Retirement: are you living a rich lifestyle?

Australian households are getting richer, but are we better off?

rich older man

The release of the annual Household, Income and Labour Dynamics in Australia (HILDA) report last week apparently told us something that we may not already know – we’re getting richer.

However, despite average household incomes growing by $18,000 between 2001 and 2014, expectations of ‘essential items’ may be making us feel poorer. Medical treatment is, quite rightly, considered an essential by 99.7 per cent of the 17,000 people whose data is collated. What you may find surprising is that 56 per cent consider a car essential and 45 per cent believe a television is required to live a comfortable lifestyle.

A telephone, either mobile or landline is considered essential by 84 per cent, and 79 per cent believe a washing machine makes life bearable.

Perhaps, as YourLifeChoices reported last week, this is partly why homeownership in Australia decreased by 3.5 per cent during the same period. What is interesting to note is that Australian couples over 65 who own their own home have experienced the greatest increase in net wealth – almost 70 per cent – over the 13-year period.

So, while on paper it may seem as though we’re getting richer, the reality is that we’re more likely to live pay to pay and a growing number of households can’t cover the real essentials. When it comes to having savings of $500 to cover emergencies, 12 per cent don’t, eight per cent can't afford to insure the contents of their homes, and five per cent can’t afford dental treatment when needed.

On a plus note, the introduction of compulsory superannuation has finally started to have a positive effect on the long-term wealth of households, with 85 per cent reported as having a super fund, which is considered the second-most important asset, after the family home.

Read the HILDA full report
Read more at News.com.au
Read more at Probonoaustralia.com.au

Opinion: The reality of being richer

The one major plus point of the data collected for the HILDA report is that it has tracked the same 17,000 people over the 13 years, but does it really reflect what’s going on in households across the land?

The one figure that I note with interest in the HILDA data is that relative poverty – where people lack the minimum amount of annual income to maintain an average standard of living – is $22,752 (as at 2014). Assuming a small increase over the last two years, rounding it up to $23,000, this is more than the single full Age Pension of $22,721.

This $22,721 is all that many retirees have to live on – that’s food, health, transport, household expenses, utilities, communication, insurance and all the other bills and expenses that need to be covered. According to the Association of Superannuation funds of Australia (ASFA) Retirement Standard, covering the essentials for someone who is considered to be living a ‘modest lifestyle’ in retirement would take $23,651. That’s $930 more than a full Age Pension and $651 over our assumed poverty line.

But there are two problems with benchmarking our household income and expenditure to either of these figures – the assumption that people own their own homes and have no debt and that you can actually secure the services quoted in the ASFA Retirement Standard for the rates provided.

A survey by ING Direct in 2015 found that thousands of Australians aged between 65 and 80 owed an average of $158,500 on their mortgages. The ASFA Retirement Standard makes no allowance for repaying a mortgage or covering credit card debt. And can anyone honestly say that they are able to contain health costs, including health insurance and medicines to $33.53 per week?

Obviously many of the studies, surveys and standards we refer to work in averages and there are certain assumptions that must be made. But the reality remains – living on the Age Pension is nigh on impossible.

What about you? Do you feel richer? Are you managing on a full Age Pension? Do you find yourself struggling to make ends meet? Do you think studies such as HILDA have any value?

