Retirees suffer! - Page 2

Merlin66 (Ken) · #21 27-01-2016, 01:22 PM

Marc,
We're talking about those at the other end...not earning but living on their accumulated super.
We, in this situation, are "in control" of the funds and investments.
The current interest rate and "concerns" about safe investments makes life a little interesting......

dimithri86 (Dimithri) · #22 27-01-2016, 01:51 PM

I wonder if this would work.

A gov. super...where you keep your money with them (so they can borrow less to fund public works), and then they pay you back when you retire. With such a big organisation holding the cash, they should be able to give you a fixed return.

bigjoe (JOSEPH) · #23 27-01-2016, 02:06 PM

Quote:

Originally Posted by Merlin66

Yeah but....
If I'd pi$$$ away all the funds I'd be eligible for a Gov pension, medical rebates and subsidised transport.......

Yes Merlin! It seems like mediocrity is actually encouraged!

bigjoe.

bojan · #24 27-01-2016, 02:13 PM

Quote:

Originally Posted by bigjoe

Yes Merlin! It seems like mediocrity is actually encouraged!

bigjoe.

90% of population is mediocre (meaning: average) in terms of super etc.
I am not sure what is your point?

Those who know how to do business are not relying on gov pension anyway, they don't need it.

bugeater (Marty) · #25 27-01-2016, 02:34 PM

Despite common misconceptions, investing is not about timing markets. It's mainly about building diversified portfolios. It's because you can't really predict disasters with sufficient accuracy or timing, but you can build a portfolio that does well over the long-term and can ride out the bad patches. If you can't handle the bad patches, then you need a lower risk portfolio.

Frankly, I think if you try to time markets yourself, you'll almost inevitably get it wrong because this usually means chasing positive performance or running away from negative performance. This is too late. Remember the 2009 equities rebound right at the end of the GFC?

Merlin66 (Ken) · #26 27-01-2016, 03:49 PM

Marty,
I agree to a point....but at 70 years old what's a ""......but you can build a portfolio that does well over the long-term"" - long-term??.

gts055 (Mark) · #27 27-01-2016, 04:08 PM

Hii Marty, I remember the 2009 rebound and just refreshed my memory of the all ordinaries trend since Dec 2006 (http://www.asx.com.au/about/historic...statistics.htm) A retiree in 2006 might have had an expected income based on a holding in 2006. If it was necessary to sell stocks in the declining market to maintain income then that person's future return will likely be affected as the capital base will have diminished. In the last 9 years the market has not recovered to the peak all ordinaries of 6779 in October 2007 but then perhaps this extreme should not be considered. During 2006 the all ordinaries were around 5200 and closed today at 5002. I sympathise for those relying on a superfund biased to shares. I have none and rely on my business for income. All one can do is try to minimise risk. Mark

bugeater (Marty) · #28 27-01-2016, 04:09 PM

Long-term is a period of time to average out the ups and downs. It's to get away from exactly what that article is about. In fact it's kind of the opposite of market timing - it's to try to minimise the effect timing has. As such, it is undefined, but I'd say at least 10 years. Most people fall into that bucket.

bugeater (Marty) · #29 27-01-2016, 04:26 PM

Quote:

Originally Posted by gts055

Hii Marty, I remember the 2009 rebound and just refreshed my memory of the all ordinaries trend since Dec 2006 (http://www.asx.com.au/about/historic...statistics.htm) A retiree in 2006 might have had an expected income based on a holding in 2006. If it was necessary to sell stocks in the declining market to maintain income then that person's future return will likely be affected as the capital base will have diminished. In the last 9 years the market has not recovered to the peak all ordinaries of 6779 in October 2007 but then perhaps this extreme should not be considered. During 2006 the all ordinaries were around 5200 and closed today at 5002. I sympathise for those relying on a superfund biased to shares. I have none and rely on my business for income. All one can do is try to minimise risk. Mark

I don't think that index includes dividends. From Oct 06 to now you should be well ahead, if you reinvest dividends and don't drawdown on your portfolio. Those assumptions are reasonable for most, but not retirees. That said, holding a 100% listed equities portfolio is asking for trouble.

multiweb (Marc) · #30 27-01-2016, 04:28 PM

Quote:

Originally Posted by Merlin66

Marc,
We're talking about those at the other end...not earning but living on their accumulated super.
We, in this situation, are "in control" of the funds and investments.
The current interest rate and "concerns" about safe investments makes life a little interesting......

True - the cash rate is a shocker too. I wonder if it'll ever go back up so people who saved are actually rewarded somewhat. But with the trend now being that most people are in debt and living on borrowed money it would create a revolution or civil unrest.

What used to be normal or living within one's means has been long forgotten.

Merlin66 (Ken) · #31 27-01-2016, 04:36 PM

Guys,
The question was directed towards retirees - trying to live on a limited (and seemingly constantly diminishing) super "nest egg".
Marty - At 70 ten years feels like a looooong time. I need to live that long....
I think the consensus is to put the funds into back accounts and hope to maintain at least 2% over the next few years....

