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  1. #611
    Ignorant. Just ignorant.
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    Quote Originally Posted by fungus pudding View Post
    The question should be 'how much income do I need to retire on'? Invest for income, otherwise buy a kid's money box and throw your money in it.
    Capital drawdown is a pretty tax-efficient form of income.

  2. #612
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    Quote Originally Posted by GTM 3442 View Post
    Capital drawdown is a pretty tax-efficient form of income.
    Agreed - but not with housing which is the favourite.
    Shares are great and fund my lifestyle.

  3. #613
    percy
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  4. #614
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    Quote Originally Posted by percy View Post
    Depends on why they are in debt I suppose. In a world where cash is being trashed by reckless central banks why would you have savings instead of manageable debt on income producing assets.

    You have a few properties Percy, are you telling me a big chunk of your wealth creation was not due to leverage.

    If the debt is on credit cards for consumer spending or a mortgage for a bigger house then that would be worrying. Let them reap what they sow.

    Interesting that Aussie super is means tested, if you don't need it you don't get it. They put 11% aside for retirement in NZ it is 3%.

    I wonder if our potholes will get bigger while our social welfare and health bills get much larger as boomers retire or is nz national superannuation in its current form affordable as John Key and Jacinda Ardern assured us. I was going to compare NZ and Aussie spending on super as a percentage of the tax take to see who has the better policy.

    One thing I can tell you Percy if things don't change re house prices then there will be a hell of a lot more Kiwis entering retirement with a mortgage in about 30 or 40 years. Young people will be buying later with larger loans.

    Someone suggested this might be the first time a following generation will be worse off than the previous one, although technology might turn that around.

  5. #615
    Speedy Az winner69's Avatar
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    Quote Originally Posted by percy View Post
    A trend in NZ as well?

    Could upset retire sector assumptions about the grey tsunami going into retirement villages in droves
    “Don't focus on short-term swings in price …..better to hope that the price will eventually go higher”
    WB

  6. #616
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    Quote Originally Posted by winner69 View Post
    A trend in NZ as well?

    Could upset retire sector assumptions about the grey tsunami going into retirement villages in droves
    Continued growth in house prices exceeding growth in household incomes and growing inequality of wealth is not so good for the RV sector in its current form. Oldies owning multiple properties are unlikely to want more than one ORA for a unit. Whereas those who are priced out of home ownership are unlikely to be able to afford an ORA, unless they have accumulated substantial pension funds, which seems unlikely with Kiwisaver in its current form. At least the Australian pension scheme is more conducive and appealing for people to build up substantial balances.

    Using debt to leverage assets with almost guaranteed capital gains, has become the bedrock of the Kiwi nest-egg building. So I am sure kiwis too would be comfortable with debt carrying into their senior years to be able to get an ever more expensive piece of the action.
    Last edited by Bjauck; 10-01-2024 at 07:06 PM.

  7. #617
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    This statement from Mary Holm reads: for every $100,000 you have saved, you can spend $100 a week. How accurate would you rate that statement? Is there a basis for her claim?

  8. #618
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    Quote Originally Posted by Fred114 View Post
    This statement from Mary Holm reads: for every $100,000 you have saved, you can spend $100 a week. How accurate would you rate that statement? Is there a basis for her claim?
    Here is her comment - https://maryholm.com/nz-herald-27-january-2024/

    Probably working on the basis of returning circa 5% pa - whether interest, shares, other investments and paying lower tax rates when retired.

    I note she says 'conservatively', and a simplistic calculation.

    She's right though. $4m in the bank then hubby can retire!!
    Last edited by Sideshow Bob; 29-01-2024 at 08:37 AM.

  9. #619
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    Quote Originally Posted by Fred114 View Post
    This statement from Mary Holm reads: [FONT="]for every $100,000 you have saved, you can spend $100 a week[/FONT]. How accurate would you rate that statement? Is there a basis for her claim?
    As a generalisation it's a fair enough starting point.

  10. #620
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    Quote Originally Posted by Fred114 View Post
    This statement from Mary Holm reads: for every $100,000 you have saved, you can spend $100 a week. How accurate would you rate that statement? Is there a basis for her claim?
    $5,200 equates to 5.2% pa. If the $100,000 is in term deposits and with current 6% interest rates at about 4.2% after about 30% tax, then your capital would only shrink by about $1000 pa. However the following year’s return would be smaller.

    What are the assumptions with the inflation rate? Presumably Mary’s statement was set within the context of an article or response to a reader’s question?

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