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    COMMENTS

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    John
    25th Jul 2016
    10:02am
    Lock the always on about putting the age pension let's start cooking the MPs pension which works out to about 250,000 a year for the rest of the life's isn't that a fucking job +12 free flights I got knows what else the bastards are getting absolutely a disgrace if I could get into parliament I would cook the MPs pension by three quarters woman that serve the country a lot of money stop all three flights for MPs in retirement would that save a lot of money I would stop all chauffeur driven car to Parliament I'm get the MPs to drive the cells to work will not save a lot of money
    ex PS
    30th Jul 2016
    4:20pm
    I don't mind politicians getting a decent wage, but they should go through appraisals annually in order to establish value for money and salaries should be adjusted according to performance.
    Performance should be judged on services to the voters not on how good the individual is on towing the party line.
    Grateful
    25th Jul 2016
    10:15am
    "Australian couples over 65 who own their own home have experienced the greatest increase in net wealth". I bet THAT'S the line the pollies will use to continue to ignore the oldies, AGAIN..
    MICK
    25th Jul 2016
    11:13am
    The devil is always in the detail. You can't eat the increase in value of your house...unless you sell it and become homeless.
    Wstaton
    25th Jul 2016
    1:47pm
    Even if that is the case it is now poo poo as with all the negative gearing and stuff that has raised the cost of buying houses to an impossible level will mean when our current youngsters reach 65 there will be a huge surge of people not owning their homes.
    Rae
    25th Jul 2016
    1:53pm
    I wonder what percentage of the HILDA group were forced to sell up to pay the ridiculous bonds due to the aged care industry being the only business unable to build and maintain hostels and pay minimum wage staff.
    Anonymous
    25th Jul 2016
    2:47pm
    Mick - you can eat your house quite simply - it's called a reverse mortgage.

    Wstaton - I believe that house prices are an aberration - nothing, but nothing goes up forever - despite governments and real estate agents.

    Houses will eventually revert to their mean price - which is lower, not higher.
    Wstaton
    25th Jul 2016
    3:34pm
    Reasons,

    House price increases may slow down. But I have never seen them reduce.

    With current inflation very low and cost of living staying static and wage increases the same then no one can catch up to these monstrous increases.

    The average increase of housing across the major cities was 11.4% in the year ending 2015. The 3 months ending June 2016 the increase was 3.6% making this a possible 14.4% over the year.

    Yes the rate may eventually slow down or even stop but will houses go down. Investors will just stop selling waiting for the market to move. What this then will cause is a lack of stock which in the end will maintain prices but reduce , never!

    Also what a lot of people fail to see is because of these prices (which is mainly in the land not the house) is dead money. Young couples who have to pay more than they would have if the house price increases had stayed reasonable would have had 200 - $300k extra to spend in the economy creating jobs. But no, it is instead dead money in land doing nothing for the economy.
    Wstaton
    25th Jul 2016
    4:53pm
    I should clarify the dead money. It is actually worse than this.

    If a household has a $500,000 mortgage over 30 years @ 5.35% the total interest paid would be $505,145.20.

    If they bought the same house three years later then the price would be $650,000 (increase in housing up 30% over the last 3 years) then the interest would be $656,688.40.

    This is an extra $151,543.20.

    But they also have to pay the extra $150,000 borrowed back.
    which makes a total of $301.453.

    In comparison lets say a reasonable house price increase over the 3 years was $50,000. Extra Interest and capital payments would come to $101,027.60, compared to $301.453.

    The difference is a total of $200,515.60 that could have have been spent by these homeowners into the economy over the 30 year period.

    This is only over three years ending 2015 so it get worse and only if the interest rates stay at 5.35%.

    You can imagine what would happen if the interest rates when up to 18% when we had the recession that we had to have said by our wonderful Mr Keating. We only survived that at the time because housing affordability was only 3 times the average wage. What is it now?
    Anonymous
    25th Jul 2016
    5:30pm
    Wstaton - homes are rapidly reducing in price as we speak in Darwin, Perth and northern Queensland - and other mining related areas - and have been for some time. Rental rates are also reducing in those same areas.

    If we eventually get another recession or interest rates rise - that will accelerate defaults. We have not had a recession for over 25 years - many people consider this means we are unlikely to have one - others consider the odds are rising - as most countries get one about every 8 years.

    Houses are rising at rapid rates in Sydney and Melbourne only - 3-4 times above inflation - but average incomes are not keeping pace with inflation.

    I have seen house prices drop in the major cities in my lifetime - I have no doubt they will at some point do it again. No asset - including people's homes (which aren't really a true asset) - go up forever.
    TREBOR
    25th Jul 2016
    6:51pm
    You can't eat 'net wealth' in terms of your home, nor can you capitalise on it without reducing your living standard, especially in a rising cost market for housing to replace it....

    We (the ex for whom I'm carer and I) have down-sized from our rural acreage to a three bedroom house.... neither of us has any intention of giving up that third bedroom, since it is a necessity for visitors.

