How much capital do I need to retire comfortably on ?

[Bjauck]

Kiwisaver has some pretty damn good incentives.... I just checked my balance the other day. My personal contributions amount to $13,568.44 and yet my total balance amounts to $40,407. I would call that a very good incentive!

Kiwisaver has weak incentives compared with overseas schemes, especially when your balance gets higher.

That notwithstanding, how would you feel that you had spent your working life being conscientious with Kiwisaver; being careful with your spending so that you can make payments to Kiwisaver. Your neighbour however opted out of Kiwisaver. Decades later you meet up in a nursing home. You have to pay for your accommodation but the government pays for your neighbour. Your neighbour talks to you about his luxury cruises and cordon bleu restaurants whilst you tell him about how you enjoyed your spare time darning your socks!

[macduffy]

Right on all counts, Aaron!

[Aaron]

That notwithstanding, how would you feel that you had spent your working life being conscientious with Kiwisaver; being careful with your spending so that you can make payments to Kiwisaver. Your neighbour however opted out of Kiwisaver. Decades later you meet up in a nursing home. You have to pay for your accommodation but the government pays for your neighbour. Your neighbour talks to you about his luxury cruises and cordon bleu restaurants whilst you tell him about how you enjoyed your spare time darning your socks!

Sorry still off thread but it will probably burn my britches after saving all my life foregoing travel and other fun to save only to have to use my savings to pay for my health care while the guy who has lived life to the full gets everyone else(taxpayers) to take care of his costs. Even worse if his wealth is in trust and his kids inheritance is saved at the expense of the NZ taxpayer. Although I don't think the amount of welfare benefits and living off the taxpayer is a life of luxury for someone with no savings. We did discuss all this before the last general election didn't we?

We had a general election and clear majority of NZers voted for what they thought was best for them (and maybe NZ and society as a whole).
Prior to the election I read a "thought leadership paper" (horrible term) from NZIER they came up with1/raising the retirement age, 2/capital gains tax, 3/compulsory superannuation saving. All policies adopted by Labour but all that achieved was to see Labour poll terribly. Hopefully next election we won’t be debating which party leader is the nicer guy but which party has the best policies for NZ’s future. Although I did enjoy seeing my MRP shares take off after the election.
Anyway as much as I dislike compulsion to do anything if Kiwisaver became compulsory you wouldn't have the problem that Bjauck just mentioned above. Don't go on about "it is up to the individual". I would probably drive faster than current speed limits and maybe without a seat belt on, or ride without a helmet, without compulsion. I don't fight it because it makes sense even though I don't like it. The idea of compulsory Kiwisaver is not nice but there are lots of us less intelligent people who sometimes need to be pushed to do the sensible thing.

[Bjauck]

Sorry still off thread but it will probably burn my britches after saving all my life foregoing travel...The idea of compulsory Kiwisaver is not nice but there are lots of us less intelligent people who sometimes need to be pushed to do the sensible thing.

That is right on the point I would think. What you posted affects how much capital is needed to comfortably retire on. If someone has no or few savings for retirement (even if by deliberately impoverishing themselves through a trust, scheme or by profligate spending) then the rest of us will end up paying more in some way, reducing our own ability to have a comfortable retirement.

[Winston001]

Oh golly, where to start.

Ok, a reality check. The average person (most Kiwis) never earn a high income in their lives so they don't have money to hide in trusts or under the mattress. Some of those people are talked into forming Family Trusts by their children with an eagle eye on inheritance. But all they have is a house - no millions stacked away, no yachts, no Gold Coast hideaway.

Yes - there are wealthy Kiwis who do take advantage of trust structures to hide assets and gain tax advantages, although at 33% trustee tax that's not so clever.

I have created many trusts for people in all manner of circumstances and have also talked other people out of it. One size does not fit all. My own parents do not have trusts and yes, Dad paid for his rest home care until he passed. It was a matter of dignity and independence.

[Aaron]

Oh golly, where to start.

Ok, a reality check. The average person (most Kiwis) never earn a high income in their lives so they don't have money to hide in trusts or under the mattress. Some of those people are talked into forming Family Trusts by their children with an eagle eye on inheritance. But all they have is a house - no millions stacked away, no yachts, no Gold Coast hideaway.

Yes - there are wealthy Kiwis who do take advantage of trust structures to hide assets and gain tax advantages, although at 33% trustee tax that's not so clever.

I have created many trusts for people in all manner of circumstances and have also talked other people out of it. One size does not fit all. My own parents do not have trusts and yes, Dad paid for his rest home care until he passed. It was a matter of dignity and independence.

Agreed Trusts are only useful if you have significant wealth which most of us don't. If you are wealthy you are probably already on the top 33% tax rate anyway. The trust will allow you to distribute income to beneficiaries who are on a lower tax rate. For example kids at University (over 16yrs). What is the benefit for society of giving that opportunity to someone already well off.

[winner69]

I hope that you guys are not thinking of cutting National Super.

Mine starts this week ..... A bit of extra cash for things like oysters and chips on the beach and other treats.

I don't really need it but it will be good to spend. After it is rightfully mine as the government has been putting a bit aside for years. My Dad said 'one and frippence of your tax pound goes towards your retirement son'. The JP who witnessed my application said 'no your Dad was wrong, it was one and sixpence'

That National Super is rightfully mine. I will selfishly accept it (taxable bugger it) with glee. So no talk of taking it away. It is up to you young uns to work out how to pay for it

[Beagle]

Agreed Trusts are only useful if you have significant wealth which most of us don't. If you are wealthy you are probably already on the top 33% tax rate anyway. The trust will allow you to distribute income to beneficiaries who are on a lower tax rate. For example kids at University (over 16yrs). What is the benefit for society of giving that opportunity to someone already well off.

Like I said, Trusts are a "can of worms" and will garner debate from a moral and ethical perspective so with all due respect to those of you who have already vented their spleen and other contemplating doing so, perhaps that's best left to its own thread that you are most welcome to start.

Granted these two topics are linked but perhaps now.... we can get back to the main thread topic.

[BIRMANBOY]

Happy birthday W69...it does come in handy. I'm sure you have worked hard your entire life as a vast majority of us have. It would be extremely difficult to live well off super alone but it is gratefully accepted. It would be political suicide to take it away so undoubtedly will be tinkered with over time to reduce the impact the growing number of retirees will have on fiscal balance.

I hope that you guys are not thinking of cutting National Super.

Mine starts this week ..... A bit of extra cash for things like oysters and chips on the beach and other treats.

I don't really need it but it will be good to spend. After it is rightfully mine as the government has been putting a bit aside for years. My Dad said 'one and frippence of your tax pound goes towards your retirement son'. The JP who witnessed my application said 'no your Dad was wrong, it was one and sixpence'

That National Super is rightfully mine. I will selfishly accept it (taxable bugger it) with glee. So no talk of taking it away. It is up to you young uns to work out how to pay for it

[Harvey Specter]

After it is rightfully mine as the government has been putting a bit aside for years.

They have not!

Even the 'cullen' fund is no where near fully funding retirement for the years it will be drawn down in.

However, tax rates have been (in theory) based on you receiving it so you are rightfully entitled to it.