I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
I agree with 66.66666% of your feed. But age pension if you can get, get it. I have worked all my life and do deserve some of my taxes back. Unfortunately my financial planner has i will never be eligible to receive due to my position 😮
The age pension is not a direct return of income tax and to think otherwise shows a fair bit of entitlement. It's a government benefit designed to provide financial support to Australians in retirement who need it most. If you don't qualify then that means you have done more than enough to live comfortably without government assistance. Reinvest into the future not the past. Our young people need the most help.
So you have 900.000 in super 300.00 insavings growth intrest then you don't get a pesion after busting your arse for 55 years and the muppets in parliment clean up after ??? years
Aged pension is irrelevant if you have a million in retirement. The government owes you nothing. Tax is taken to share with those that need it, not fill up the accounts of those that have worked the longest.
For me option 4 (see below). I have this amount in a super account that i use gor for a casual job and buy insurance. It has an option for a members directed shares that is $200/year which is very reasonable BUT the drawback is limited choice of shares on ASX. No individual stocks on Nasqad for example. No bitcoin etf. Capped 50% allocation to high growth asset fund. Very risk adverse😢. If only 10k it needs lots of opportunity for up side. A SMSF have annual costs of $4-5k per year so needs a substantial amount to warrant it but if have property it that is likely. We sold property and have bought 5 riskier shares with 5 year runway (with two already showing upside that im considering taking a part profit to open up additional avenue potential (need a hundred stocks to sell covered calls in US stocks) revenues. Anyway, option 4 is to use 10k to pay capital gains taxes in SMSF. If I'm really lucky we will need to pay unrealised capital gains tax in 2032 or 2033 in our super. That would be nice. No, really. Means our super 10x instead of 2x or zero😂. If zero then it is So So Security i hope - but hope is not a good strategy.
Why not invest in 9% of 15% wouldn’t that be better I think more realistically you should cal about 6% But hold on better take of inflation say 3% So let’s try for 3% And I think that’s optimistic
ASFA’s standard is a (decent, debt free, home owning, 67+yo) guide. Some commenters seem to have missed that. I totally agree that each person should audit their own financial life and prepare their own personalised budget for the retirement life that they want to live. For example, I run two motorcycles and a car… I expect to keep those in retirement, and I intend to retire at my preservation age, so I need a higher balance in the base case. This is why personalised advice is important.
Thank you. Might have not articulated it clearly enough but yes this retirement standard is a guide. Takes you from no idea to some idea and a handy reference when you are personalising your own retirement income plans (as opposed to copying it line by line).
There’s a lot to be said for spending bigger in the earlier retirement years, with spending reducing as you age. Forget health insurance, it's a rip off, look after yourself and use Medicare for most, perhaps pay for some minor but important procedures privately, but get it overseas.
Thanks for this video. Greatly appreciated. I think the ASFA data is a little skewed as it tends to assume a flat spend profile. I would argue your greatest spend will happen earlier in retirement than later. As you age no doubt more on health care and less on the luxuries (if that makes sense)............
Absolutely true. Very hard to predict a flat line of spending in or outside of retirement. One interesting way I've seen to consider spending is by aligning it with investment returns - eg. If markets go up your spending goes up. Here's an article from Vanguard that talks to it advisors.vanguard.com/insights/article/show-clients-that-yes-they-can-spend-more-in-retirement
As someone who's been using it since the month it launched in 2016, I feel one of the best aspects of it is that it keeps adding features and evolving so it's completely enhanced from where it was in its early days. I've thought it was great long before Raiz Plus or ETFs or ASX stocks were even added. Looking forward to what it adds next.
Nice take on this but your forgot THE fundamental factor is determining how much you'll need - Inflation. You mentioned inflation as a factor once you retire but that's not the most important issue. You need to know how much you'll need to retire on, but all the figures you gave are in today's dollars. Australia has a historical average of 4.88 percent inflation so if you need $595,000 today to have an annual income of $51,600, it's a VERY different amount you'll need in 10 or 20 years. To have the equivalent buying power of $595K after 10 years of inflation requires $958,000 to give an annual income of $83,095. In 20 years that jumps to needing $1.54 million for an annual income of $133,814. Now of course that's using the inflation rate of 4.88% which historically may have been skewed by house prices but the fundamental point is still there. To work out how much you'll need in the future you NEED to factor in the rising cost of living which is equivalent to inflation's compounding erosion of your retirement savings. Not one financial channel I've seen here does this as a fundamental.
Yep, inflation is a factor but how fundamental it is depending on when you want to retire. If it's soon, you don't need to worry as much, but if it's far off, like 10 or 20 years, then of course inflation matters more. But then if that's all you focus on then it might overshadow other crucial factors like personal lifestyle choices, healthcare expenses, and unforeseen events which can significantly impact your retirement needs. Everything will be a different price in 20 years and then there are things you are not even spending money on today you'll need to cover and vice versa. I personally avoid mapping out my long-term plans 10-20 years ahead as none of the big financial moves I've made up to this point were able to be predicted that far in advance. Back to inflation though and to me the best way I like to take it out of the equation is to make put money into things that usually do better than inflation. Superannuation is a good example of this where money is more likely to be invested in the stock market. The Aus market has provided on average 7.9% a year in 'real returns' since 1900 so confident in it outpacing inflation and protecting wealth but of course diversification is key.