    Choice-Mobile, son - that's what it's all about.
    MICK
    25th Jul 2016
    7:15pm
    Reasons: not too sure about houses going down in value unless wages go down first. If you add the value of the block of dirt (after services provided) and the cost of construction then you pretty well what the house is worth. What one sells it for or what somebody is prepared to pay is of course something else.
    For investors a 'house' needs to make a return of around 5%. For an occupier owner a house is somewhere you live and price is more about what is affordable.
    Grateful
    26th Jul 2016
    11:01am
    Wstaton. "But I have never seen them reduce"
    Houses in Bundoora, for example, 17ks from Melbourne, fully developed, transport etc, dropped from $130K . to $116K in 1995 and that house sold for $586K in 2014.
    Kills two arguments, house price certainly do drop and be careful if there is EVER (and there will be) an interest rate rise.
    Also, that it certainly are not basic property investment fundamentals that have seen house prices like that rise over four fold in 20 years and treble in 15 years. What CAUSED that price rise??? Artificial, stimulated demand exceeding supply. And what was that artificial stimulated demand??? There's your answer.

    Asset rich and income poor retirees who own their own home have a wonderful opportunity to improve their lifestyle.
    The "market" has artificially doubled your equity in your home, i.e. you haven't busted your gut to "earn" that artificial value, and interest rates are at historic lows, you have never had it so good.
    If you own a home valued at around $600K, even less, you can directly borrow, say, $100,000, on the equity in your home at an interest rate of around 5.5%, costing you $5,500 per annum, interest only, or around $100 per week.
    Now, you can afford that $100 per week and think of the fun you can have with $100,000???
    Grateful
    25th Jul 2016
    10:15am
    "Australian couples over 65 who own their own home have experienced the greatest increase in net wealth". I bet THAT'S the line the pollies will use to continue to ignore the oldies, AGAIN..
    MICK
    25th Jul 2016
    11:14am
    That'll be the next lie to hide the growth in the gap between rich and poor...which the coalition government we have will never own up to with its class warfare agenda.
    TREBOR
    27th Jul 2016
    6:55pm
    Many people who managed to own a home in retirement have been relatively poor all their lives - now because they own a home they struggled to pay for, they are suddenly 'rich'?

    One of my past lady friends raised three kids on her own and owns her own home after working years in part-time. I'd hardly call her 'rich' at the moment for living in the modest house she worked hard to pay off.
    ex PS
    30th Jul 2016
    4:14pm
    I tried to pay for some groceries the other day by putting my porch light on the counter as payment, guess what, they wouldn't accept it.
    Next time I might try using the carpets they aren't worn too much.

    25th Jul 2016
    10:27am
    A full pension is a livable rate if you own your own home. You sure don't get to cut loose and live it up, but it does what it is designed to do - ensure you don't starve, pay your bills and live a basic lifestyle.

    If you have a mortgage once you retire, are on a pension, and don't have any further assets - it seems pretty obvious you should not have retired and failed to get any financial advice.
    TREBOR
    25th Jul 2016
    6:53pm
    What about those with no choice but to retire? Not many businesses are prepared to put on a Brokeback Brickie as a computer nerd ......
    MICK
    25th Jul 2016
    7:17pm
    Yeah Reasons. Enough to survive....which is all the pension was ever meant to do. Sadly this government is trying its best to deny Australians a pension unless they are poverty stricken.
    worker
    25th Jul 2016
    10:38am
    I believe one could manage if they received the same form of life time pensions and other perks we the Australian citizens hand out to how employee members of parliament's after they have left how employment.
    what other former employees whin how nation get after but a few years of employment life long forms of pensions and other perks after leaving said employment.
    Do the former GMH,ford employeeesget get such payments for life.if not why not
    TREBOR
    26th Jul 2016
    10:55am
    Yes - if politicians received the same treatment they'd be dying in the streets in droves.... no way could they sustain that lifestyle and survive.

