Too poor to retire

Too poor to retire: More Australians than ever will work past 70 | smh.com.au

And in my view this is why some form of investment is the only way of having a fighting chance for a decent retirement for many Australians.

 

Only if you do it on a large scale.
I have some clients in nursing homes who don't receive government pensions because they own a couple of properties.

There are huge problems caused with expensive maintenance issues like replacing a hot water service etc because they are not able to then pay their nursing home fees.

Sometimes they are worse off than people who own nothing and are entitled to government assistance.

Clients with 10 plus properties and ones that are in the more affluent areas have less of a cash shortfall problem.

 

I think Cash flow is a massive problem in Australia at the moment.
Government here rewards lazy people who have no assets vs people who work hard etc.
One big issue Australia has at the moment that cost of living vs an average return does not make sense.

 

The article makes me feel sorry for childcare workers. The majority of them work hard looking after our kids so we can go out and earn a better wage and retire earlier, and that is what they have to look forward to!

 

I came to the realisation a long time ago that there is no knight in shining armour that is going to come to save anyone from a (to put it mildly) financially challenging retirement. No government, no policy, no nothing is going to come to save anyone imo.

The blame game is completely and totally useless. Even when there is legitimate blame to be spread around, its a total death trap to go down that path.

We have all seen people on average incomes, average intelligence, very busy lives, able to build some wealth because they had become very committed to having some form of a better retirement. Personally, I think everyone who is able to should be trying to invest in their future for a better retirement.

How we choose to live now will largely determine what kind of life we have after 50plus. And for many of us who will live past 85-90+...that's a lot of years to be struggling.

Just my opinion.



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Generous super concessions.
Negative gearing.
50% capital gains tax on IPs.
No capital gains tax on PPOR.
Not to mention the abundance of middle class welfare that gets splashed out. The problem with Australians is they don't realise how good they've got it and everybody is always looking for more. Even people with multiple IPs and share portfolios etc. are constantly crying poor and whinging that they get taxed too much...

 

1. Live within your means
2. Learn to save.

And in true fashion of this article: Its the Governments fault for not providing that education to us in Primary school. waaaaaa waaaaa

 

Or even simpler - spend less than you earn

 

Oh social responsibility, I get it now.

What's the point of saving for our retirement if there are false expectations? Like having adequate funds in super to cover our living expenses for 10+ years.

On my back of an envelope calculation, the basic compulsory super contributions of 9.5% on a $55K starting salary, increased @ 2.5% pa (cpi), net returns @ 5% pa (2.5% above cpi) & 45 years in paid work, would provide a super pension of 60% of final year income indexed @ 2.5% for 21 years. This assumes that they haven't contributed 1 cent of their own money to super or have other savings.

 

This is why properties shouldn't be held once you retire. The cashflow is terrible and they are not passive investments, more a semi/part time job. They are great for making money when you are working because you can leverage hard and take risks but they should be sold down as you approach retirement and move the money into shares.

 

Why don't they sell one or both of those properties over time?

I've noticed that most people here start off with the expectation of funding their own comfortable retirement. That soon morphs into funding their own retirement off the dividends/rent of their investments and leaving the capital to their kids.

 

isnt that a good thing? i'd consider the fact that my investments meant i didnt need a govt pension in retirement to be something worth being happy about not lamented.

it's scary how many people in this country view not getting the pension as "missing out". if theyve been investing even very conservatively for decades just sell the property, realise the gains and not worry about choosing between a hot water unit for a tenant or a rood over their own heads.

|i definitely dont think someone with nothing and on govt pension at old age is better off, the people in your example have something almost priceless - options.

 

I agree. Personally I view the pension as a dream snatching, soul destroying, dangling of 'candy' that is being waved, only to find out that when many get it, its rotten with ants.

 

@Leo2413 - Is it better to aim high & underachieve or aim low (go for broke/spend up big time) & win (the pension)?

 

i view it as worse, someone who has the ability to be a self funded retiree but ends up on the pension by design is in no way better than a younger dole bludger.

our governments only have finite resources. every person deciding to take that option when they have/had others is taking, every single year, roughly what it would cost to rent a home for a truly needy family for an entire year. it's selfish, greedy and not acceptable.

for clarity, im referring to those on the pension who truly do or did have other options and not those who are truly needy and caught in between being guilty of not being financially sensible and growing up being told the govt would look after you in retirement.

 

35 years and still under 100k in super...I think that their is a misunderstanding that super isn't a set and forget. People forget that it's an investment, with risk. Even without a SMSF, I was checking the performance regularly and switching between investment options.

 

For me the answer is obvious, which I think is the point your making too.

 

I think the lady in the article has been working for 35 years, which makes her at least 50. Not much long to go until she retires!

 

We get taxed way too much in oz. especially money that is then used and given to unemployed bludgers. We should be considering 15% income tax like HK and Singapore and zero capita gains tax like they have (and even NZ has).

 

Are you suggesting that shares have less risk than property?