@@dadinvestorYes super is generally outpacing inflation but the critical point is by how much? 7.9% minus inflation is 3.0%. How many people work their figures using a 3% return? The question of this video is “How much do I need to retire?” If you think taking account of inflation is an “of course” that pretty much applies to every single expense you categorised “Well, of course”. I think you could guarantee that 99% of people thinking of a figure they need for retirement have no clue how much of an impact inflation has.
Note the figure of 7.9% is a "real return" meaning inflation was taken out already from the nominal average return rate of 11.7%, using the 3.8% inflation average since 1900 rather than the 4.88% average from 1951. Knowing what I know and working with people who retire, I can agree that barely anyone takes into account the impact of inflation, but it doesn't become an overwhelming factor until they stop holding assets that outpace the growth of inflation.
Thanks for making the video. Would be great if you could also recommend a good retirement planner/calculator to estimate the amount you would need in super to sustain your income. Moneysmart's retirement planner is a bit too simpel (e.g. it doesn't allow you to adjust your income later in life when you might not have the same expenses).
Most of the big super funds have them build for their sites, but this one from Mercer is a good one supercalcs.com.au/ although I don't think you can adjust income at stages, but still will give you a good indication of how long money will last and what your spending could be long term.
I'm skeptical of that standard. I think they trot that out to make the super process seem functional for normal people. Truth is, nobody I know has a household income of that level and thinks it's comfortable. The average full time salary for one person is closer to 100k - and listen to the cries of how households (often with two of those salaries) are struggling with the cost of living. Studies on what retirees actually spend aren't that helpful as they spend proportionate to their income. If normal super returns work for ordinary people, then why do politicians, with very large incomes, need extra when they retire? I think a lot of Australians are in for a terrible shock in retirement, especially as the next generation comes through with no house to speak of. Reform is needed.
No one ever thinks they have enough. We always want more. The retirees or aspiring retirees I talk to most own their own home and that + super + general savings + aged pension are a powerful combination. The first thing though is yes to have a home and if thats not something you have on the verge of retirement it can become a challenge, but not impossible, do to the systematic advantages that homeowners have in pension phase. On the specific numbers I shared from ASFA - these are just a reference point. I don't think I've personally ever had the exact same income two years in a row so would hope that other viewers can consider the fact that a guide like this isnt a prediction of the next 20 years.
The average wage is not a good measure as it is skewed by a small number of very high incomes. The median full-time income (about $65,000) is more representative. (The median is the amount that 50% of people get less and 50% of people get more.)
@@djdownie3 I would probably have said the same once. I held mid to high managerial level jobs for much of my life and had no idea how modestly most peopled were paid. After retirement I did some part time jobs for interest, based on hobbies I had previously. If I had worked any of those full time they would have paid around $60K.
I actually do! Let's connect and lock in a price asap. If you want the music free version, it's here. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-ZCpAg-_iEyk.html
Retired to a new town and what a bloody mistake by going to Centline because being honest I lost $482.80 pre fortnight reducing from $1,116.30 and only receiving $643.80 . But if I had a family trust fund I would receive the full amount of $1,116.30. So from $29,023.80 annual it has been reduced to $16,465.80 . AND ask you can see a very percentage of taxes are given millions of dollars annually to aborigines, and they expect what ever want. Even better than pensioners who are on full pension and are struggling to get get by. This is the work of the Labor party.
Depends on the platform, but if they are based in Australia (like Stake) some require you to transfer from an Australian account, or not a USD to USD transfer. The way I've done it in the past is basically transfer money via regular transfer using BSB/Acc no but Stake also allows credit card debit and Google Pay. You'd have to check with the platforms you are looking at first.
Thanks for watching and will consider. This is my first real video primarily on tax, but I do touch on carry forward and contribution caps in this video on contributing to super ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-vDjbl4Dhvko.html
Sure, so this would be a mix of tax efficiencies and strategies. Didn't include these as they aren't directly "offered" by the ATO, but here's my take. Offset account - A for me in terms of a risk-free savings if you are ranking tax effective opportunities Debt recycling - this crosses over into gearing a bit and if done well it could be S but also an advanced strategy so could be A or B. Haven't got into it personally but may in the future.
Great questions - Personally I do both but have IOO not VGS, so I am about 50/50 at the moment IOO and Us Stocks via Stake. Make sure you watch this video as well to understand that what you pick isn't nearly as powerful as actually putting your marketing in the stock market in the first place - ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-gjwpBlI6_4Q.html Here's my rundown of both though for you. VGS is great if you want something easy with lots of different stocks in one go, though you pay a small fee and can't pick specific stocks. US stocks are good if you like picking your own and aiming for higher gains, but be ready for more costs, more work, and dealing with currency changes. Your choice depends on how hands-on you want to be and how much risk you’re comfortable with. VGS Pros Diversification Easy Cheaper AUD Traded Cons Less Control US Stocks Directly Pros Pick exactly which stocks you want. Chance to earn more if your picks do well. No Management Fees Cons More fees with multiple trades. Increased Risk Dealing with USD to AUD conversions. More work to manage your portfolio.
