Pension Asset Test Changes.

[Renato1 (Renato)]

Originally Posted by sn1987a

$823000-$375000 = $448000

take $448000 to the casino and put it on black

roughly 50% of people win an extra $448000 to make up the difference and the losers are still better off with $375000

vote me for treasurer

You Sir, are a genius!
Assuming one doesn't want a more expensive, bigger house, one can't really lose with this strategy.
Regards,
Renato

[glend (Glen)]

Removed my input

[Renato1 (Renato)]

Originally Posted by glend

It's about how you manage it. Forget Annuities, they are stacked against the buyer to make money for the seller. There are plenty of managed funds that provide investment streams returning around 10%. Avoid the high fees funds, and pick a good performer. My Super fund has been growing just the Balanced choice by more than 10% for many years now. It's about the level of risk you personally will accept. To get the equivalent of a full pension(for a couple) you need only about $340k in investments. The Health Card is not part of the changes, it has already been stated that all retirees will still get access to the Health Card, even the millionaires.

Don't believe the propaganda that sites the cash rate as the return on investment in pension impact comparisons. The lesson is that everyone has to pick a risk profile that gets them what they need. Low interest rates across the whole are a fact of live and no where are you going to get the old term deposit rates of +10% (that we enjoyed back when mortgage rates were 17% (thank you Paul Keating for that nigthmare).

While existing Health card holders with $1.1million in assets get to keep it, future people who are ruled out from the pension under these changes, will not get it.

How well did your balanced fund perform from 2008 to 2011? For a relatively safe investment, one can only really count on something paying 2 to 4 percentage points above the risk-free rate of return (government bonds) in the long term, given the guaranteed eventual ups and downs.

I have seen plenty of people in the past caught out badly by planning their retirement on 10% rates of return in perpetuity. It doesn't work out that way.

Can I take it that the Managed Fund income streams that you mention are taxable? Whereas the income streams from managed funds within Allocated Pensions are effectively tax free. I wouldn't be in a hurry to get out of Allocated Pensions just yet.

$340,000 does not deliver the same as an old Age pensioner couple gets.
Firstly, it does not deliver the effective up to $5000 from the Health Card.
Secondly, the money will be taxable.
Thirdly, there is no guarantee that it can maintain the investment return at 10%.
Fourthly, it is constantly losing value to inflation, whereas the pensioners don't have that problem as their income stream is constantly being indexed upward.
Regards,
Renato

[sn1987a (Barry)]

Originally Posted by Renato1

You Sir, are a genius!
Assuming one doesn't want a more expensive, bigger house, one can't really lose with this strategy.
Regards,
Renato

http://www.businessinsider.com.au/3d...orhoods-2015-3

[xelasnave]

You need a bundle to live off interest.
Inflation erodes capital value.
When I was young I nearly took out a life policy for $50k
That would pay off the mortgage and the balance invested would provide income for the family.
If someone had of suggested that reality on retirement Would need a 2mill plus nest egg for it would have been unbelievable.
It is hard to plan.

[Eratosthenes (Peter)]

Originally Posted by Renato1

That is not accurate. By the Credit Swisse Global Wealth report, the richest 10% of Australians own 50% of the wealth, which is a much better outcome than say the USA, where the top 10% own 76% of the wealth, and the UK where the top 10% own 85% of the wealth. And there are plenty of countries where that percentage is much higher.

As for paying minimal tax, that winds up being incorrect to. Most of the tax revenue comes from companies and the top 35% of taxpayers. Yes, we always used to see articles and news bulletins how people like Kerry Packer only paid 13 cents in the dollar tax. What none of those articles pointed out was the reason he only paid 13 cents in the dollar was because his companies had paid the other 33 cents in the dollar - and that people like Paul Keating had bought in something called Franking Credits to make sure that people were only taxed once on their income, rather than being unfairly taxed twice (which would have made them eventually move overseas).
Regards,
Renato

There are many statistics that can be quoted (my OP should have read 10% not 1% - thanks for correction) that paint a disturbing picture and trend, such as the poorest 20% of Australians owning only 1% of the country's wealth.

The trend in the US is stark. The 1950s are commonly viewed as the peak in US standard of living. In the 1950s, the top 400 richest Americans earned on average 13 million dollars per year and typically paid 52% in income tax. By the year 2007, the top 400 richest Americans earned on average just under 300 million dollars per year each and paid about 18% tax.

The model in the west is to socialise costs and risk, whilst privatising profits and power. Its one big corporate banking scam - a ponzy scheme.

Social Problems tend to center around distribution and equity - and politically shutting out the majority of the citizenry from decision making processes and our country's vast wealth and opportunities.

This ain't no Democracy we live in folks - it's like Mussolini said "Fascism should be called corporatism because it is the merger of state and corporate power"

I wonder whether Murdoch supports democratic social structures - what does Bolt say in his editorials?

......meanwhile it is predicted that 1% of the worlds population will control abotu 50% of the globe's wealth by the year 2016 - not too far away folks
http://www.abc.net.au/news/2015-01-2...e-rise/6027744

[PCH (Paul)]

It's clear from these discussions that hardly any two people think alike. We all have our own thoughts and our own agendas, which is entirely our prerogative. And we all seem to think that we individually have the answer!

So how could we ever reasonably expect to vote in a government that would do what we individually wanted them to, since so few of us agree on what the right path actually is.

It's inevitable by definition that they'll piss off most people, most of the time.

And since they achieve that regardless of who's in, I'm guessing that they must be doing a pretty decent job.