(I DO like the idea of a Gov. backed super fund with guaranteed outcomes)

gts055 (Mark) · #32 27-01-2016, 04:37 PM

Hii Marty, all ordinaries excludes dividends. From your view in an accumulation phase with dividends reinvested (thats if dividends are maintained by the company in a market downturn), recovery may be faster. The discussion is really about retirees who are not in that position. And "long term" gives little comfort to those drawing down their superfund if its biased to shares. Mark - delaying retirement for as long as its physically possible

multiweb (Marc) · #33 27-01-2016, 04:42 PM

Quote:

Originally Posted by Merlin66

I think the consensus is to put the funds into back accounts and hope to maintain at least 2% over the next few years....

(I DO like the idea of a Gov. backed super fund with guaranteed outcomes)

There are a few online only service like UBANK or RABO Direct who can help you get a (bit of a) better deal with interest rates.

The gov. backed super sounds good but as always the money would be used for something else IMHO and we'd start hearing about a "Super deficit" in the news.

I think realistically the next step will be taxes on withdrawing super money after the reservation age, although we've always been told it won't be.

bugeater (Marty) · #34 27-01-2016, 04:50 PM

Quote:

Originally Posted by gts055

The discussion is really about retirees who are not in that position. And "long term" gives little comfort to those drawing down their superfund if its biased to shares. Mark - delaying retirement for as long as its physically possible

Clearly your circumstances matter a lot and will differ even between retirees. I would assume the super fund advisors could help with individualised strategy?

AndrewJ · #35 27-01-2016, 04:57 PM

Quote:

I think realistically the next step will be taxes on withdrawing super money after the reservation age,

Based on the recent discussions on how super was never meant to be a "wealth accumulation" system, but a means to provide an individual with an income in retirement, where "on average" you die just as yr super runs out, I think it will be closer to the govt takes back any super residual when you die, ( and will further limit withdrawal to a set value per year to reduce the urge to splurge )
ie This would be similar to death duties, but would only apply to super.

If you die early, too bad, your money goes into a pot to fund a backup pension for those who live too long. ie the only difference between this and the old std pension schemes is the govt doesnt get to squander the pot of money as "general revenue" along the way.

I dont think the pollies have the guts to do that yet, but as the economy starts to bleed in the next few years, peoples super is the only place left to raid.

Andrew

rrussell1962 · #36 27-01-2016, 05:07 PM

A Government superfund with guaranteed outcomes? guaranteed outcomes was what sunk Equitable Life in the UK, and they had my money! A guaranteed outcome has to be backed up by somebody else's money. Mine in that case. Lesson learnt.

stanlite (Grady) · #37 27-01-2016, 05:34 PM

The other problem with the government super scheme is that governments often spend public funds on things people aren't willing to or shouldn't have to pay for. Getting a 5% return out of a public school building or a local road would be difficult because people wouldn't stomach the fees for usage. That is why so many of the toll roads, air and sea ports are owned by super funds, they offer a relatively stable source of income for the capital inputed and people are willing to pay for them. The same can't be said of national infrastructure since most people see such things as a public service.

I suppose the government could charge itself for the use on behalf of the Australian people and pay the super accounts. But then the beneficiaries of such a practice would be the wealthiest individuals who would pay the least for usage (eg for items like hospitals) but have the most funds in accounts. It would also probably mean higher taxes as the government would have to gaurentee a high enough return to attract people form private schemes (not a higher rate just a higher than the 3% rate of return expected for current infrastructure programs.

bigjoe (JOSEPH) · #38 27-01-2016, 05:35 PM

Quote:

Originally Posted by bojan

90% of population is mediocre (meaning: average) in terms of super etc.
I am not sure what is your point?

Those who know how to do business are not relying on gov pension anyway, they don't need it.

Hi Bojan .

I have known so many, who have the " blow ur doe" ( including there super) attitude and returned to a mediocre existance as when they could have easily bettered themselves.

bigjoe

alpal · #39 27-01-2016, 08:06 PM

Quote:

Originally Posted by AndrewJ

Based on the recent discussions on how super was never meant to be a "wealth accumulation" system, but a means to provide an individual with an income in retirement, where "on average" you die just as yr super runs out, I think it will be closer to the govt takes back any super residual when you die, ( and will further limit withdrawal to a set value per year to reduce the urge to splurge )
ie This would be similar to death duties, but would only apply to super.

If you die early, too bad, your money goes into a pot to fund a backup pension for those who live too long. ie the only difference between this and the old std pension schemes is the govt doesnt get to squander the pot of money as "general revenue" along the way.

I dont think the pollies have the guts to do that yet, but as the economy starts to bleed in the next few years, peoples super is the only place left to raid.

Andrew

One thing is for sure - the rules will keep on changing
especially as the Pollys cast their greedy eyes on that mountain of super money.

Chee · #40 27-01-2016, 09:36 PM

One of the rumour doing the round, is that, soon, all super withdrawals will be taxable. At the moment, if you are 60 and over and no longer working, you can withdraw all your super with no tax implication. Even your family home is no longer safe.
Yes, the pollies, are thinking of all possible ways to make up for the budget deficits. Gst increase is definitely on the card.