    All of which shows exactly what they are made of... and it ain't nice.
    Tom Tank
    25th Jul 2016
    10:47am
    We are rapidly reaching the stage similar to the U.S. where the average person only needs to have an illness, or suffer an accident,to be plunged into a serious financial crisis.
    Fortunately we are not there yet as we still do have Medicare but if still in the workforce and the income stops!!!
    The disparity between rich and poor is growing and will soon reach the stage of the UK and the US and we can all see what is happening in those countries where the ordinary person feels quite dispossessed. This is also reflected in the Politicians retirement benefits which are ludicrous and should be brought into line with community expectations and certainly should only be paid on reaching retirement age and be means tested.
    MICK
    25th Jul 2016
    11:17am
    That is what this government has been all about since Abbott was elected. Pushing wages and conditions down and bringing new taxes for average Australians is the way they will fund big tax cuts for the rich.
    TREBOR
    25th Jul 2016
    6:57pm
    .. and (uses that to emphasise point regardless of what the kid marker at UNE said, even though I quoted the New England Journal of Medicine as using the same emphasis point in writing)... AND.. Turnbull is no different in reality....

    Just another party hack who, despite his personal millions, has no real balls to stand up to the Far Right thugs in that party..... now YTShaitan should he be 'worried' about losing his PM spot for standing up for what counts? It's not as if he needs the work, the income or whatever... only the 'status' of being among the most despised in the country at this time.....

    No balls....
    MICK
    25th Jul 2016
    7:20pm
    Turnbull is a great disappointment. So much promise and shown to be such a nasty, lying spiteful man.
    Dare I say the next shameful leader of the coalition. Where do we get Australians like this from.
    Wstaton
    25th Jul 2016
    10:46pm
    Probably from the same ilk who brutalize kids in youth detention centres. They don't even treat the die hard adult criminals like that.
    CarolAT
    25th Jul 2016
    11:01am
    It is of course a complete furphy that over 65s have the greatest wealth. On paper yes due to the fact that the home where they have resided for perhaps 30 years is now in 'a desirable location' especially as a negatively geared investment property for the upper crust. It's the same old fibro with a little gas heater in the kitchen. However, as a saleable item it's value is now over a million. There have been many calls for the elderly to be forced to sell, however I ask - and move to where? Anywhere with transport, close to doctors, close to the elderly citz and the price is the same. Move into a retirement village. Again where? Unless the government is prepared to invest heavily in social housing then people will continue to live in acute poverty. But of course this would effect the value of their many negatively geared investment properties, so they won't do it.
    MICK
    25th Jul 2016
    11:18am
    Home value are up but you can't eat that or use that for spending unless you sell. So where is the increase in wealth other than on paper?
    MICK
    25th Jul 2016
    11:09am
    You know the old saying: "lies, damned lies...and statistics".
    Reports come and go but the content of reports is often biased and unfactual choosing to avoid the unpalatable bits.
    Let's go. You state that the average income has risen by $18,000 since 2001. The average income in 2001 was around $680 whilst in 2016 it was $1146. So the increase as a percentage was about 70%.
    Any body who buys fuel or food or pays rent understands that these have increased a lot more than 70% over that period.
    Perhaps the HILDA report is talking about the top end of society becoming richer or talking about those who own their own home. We all know that the DIVIDE between rich and poor has been growing at an alarming rate and that the current government wants this to increase much more.
    In terms of DISPOSABLE income, the amount left after all bills and expenses are paid, the claim that we are "richer" is nonsense.
    My question is WHO COMMISSIONED THE HILDA REPORT?
    Polly Esther
    25th Jul 2016
    11:39am
    It matters not what HILDA says, my purse is still breeding moths. Smile through it all :-)
    TREBOR
    27th Jul 2016
    6:59pm
    I stopped at at an RSL last night rather than face the traffic home after a long day - hit a jackpot equivalent to a fortnight's pension... goes to a shower for the under renovation bathroom so the disabled ex I am carer for can have it easier......

    Yeah - I'm rich..... place might be worth $300k after I finish the renos...... but who could afford to rent?