Seriously though, how could they ever possibly get it right for the majority when we happy few, we band of brothers are in such disagreement?

PS: 10 extra points for anyone who spotted the Shakespeare quote thrown into the last line

[sn1987a (Barry)]

some questions......

Say someone with liquidated assets just reached pension age and is thrown in jail for stealing a huge amount of money which is stashed/bitcoined/buried overseas and never recovered, do they still get to collect/accumulate the pension?.

How long would a nice harmless old pensioner with good behaviour expect to spend in jail, say on a prison farm with 3 squares a day, free room, utilities and health care?.

No reason, just interested

[glend (Glen)]

Removing my input

[Eratosthenes (Peter)]

Originally Posted by glend

Renato why start the thread if you have all the answers? Unless this is just a rant?

I give up trying. I know what works for me and that is fine.

I think that you just highlighted what the problem is in your last sentence.

The polemic has always been between individual needs and collective good and fairness.

A society or civilisation is ultimately judged upon how it treats the needy, elderly and disadvantaged etc....

We could of course allocate numerical importance to each citizen in our collective and those that don't satisfy a minimum level of productivity or royalty or Plutocratic supremacy are executed and used as compost.

[Renato1 (Renato)]

Originally Posted by sn1987a

http://www.businessinsider.com.au/3d...orhoods-2015-3

Extremely interesting, thanks.

Can one smoke in plastic houses?

More importantly, despite the well meaning desire to build affordable neighbourhoods - well we have the examples here of what happened in public housing - what happens when vandals decide it's good fun setting fire to the homes?
Regards,
Renato

[Renato1 (Renato)]

Originally Posted by Eratosthenes

There are many statistics that can be quoted (my OP should have read 10% not 1% - thanks for correction) that paint a disturbing picture and trend, such as the poorest 20% of Australians owning only 1% of the country's wealth.

The trend in the US is stark. The 1950s are commonly viewed as the peak in US standard of living. In the 1950s, the top 400 richest Americans earned on average 13 million dollars per year and typically paid 52% in income tax. By the year 2007, the top 400 richest Americans earned on average just under 300 million dollars per year each and paid about 18% tax.

The model in the west is to socialise costs and risk, whilst privatising profits and power. Its one big corporate banking scam - a ponzy scheme.

Social Problems tend to center around distribution and equity - and politically shutting out the majority of the citizenry from decision making processes and our country's vast wealth and opportunities.

This ain't no Democracy we live in folks - it's like Mussolini said "Fascism should be called corporatism because it is the merger of state and corporate power"

I wonder whether Murdoch supports democratic social structures - what does Bolt say in his editorials?

......meanwhile it is predicted that 1% of the worlds population will control abotu 50% of the globe's wealth by the year 2016 - not too far away folks
http://www.abc.net.au/news/2015-01-2...e-rise/6027744

We live in a much better country than the USA. Again, by the Credit Swisse Global Wealth report-
Number of Adult Australians owning US$10,000 or less = 6%
Number of Adult Americans owning US$10,000 or less = 29%

The land of the free seems to be very much into the freedom to be extremely poor.
Regards,
Renato

[Renato1 (Renato)]

Originally Posted by glend

Renato why start the thread if you have all the answers? Unless this is just a rant?

I give up trying. I know what works for me and that is fine.

As I said - this does not affect me, as I will never get an old age pension.

I certainly find it interesting that a policy that is highly inequitable is being highly praised as economically responsible, when I suspect that it will ultimately lead to even more people being on the full old age pension - especially people who don't want to be on the full old age pension.

I think this may have ramifications for a lot of people approaching retirement, and while no doubt they will discuss it with financial advisors at some time - they had better start looking into it earlier than would previously have been the case.
Regards,
Renato

[bugeater (Marty)]

The big problem is demographics. We have an aging society with a big bulge of baby boomers. So the tax base shrinks and demands from pensions and healthcare increase. It's not pretty. Thank goodness some people had the foresight to see this coming decades ago and actually put the superannuation system in place. Otherwise things would be much worse. But at the end of the day all the younger people in society will be paying tax to fund benefits they themselves will never ever receive...

[Kev11 (Kevin)]

This thread illustrates my point. Roughly 5:2 of the view that people with less assets are better off than people with more. Just the sort of "downward envy" that allows the top 10% to keep adding to the 50% of the wealth they already own in a country where every adult has the same vote!

[xelasnave]

Who was it when asked how much money he wanted, as he was already very rich, he replied....Just a little bit more.

I think that goes for most people ...we all wanted just a little bit more.

[sn1987a (Barry)]

How stupid are the people running the show?, this.... ??! effme I give up, I really do


http://theconversation.com/factcheck...-workers-43470

[glend (Glen)]

Decided to remove my input

[xelasnave]

Much the same here.
Lucky for me I spend very little because there is little I want or need.
But I think I will get another boat...that won't cost much...all good.

[Renato1 (Renato)]

Originally Posted by Kev11

This thread illustrates my point. Roughly 5:2 of the view that people with less assets are better off than people with more. Just the sort of "downward envy" that allows the top 10% to keep adding to the 50% of the wealth they already own in a country where every adult has the same vote!

There isn't any "downward envy" - how could you come to that conclusion?

The envy is all upward towards the "millionaire" pensioners who only own one million dollars, and who in income terms are worse off than old age pensioners (who are in effect notional millionaires in their own right).

This is plainly evident with the Greens happily attacking the "millionaire pensioners". Are you saying that the Greens are now trying to make the top 10% more wealthy?
Regards,
Renato