Author Topic: Retirement Budget - how much do you expect to spend per annum during retirement?  (Read 6891 times)

jaysee

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One thing I like about the NZ government pension system (confusingly, for an Australian, named "superannuation") is that it isn't means-tested, unlike the Australian Age Pension.

This means it is paid out to all who are eligible regardless of how much they gain from paying jobs, investment, savings, and what other properties they own. So it's an additional income stream rather than just a safety net. If you couple an NZ pension with say a hefty stock portfolio and some bonds, you can have an extremely safe stream of retirement income, higher than what you could get from the Australian Age pension if you fail the means test.

Currently it's NZD $706.50 minimum per fortnight for singles. Apparently adjusted periodically taking into account inflation. Fully taxable. But still, not bad for a safe income stream that doesn't depend on your wealth.

Long-term, if Australians see 30+ years of inflation eroding purchasing power and stagnation in the stock/property market, while the means testing brackets stay the same, we might look enviously on our kiwi neighbours.

« Last Edit: February 18, 2024, 01:22:52 AM by jaysee »

Eco_eco

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One thing I like about the NZ government pension system (confusingly, for an Australian, named "superannuation") is that it isn't means-tested, unlike the Australian Age Pension.

This means it is paid out to all who are eligible regardless of how much they gain from paying jobs, investment, savings, and what other properties they own. So it's an additional income stream rather than just a safety net. If you couple an NZ pension with say a hefty stock portfolio and some bonds, you can have an extremely safe stream of retirement income, higher than what you could get from the Australian Age pension if you fail the means test.

Currently it's NZD $706.50 minimum per fortnight for singles. Apparently adjusted periodically taking into account inflation. Fully taxable. But still, not bad for a safe income stream that doesn't depend on your wealth.

Long-term, if Australians see 30+ years of inflation eroding purchasing power and stagnation in the stock/property market, while the means testing brackets stay the same, we might look enviously on our kiwi neighbours.

Our national pension / superannuation is a national treasure. Although, like everything, it is a bit of a mixed blessing. It achieves well its overall aim of ensuring people are not living in poverty in their old age. But it is highly reliant on people owning their own home in their retirement years - which is less likely as time goes on, and it has tended to mean as a nation we have put off retirement savings in favour of housing. A lot of people's retirement plan is 'sell the big family home and live in a smaller place off super'. This doesn't work so well if it turns out you want to keep the family home after all.

The perfect set up would be our national benefit from age 65 coupled with Australia's tax deferred super schemes.

However, our government likes the tax revenue it gets from ever increasing KiwiSaver accounts so I don't see these going tax free anytime soon.