    25th Jul 2016
    11:40am
    I think that those of us who are now retired have a huge advantage over the current generations; we know how to budget. I claim this because us retirees grew up with a pay packet stuffed (just kidding) with cash and all you got was all you had. Banking was different back then as people banked money to cover commitments and lived off the balance. When the cash ran out we didn't have any plastic to fill gaps and we stayed at home until next payday.
    Travellersjoy
    25th Jul 2016
    1:13pm
    Thank you for drawing attention to the fallacies of 'averages'.

    Most older people in poverty are single women who rarely had access to superannuation, or decent jobs and wages. Not an average.

    Most rich people are of all ages, and are privileged by government policies on superannuation, negative gearing, capital gains, family trusts, and other wealth capture/creation and preservation exercises, actively promoted by the LNP.

    Their game is to capture money 'wasted' on disadvantaged groups so they can redirect it to 'productive' groups ie their own families and best friends. If you are in doubt about their integrity or intentions, read about the latest rorts of MPs allowances and privileges.

    The fact is we are governed by rank hypocrits - and thousands still voted for them. Frogs in the pot have nothing on so called conservative Australians. They will be cooked before they notice.

    To live on only the age pension, even owning a home, means being unable to maintain the home as it falls down around us. Of course, that means one of the LNP beneficiaries can snap it up at rock bottom prices and make a motza redeveloping or renovating.

    Why does the centre or left of politics seem incapable of developing policies to address these real world issues?
    TREBOR
    25th Jul 2016
    7:05pm
    The centre and left don't want to develop those policies TJ - they are in the same conga line.... we have no genuine government of the people, by the people, and for the people here....
    particolor
    25th Jul 2016
    2:04pm
    I want $120 a fortnight Increase now Turnbull !! Ya hear me ?? :-( :-(
    particolor
    25th Jul 2016
    2:18pm
    PS... And $50 of that will be Stolen Immediately by the State Government for which they had no Input ?? Even the Pensioner Electricity Subsidy has been Stolen by Baird !! :-( :-( I would be Happy to swap a year with a Politician, just to catch up on the Mingy Pension "Rises" handed out 6 Monthly for the last 3 Years ! I cant live on Witchetty Grubs and Stinging Nettles and Roast Goanna on Sundays any longer :-( :-( :-(
    PSS...:-( :-( :-( :-(
    Anonymous
    25th Jul 2016
    3:41pm
    When you speak of the Pensioner Electricity Subsidy, is that different from the NSW Government Household Rebate? I understand that the Federal Government reduced some payments to the states from which the states gave pensioners subsidies for utilities and travel but the NSW Government stated that they would continue with the subsidies.
    particolor
    25th Jul 2016
    4:50pm
    Well they Lied as Usual !! I noticed it had Disappeared off my bill and went down and Enquired about it a Year back. "Its been Discontinued" Said the Nice Man :-( I left muttering "F Libs" !! :-) :-)
    Anonymous
    25th Jul 2016
    5:24pm
    It's still on my bill with Energy Australia which is due 26/7.
    particolor
    25th Jul 2016
    5:34pm
    I was getting a NSW State Subsidy from HAAC ! And its Gone Now DISCONTINUED ! EVAPORATED !! Thanks Mr Beard :-(
    MICK
    25th Jul 2016
    7:22pm
    "Get yourself some rich parents".
    particolor
    25th Jul 2016
    7:56pm
    Ive got them ! But we haven't talked in 46 years :-) :-) Pop was an OGRE !! :-) :-)
    Wstaton
    25th Jul 2016
    10:48pm
    Or get a better job that pays more and remember you don't drive a car.
    MD
    25th Jul 2016
    3:09pm
    I'd like tell a story - along the lines of; Ripley's 'Believe it or not', or for those that remember the radio series of John Doremus - 'The Passing Parade', an age clue no less.

