full time work, many of whom have been doing nothing but suck off the taxpayers teat since they were in nappies through the education and family support welfare system and have never contributed a cent to society whereas the latter is an entitlement often earned through contributions to the taxation system for circa 50 years...pretty simple difference really, surely anyone can understand this fundmental difference for goodness sake.

As for being paid to go to University if you wanted to go, what a bloody JOKE...you couldn't be more wrong. If you were smart enough to earn the right to get there and that was a big IF, (B bursary standard 7th form absolute minimum) you were paid a tiny allowance that didn't even cover the cost of textbooks. There was no ability to take tens / a hundred thousand of dollars of interest free student loans with repayment terms spread infinitum often for twenty years or more. Many people worked part time or did 60 hour weeks all holidays like I did on my Uncle's farm for $1 hour to get by and scrape through a bare bones existence. Even then I could only attend Uni with the support of my parents free rent and food support. I vividly remember breaking down and crying when the brake pads on my 100 cc motorbike gave their last breath of life...I had no way in the world to afford the $8 replacement pads.
No generous student allowance of $150 per week, albeit repayable on the never never payment terms or $150 weekly accommodation payment. (I wish there was as I would have gone on and done a masters degree). Uni is far more available and affordable for all these days with or without parental support.

Oh and before you bleat like a lamb lost from its mother and say you have to pay back the student loan consider this, when I was a young fella the top personal tax rate was 66%...you think professionals didn't have to pay back their education costs in another manner doh !!

Every new generation thinks they're hard done by...I'm over it mate and suggest you do the same.