How much capital do I need to retire comfortably on ?

[Bjauck]

Means tested in Aussie, about $72,000 personal from memory when its cuts out. Sorry I an not an authority on their tax system so don't know how rigorously they police income splitting, alienation of assets into other entities e.t.c. This personal income means test seems about right but to the best of my knowledge there's nothing you can do about people organizing their affairs in a tax efficient way so that their income is channeled into a family trust.

....as long as the settlor-discretionary beneficiary has to include the value and income of the trust in assessing eligibility for benefits and other government help.

In Australia, legislation was changed in 2002 to capture income and assets from private discretionary trusts in assessing eligibility for government payments. They have rules for assessing how much of the trust should be attributed to the applicant.
https://www.professionalplanner.com....rusts-37837/7/

[artemis]

Don't know if it still applies but used to be the case that in certain circs interest from proceeds of a house sale was not counted as income by WINZ for a defined period, maybe 2 years. This was to allow people to repurchase, usually after a relationship breakdown. Sensible.

[Bjauck]

Don't know if it still applies but used to be the case that in certain circs interest from proceeds of a house sale was not counted as income by WINZ for a defined period, maybe 2 years. This was to allow people to repurchase, usually after a relationship breakdown. Sensible.

I disagree. Homeowners who have all their equity investment in non tax paying owner-occupied housing equity have already been subsidised by those who have built up their equity in tax-paying financial assets over the years. They should not be subsidised a second time when applying for a benefit. If there has to be an allowance, when applying for a benefit, for owner-occupied housing equity then there should be a more generous investment and income allowance to those who do not have owner-occupied housing equity.

[winner69]

Love this .....it's Hitler to blame Aaron

http://www.stuff.co.nz/national/9023...arent-my-fault

Now, you youngsters are getting criticised for not grafting away, for feeling entitled. Weird. If we boomers are famous for anything it is for frolicking through the era of sex, drugs and rock 'n' roll in our tie-dyed t-shirts.
We protested against Vietnam, we surfed, we went to rock festivals, got covered in mud, used rustic toilets, and some of us inhaled

[Aaron]

Love this .....it's Hitler to blame Aaron
[/I]

Well it is a new reason for the current situation re nz super but not a strong argument from the boomer camp in my opinion. I was lead to believe that the young boomer was busy scrimping and saving and buying houses with expensive mortgages at 20%. Was there time or money for fun? Not if you read this website.

What would be good is if we can accept current nz super is being paid from current taxes and nothing was put aside except the Cullen fund. Also accept that all else being equal nz super and health costs will rise significantly and possibly be unaffordable if we don't make changes. We know why Bill English's proposal is so far into the future and personally if National win the next election based on tax cuts instead of adding to the Cullen fund I will be angry.
Why incremental changes that are reasonable can't be made now comes down to the voting public. Why everyone is supporting multi-millionaires on nz super is beyond me. How about means testing and set the income threshold quite high.

If I were a boomer rather than fighting to screw over the next generation I would be looking to support small reasonable tweaks to the system so that I don't end up in my late 60s or early 70s unable to generate income with my health insurance premiums now unaffordable with the health system rationing services and the elderly getting the thin edge of the wedge.
If we all make small sacrifices now hopefully we won't have harder sacrifices to make 20 years from now. For example the move to 67 retirement age. I assume Bill has looked at the demographics and thought he should include enough of generation X to win the election. How about go back to labour's plan bring it forward but space out the changes I think it included all the boomers. Generation x and millennials should be getting used to this by now. Stop the self centred selfish attitude that has infected this country and look longer term than the next three years.

[fungus pudding]

Well it is a new reason for the current situation re nz super but not a strong argument from the boomer camp in my opinion. I was lead to believe that the young boomer was busy scrimping and saving and buying houses with expensive mortgages at 20%. Was there time or money for fun? Not if you read this website.

What would be good is if we can accept current nz super is being paid from current taxes and nothing was put aside except the Cullen fund. Also accept that all else being equal nz super and health costs will rise significantly and possibly be unaffordable if we don't make changes. We know why Bill English's proposal is so far into the future and personally if National win the next election based on tax cuts instead of adding to the Cullen fund I will be angry.
Why incremental changes that are reasonable can't be made now comes down to the voting public. Why everyone is supporting multi-millionaires on nz super is beyond me. How about means testing and set the income threshold quite high.

If I were a boomer rather than fighting to screw over the next generation I would be looking to support small reasonable tweaks to the system so that I don't end up in my late 60s or early 70s unable to generate income with my health insurance premiums now unaffordable with the health system rationing services and the elderly getting the thin edge of the wedge.
If we all make small sacrifices now hopefully we won't have harder sacrifices to make 20 years from now. For example the move to 67 retirement age. I assume Bill has looked at the demographics and thought he should include enough of generation X to win the election. How about go back to labour's plan bring it forward but space out the changes I think it included all the boomers. Generation x and millennials should be getting used to this by now. Stop the self centred selfish attitude that has infected this country and look longer term than the next three years.

Means testing would be ridiculous. It discourages saving, other than a bit under the mattress. It's costly to administer and overlooks the fact that progressive taxes erode much of the superannuation payment to those who have scrimped, saved, and invested - or continue to work. It's universal and so it should be.

[winner69]

Aaron - some of the electorate even think it's unfair their super entitlement is taxed - they paid taxes all their working life to get super so taxing it is like double taxation ....and so unfair

That's an indication how sensitive the arguments are

[Bjauck]

Means testing would be ridiculous. It discourages saving, other than a bit under the mattress. It's costly to administer and overlooks the fact that progressive taxes erode much of the superannuation payment to those who have scrimped, saved, and invested - or continue to work. It's universal and so it should be.

Australia has had means testing and their savings rates are higher than NZ's. Australian households have more financial investments than NZ households.

What may encourage NZers to invest more into financial investments such as shares and fixed investments (instead of building up equity in McMansions and investment real estate) would be to to introduce tax reform so that investments that obtain most of their gains via capital appreciation of owner's equity, pay a similar percentage of their gains in tax as that payable on financial fixed interest and income producing share investments.

[Aaron]

Aaron - some of the electorate even think it's unfair their super entitlement is taxed - they paid taxes all their working life to get super so taxing it is like double taxation ....and so unfair

That's an indication how sensitive the arguments are

Firstly FP we have had the national superannuation surcharge and people who didn't need nz super paid it back. Probably wasn't perfect but it was a start. It could be a disincentive to save (not for me personally but I can see the reasoning behind your statement) and that is why although I don't like compulsion if we are to keep a national super scheme kiwisaver needs to be compulsory so that everyone is forced to save something for retirement. It is like an increase in taxes but easier to do as people see it benefiting them directly.

Winner69 still not getting it are you (and a lot of other boomers) you have paid taxes all your life OK but very little if any went towards paying for current retirees. nz super is being paid from "current taxation" all the taxes you paid got spent long ago on things like free tertiary education and full employment through bloated state owned enterprises that were propped up with tax dollars. Hard to argue to a kid that because you paid taxes all your life you deserve nz super but they can pay tax all their life and at this stage they may get something at 67 more likely there will be a lot more changes than that by the time young people retire so they will probably get less.

[macduffy]

Perhaps I read that wrong but I didn't think that winner was advocating the "unfair, double taxing" view - merely pointing out that this was a strongly held view, by some, around this fraught matter.