    In early 2002 a married (hetero) couple, both self employed for the bulk of their working lives prior to this and then in their early 50's were literally homeless, this as a result of a number of issues; poor business acumen, wrong decisions and greedy landlord/business partners. Although they owed nobody it was small consolation in that they then found themselves < $3K shy of destitution. The contents of their home having been dispatched prepaid to another state, they followed shortly thereafter in their unencumbered 5yo vehicle. The decision of which state was made easier due to the following two factors, firstly (at the time) the chosen state was considered one of the cheapest re cost of living. Secondly, resident relatives guaranteed them some means of temporary accommodation. They briefly stayed in two homes, about a week in each and thereafter moved to caravan park accommodation. Almost immediately the husband, in responding to a local print 'situation vacant' advert, scored temporary machine operator work. Some months thereafter, both husband/wife intermittently picked up piece work and/or temp positions till eventually both landed casual/part time permanent employment. The wifes' dedication at casual work finally scored her a full time permanent position in local industry, the husband meanwhile moved through a couple of jobs to likewise finally realize part time permanent work located some 30 klms from a house they'd rented in the interim. Their wages at the time were considerably less than Australian average. Fortunately for them, when the landlord sold the rental property thereby' requiring them to move, they had saved the bare minimum deposit required to purchase a humble home with a 30 year bank loan. The purchase was made at a time of inflated RE values and with interest rates a good deal higher than present. Coupled with interest rates was a Bank 'premium' charge (due to their limited employable years) plus the requirement for 'mortgage insurance' - some thousands of $. Their respective workplace then being in opposite directions and not wanting to further impose on the goodwill of workmates, they purchased a cheap second vehicle.
    Within a few years and when the engine 'died' in the 'cheapy,' they had saved just enough to replace it with a new (and then) cheapest, small two door. At that time they decided to 'dedicate' the husbands entire wage to house payments. Within the next five years the original car then nigh on 15 yrs old, had developed both mechanical and body problems requiring sporadic workshop attention. They sold this privately for slightly less that the $ they had in hand at the commencement of their 'second innings' life and drew down against credit balance held in the home loan account to purchase a new replacement vehicle.
    Now, some 14 years later, at this point in their lives and having virtually started out anew, their home is owned freehold, they own both vehicles and hold a meagre bank deposit.Their limited years working for employers has confined super accumulation to the minimum: earlier small self employment amounts were eroded by industry players.
    The husband retired from the workforce almost at the same time as the final payment was made on their home, he has since then worked locally - averaging 4-5 hrs week. I'm told his returns barely cover the weeks groceries. The wife's current wage has this year only just matched the 'Australian average wage' yet this couple continue to enjoy a satisfying/fulfilling life with added bonus of the odd flight interstate to visit their kids/grandkids plus annual drive there for Xmas cheer.
    The added overarching bonus to this entirely positive story being that they now have a <$150K CR balance on their home loan which they can draw down against for any (bank approved) purpose at any time within the next ? years. Fate aside.

    Which brings me to a summary conclusion: HILDA Report ? As the story I've told relates to much the same period as said report, then compared to this couple in isolation where did the bulk of the population miss out ? Define "Essential items" - for starters most folk rate vehicles as such. Poor folk don't have $500 set aside to cover "Emergencies" - something doesn't ring at all true. "Super - (is an asset)" highly questionable given abysmal industry standards and in my own case I can verify by my past accounts (that no longer exist) & I don't have anything to show for them. "Credit card debt" - The banks ARE NOT to blame. If you put a gun in the hands of most these same folk (that have blown their CR balance & then some) it doesn't follow that they will likewise blow their own brains out.
    For the folk finding it difficult "living on the pension" then using the same generalizations/assumptions from Report findings then some few need to seriously consider re-evaluating their lives and values. Standards and thereby people's expectations are a matter of perception and most make the mistake of perceiving everyone else to be better off -therefore I'm (they're) a victim. The pension is a safety net (repeated ad nauseum) & is/will be required by ever increasing numbers. Either folk learn to live within the stricture of the pension and be thankful or determine their own means to address their perceived shortfall.
    As to whether (I think) HILDA has value is irrelavant, maybe the question should be - whether they are relevant ?
    Old Geezer
    25th Jul 2016
    3:54pm
    That reminds me a young lady who came to see me a couple of weeks ago saying they were just making ends meet even though they were both working. She had written out all their expenditure and on first glance I shook my heads. $500 a month on mobiles and internet. I ask why so much and she said well we need to talk to one another.
    Sceptic
    25th Jul 2016
    3:57pm
    If people between 65 and 80 owe, on average, $158,500, on their home, then they chose not to pay out their mortgage. If they also have a credit card debt, that hasn't been paid before they retire, they have, again made a choice.

