How much capital do I need to retire comfortably on ?

[Beagle]

Very nicely illustrated Roger: my compliments.

I have spent years pondering the Great Wall of retirement and attended seminars, read books, and saved what I could.

I have also advised families and dealt with the parents estates when they have died.

My conclusion is that saving "enough" to provide a truly independent income is impossible for most people. Including myself. In fact I now regret not taking family holidays to Australia, Europe etc as my friends did.

We can't live life in the future: life is now. As in all things, moderation is the key. Save for retirement but don't let it worry you. Rich relationships with family and friends are the investment which brings rewards over your whole lifetime.

Allow me to return the compliment, I really like the bit highlighted.
Some good posts here. Thanks for so many good contributions and its turned into quite an interesting thread.

I think we can all agree its a very good idea as an absolute minimum to have a debt free home by the time you retire. I also think its a good idea to have at the minimum some other asset that pays a regular income whether that's an investment portfolio, rental property, part of your existing home converted to a flat or some other reliable form of income as its a fairly modest lifestyle just existing on the national Superannuation alone even with a debt free home.

I'd like to take up the debate about Trusts.

Trust law is long established and I would perhaps somewhat boldly suggest most of our politicians have their family home in a family trust.
At present my understanding with rest home and in home care costs is they're looking back 10 years for gifting, used to be 5 AND they look through family trust structures in regard to regular income payments from same, I don't think they did this several years ago.

Now for some pure speculation.

Will that look back period increase or will they look through the family trust structure completely ?

I doubt there's the political will for the latter option but I could well be wrong but there's the distinct possibility that they'll look back further in an effort to stem the rising health care costs in this area.
In my view this underscores the importance of establishing your family trust early and getting the gifting done and dusted, (this process is helped by the recent abolition of gift duty so you can now gift it all in one step provided you're solvent and the Trust is too).

Will we see the re-introduction of some form of national superannuation surtax ?

In Australia I believe if an individual earns more than $72,000 they're ineligible for Super.
I suspect with the baby boomer population tsunami we'll see some sort of similar system here eventually and / or possibly an increase in the eligibility age from 65 ?
Whether this is in tandem with new look through trust provisions who could possibly know ? but I think it doesn't do your lifestyle any harm by having your assets in a family trust.

I'd rather not get into a social debate about whether its morally right that some sectors of the population gain an advantage through trusts, (real can of worms that one). I'd prefer to examine how the law works today and suggest some possible extrapolations based on logic and trends.

[Bjauck]

...
Trust law is long established and I would perhaps somewhat boldly suggest most of our politicians have their family home in a family trust.
At present my understanding with rest home and in home care costs is they're looking back 10 years for gifting, used to be 5 AND they look through family trust structures in regard to regular income payments from same, I don't think they did this several years ago....

Many trusts are set up when people are in their middle-age. When they reach the age when they are likely (on average) to need nursing or rest home care they will be 75 plus. It could easily be some 25 years after they may have put their assets into a trust. For all intents and purposes they have been the de facto owners of the assets in the intervening period, but de jure not the legal owners. IMO If the settlor is applying for a government benefit and has settled assets at any time on a trust in which he/she is a beneficiary and/or a trustee, the look back should have no limit.

The widespread use of trusts as shelters for assets has tied the government's hands as far as reintroducing death duties or inheritance tax, as so many of those people who would otherwise have large estates, have put their assets in trusts. The only option may be to introduce an effective superannuation means test/surcharge. As long as it also takes into account any benefit derived from trust assets and/or income.

[skid]

Allow me to return the compliment, I really like the bit highlighted.
Some good posts here. Thanks for so many good contributions and its turned into quite an interesting thread.

I think we can all agree its a very good idea as an absolute minimum to have a debt free home by the time you retire. I also think its a good idea to have at the minimum some other asset that pays a regular income whether that's an investment portfolio, rental property, part of your existing home converted to a flat or some other reliable form of income as its a fairly modest lifestyle just existing on the national Superannuation alone even with a debt free home.

I'd like to take up the debate about Trusts.

Trust law is long established and I would perhaps somewhat boldly suggest most of our politicians have their family home in a family trust.
At present my understanding with rest home and in home care costs is they're looking back 10 years for gifting, used to be 5 AND they look through family trust structures in regard to regular income payments from same, I don't think they did this several years ago.

Now for some pure speculation.

Will that look back period increase or will they look through the family trust structure completely ?

I doubt there's the political will for the latter option but I could well be wrong but there's the distinct possibility that they'll look back further in an effort to stem the rising health care costs in this area.
In my view this underscores the importance of establishing your family trust early and getting the gifting done and dusted, (this process is helped by the recent abolition of gift duty so you can now gift it all in one step provided you're solvent and the Trust is too).

Will we see the re-introduction of some form of national superannuation surtax ?

In Australia I believe if an individual earns more than $72,000 they're ineligible for Super.
I suspect with the baby boomer population tsunami we'll see some sort of similar system here eventually and / or possibly an increase in the eligibility age from 65 ?
Whether this is in tandem with new look through trust provisions who could possibly know ? but I think it doesn't do your lifestyle any harm by having your assets in a family trust.

I'd rather not get into a social debate about whether its morally right that some sectors of the population gain an advantage through trusts, (real can of worms that one). I'd prefer to examine how the law works today and suggest some possible extrapolations based on logic and trends.

From what I have heard the gifting has to continue as before in order to be eligible for old folks home care--i believe that the gov. will look at the ''gifting all in one step'' as one payment ,meaning all the rest is considered ungifted. Its a bit of a double standard in terms of who is interpreting and for what.--(correct me if Im wrong)

[Aaron]

I'd rather not get into a social debate about whether its morally right that some sectors of the population gain an advantage through trusts, (real can of worms that one). I'd prefer to examine how the law works today and suggest some possible extrapolations based on logic and trends.

Sorry for going off thread. I agree though no point debating what is morally or intellectually right.
Trusts are bulls**t but you might as well use them if they are an option that will help benefit you. I think it is up to the leaders of the country to change this and I don't think there is any political will to do so.

[macduffy]

Right on all counts, Aaron!