How much capital do I need to retire comfortably on ?

[Sideshow Bob]

According to that article, it's very shameful:

"The average KiwiSaver balance is $29,022, with the average balance for a male 20% higher than the average balance for a female – males ($32,553) and females ($27,061).

Those balance are a HUGE difference to the growth in my father's TFSA (link above). $300,000 CDN vs $30,000 NZD ? Contributions to each investment scheme would be similar too as TFSA start in 2009 - $5,000 and grew to now $6,000. Actually the person on Kiwi Saver at the minimum 3% contribution should see 6% total going in - considering a person on $100,000/year (not out of the ordinary living in Auckland), they put in $6,000 towards KS.

Why is there such a huge difference? Psst... Mgt Fees and IRD's invisible hand. Oh also, those differences between 'conservative' and 'aggressive' is of moot interest because for the vast majority of those years from 2009 onwards, interest rates were at record lows so who is the fool to apportion their KS fund to have more fix term interest when they should be going all out in equities?

And many Kiwis will think Kiwisaver will do the job for my retirement, but how many withdraw money for a house deposit, or hardship, or just think "she'll be right"?

How many wake up too late that it is going to be woefully inadequate.

I do suppose there is the element of inheritance/inter-generational wealth that some might be relying on? Inheriting half of the oldies house that they bought for $20k in 1980 and now worth $2.15m......

[GTM 3442]

One of the more scary things to think about is what the New Zealand retirement savings picture could look like without KiwiSaver.

[CJ]

Have they worked out who has the $544m yet?? They were picking Gina Reinhardt but don't think its her.

Wouldn’t think it was her unless there was tax incentives to move wealth into one.

Surely it’s Cannon-Brookes? Put some of his shares in Atlassian in his self managed super fund when they were worth hardly anything.

[Aaron]

Maybe Aussie not as egalitarian and perfect as I thought. Not sure "The Australian Institute's" bent but probably left leaning based on their concerns about 10% taking 93% of the countries economic gains since 2008-2009.

The numbers are so big they are hard to believe.

https://www.abc.net.au/news/2023-04-...ains/102200878

A progressive tax system helps to balance this somewhat.

I wonder what has happened since 2008-2009 to channel all the wealth into the top 10%'s hands? Hmmm tricky. The cost of capital is near zero and the people with all the capital are doing really well. A tough one, perhaps we need some economists or central bankers to explain what is happening.

Can 90% of the population be stupid and/or lazy? (possible it is Aussie after all).

Stupid if they put up with central banks supporting the asset prices of the 10% at the expense of everyone else that is for sure, or maybe I just don't understand trickle down economics.

[Sideshow Bob]

Survey on Australian attitudes to retirement

https://www.morningstar.com.au/insig...9%20May%202023

[Sideshow Bob]

https://www.stuff.co.nz/national/300...y+26+June+2023

$775k savings + NZ Super for a "choices" retirement in a metro city.

Mind due, that was 2022, so given current environment, that is probably over a mil.....

[SBQ]

Inflation has halved everything in the past 5 years. Anotherwords in 5 years time, that $775K will lose purchasing power. If inflation rate is higher than the real rate of return by keeping cash in a bank account, then i'm afraid the end result will always be in a losing proposition.

Again, look back in time when we had low inflation, banks were barely paying 1% term deposit rates.

[Aaron]

Remembered that this was the thread to have a crack at boomers. Turn away now if you are 60 or older.

I say nothing but found this article regarding Australia interesting and the linked articles at the bottom of the page follow a similar theme. Not sure if NZ is in the same boat but suspect it is.

https://www.abc.net.au/news/2023-11-...ents/103126250

[777]

Remembered that this was the thread to have a crack at boomers. Turn away now if you are 60 or older.

I say nothing but found this article regarding Australia interesting and the linked articles at the bottom of the page follow a similar theme. Not sure if NZ is in the same boat but suspect it is.

https://www.abc.net.au/news/2023-11-...ents/103126250

You are the only one that has some hang up with "boomers" as you continue to call them. If you look back at page one you will see it was started by a "boomer". I have said before, "get a life" Stop whinging, no one is interested in failures.

[Aaron]

You are the only one that has some hang up with "boomers" as you continue to call them. If you look back at page one you will see it was started by a "boomer". I have said before, "get a life" Stop whinging, no one is interested in failures.

Just sharing an interesting article. Appreciate that you took the time to respond.

I don't know if it is just me with the hang up, the articles in Australia seemed to identify people by generation. Just an observation, interesting that in Aussie their national super is means and asset tested and they have a capital gains tax so asset owners can contribute to society and they have a much more progressive income tax system.

Based on the rhetoric leading up to the elections here in NZ I would assume Aussie would be an absolute basket case with all that additional tax burden. Can't understand why our young people are going there. I imagine with all the burden imposed on the wealthy in Australia all the rich people would have left by now.

I miss Beagle, he could always start an interesting thread.

And sticking to the thread a $70,000 income off $1,000,000 in capital is nearly doable with a 7% yield, so sad to hear interest rates and yields could be heading back down soon. A 5% yield takes my capital requirements back up to $1,400,000 amazing what a few percentage points can do for you.

Would $70k still be enough to live on? perhaps my aspirations need to grow.

Imagine a 10% yield. A great pity that capital can be printed up at no cost so easily by central bankers, so that cash savings have little or no value when compared to inflation.