Thanks for the info. Can l ask if superannuation is in pension phase then when 67 and applying for age pension is it considered an asset or income stream or both? Cheers
When you reach the age of 67 and apply for the Age Pension, your superannuation can be assessed as both an asset and an income stream, depending on how it is being accessed. The government uses both tests, and the one that results in the lower Age Pension payment is the one that will apply.
I'm a self funded retiree. I'm disillusioned by the whole process to be honest. It seems that the more you have in super, assets etc, then the more the government wants to screw you. Even when i die, the beneficiaries of my will who are not dependants will be slugged 15% tax on any monies they receive. The system does not cater for self funded retirees, instead it penalises them.
Michele, you need to talk to your fund adviser, they can shuffle your super around so that when you pass your kids will get the whole amount that is left in your fund account, it’s legal money laundering, it is quite simple, talk to your fund adviser, I have done it, everyone should, I don’t know why your adviser didn’t do it for you?🇦🇺
Unfortunately every investment advisor keeps misleading people. They do Not inform people of the real value of the pension. ,ie,How much in super you have to have to get the same guaranteed return to match the pension. I challenge any advisor to show that i and others wouldnt be better off having less assets and getting full or part pension than having some assets and getting No pension.
Great informative video (well done!!). I’ve been lucky enough to work in the Wealth Management/Financial Services Industry for approximately 26 years and in that time, I have learnt a lot and between my wife, we plan to retire on approximately $870,000 pa, using a combination of both our Superannuation, as well as income from our investment property, direct shares, ETF’s and Managed Funds. Some people may say that is a high number to aim for, however, the higher the better in my opinion.
Absolutely. Very few people know what enough is but the more the better and then you can have all the control over what to do with it. Thanks for sharing.
I'm looking for some guidance since this news has left me very upset, after spending all my working life in Australia 40 years, and paying tax, I am having to relocate to the UK for personal reasons (I will be 58) so when I get to retirement age Australia will not provide me with a pension!!! All because of the Social Security Act between Australia and the UK being cancelled in 2001 (disagreement over indexing UK pensions in Australia!!!) Truly a disgrace (and no there is no pension from the UK side - since no payments went into the National Insurance NI- scheme) how convenient for the Australian government.
Not looking to squeeze anything out of the govt, but the govt is always trying to squeeze more out of us, and superannuation is in their sights!!!! Now looking to tax unrealised gains on balances over $3M is nothing but robbery.
To be clear this is a proposal that is looking to increase the tax from the current 15% to 30%. Also it is a just a proposal that unlike anything seen in recent history, and would be a complicated thing to manage for funds, government and fund members. The Teals are already against it and could be that it never eventuates.
Most people that lived life in their younger working years (4 decades) would have half or less than half of what ASPA recommends. I’m sure that ASPA’s recommendation is to support the Governments argument to have as many self funded retirees as possible. My thoughts are that the aged pension should directly reflect the contributions made by an individual, if you worked 45 years and paid tax you are entitled to a full aged pension, anything less then start reducing the payment amount.
Your information on the required superannuation balances is incorrect. ASFA DOES assume age pension will be used. $70k on 690 super would have to earn more than 8% over and above inflation to last a bit under 20 years. It's a bit scary to think that you believe 690k can give a prolonged income of 70k per year
In case I wasn't clear, the assumption is that the retiree will draw down all their capital (super, savings or otherwise) and receive a part Age Pension from age 67. Savings required for a comfortable retirement at age 67 Couple $690,000 Single $595,000 All figures in today’s dollars using 2.75% AWE as a deflator and an assumed investment earning rate of 6 per cent. The fact that the same savings are required for both couples and singles reflects the impact of receiving the Age Pension. The lump sum estimates prepared by ASFA take into account the receipt of the Age Pension both immediately and into the future. The Age Pension is adjusted regularly by either the increase in the CPI or by a measure of wages growth, whichever is higher. The ASFA lump sum figures are therefore not updated quarterly. Source: www.superannuation.asn.au/resources/retirement-standard/
Also note that the 70k per year isnt taken entirely from the $690k in savings or superannuation but includes the amount provided as per your age pension. The max rate for a couple at the moment is around 39k per year so your super/savings are only reducing by 31k per year or so which is below the earnings expectation of a 690k balance earning 6% pa.
If you’re under 45 now you need to consider the age pension will not look the same in 20 years time. You’ll need to be 70 or perhaps older to access the age pension and have very limited assets. The age pension will be more a safety net rather than a source of retirement income as it is now. This is why mandatory superannuation contributions have increased and will continue to increase. Empowering yourself to be fully self funded is the goal.