    As far as the outstanding mortgage is concerned, I doubt that for the majority, their first house cost anywhere near that amount, so they have continued to purchase dearer houses at mortgages they should not have undertaken.it is not right to use these as a standard measure of people living in poverty as they have clearly chosen a lifestyle path that involves debt, debt and more debt, with no prospect of ever paying back what they owe.
    bebby
    25th Jul 2016
    5:16pm
    Sceptic, ever heard of couples getting a divorce and the losing partner having to start again establishing a new life. It is entirely possible they will still have a mortgage well into their sixties.
    TREBOR
    26th Jul 2016
    12:09am
    You're looking at one.. I had it all and minimal debt.. now I'm still paying a mortgage after not one, but two asset stripping exercises involving wives. Then there was being made redundant, then injured, then sick... and treated like scum in my fifties for having the temerity to even apply for a job...

    Bring on the revolution!
    TREBOR
    25th Jul 2016
    6:48pm
    If Australia is in the top ten wealthiest nations - I dread the plight of all the rest....

    Define wealth. Then we'll talk about how it is distributed so unevenly that far too much is concentrated in the hands of far too few.
    MICK
    25th Jul 2016
    7:24pm
    Go to the land of the free. You'll be horrified. But the top end does really nicely. This is what the Abbott/Turnbull governments are trying to get going here in Oz.
    old fart
    25th Jul 2016
    7:13pm
    Its a case of living within your means
    If you have put something away in Super over at least the last 20 years before retirement,there is no reason why you can't live comfortably with the Full Age Pension & drawing a little from your Super, providing you own your own home
    If you want to travel every second week, well that's another story
    MICK
    25th Jul 2016
    7:25pm
    What's a pension? Being facetious.
    TREBOR
    25th Jul 2016
    7:45pm
    A pension is a malleable political instrument of punishment or reward, totally dependent on the government determining who and how it will be handed out as reward for fifty years before the mast, complete with floggings with the cat....

    That is clearly why Social Security funding, drawn in taxation for generations, needs to be quarantined from 'consolidated revenue' and protected from the grasping hands of politicians.

    The only solid dated part of revenue is the con.........
    Old Geezer
    25th Jul 2016
    10:06pm
    The future of the age pension.

    http://aca.nine.com.au/article.aspx?id=9097574
    TREBOR
    26th Jul 2016
    12:10am
    Oh, no - not A Current Affair.... but I'll look...
    TREBOR
    26th Jul 2016
    12:11am
    Let me re-iterate:- Bring On The Revolution!
    ex PS
    26th Jul 2016
    11:54am
    Yes, I definitely feel richer even though I am taking far less out of my Super Fund than I took as a salary.
    Reason being, I have no debt and own my own house, this is not by accident but part of a long term plan, I like thousands of of other Boomers worked hard and paid down debt so that when we retired we could live comfortably. Our plans were contingent upon the following assumptions, once we owned our houses no one could take them off us and they would reduce our cost of living, if we put aside money for our retirement and it was not sufficient to live on the government would recognise our attempts to look after ourselves and help us financially if required and we would be treated with respect and dignity by the politicians who had benefited from the taxes that we had paid over the previous decades.
    I personally feel that I have not acted in my own best interest, I should have blown every cent earned on drink, cars and entertainment and just relied on the pension and welfare housing to sustain me in my old age. I would not have been much worse off.
    old fart
    26th Jul 2016
    7:52pm
    PS
    I assume you were in a Defined Benefit Super scheme being ex PS and as such needed to pay in the appropriate amount to receive the maximum Benefit multiple

    I assume you don't receive any OAP because you are over the $823K Asset (Couple) threshold ( come 1/1/17) & over the Income Test of $292

    If that is the case, solely receiving the Full OAP of only $34k p.a. & try living off that & sustaining/maintaining a standard of living that you had come accustomed to
    ex PS
    27th Jul 2016
    6:56am
    old fart, I had most of my money in a Defined Scheme but because I salary sacrificed some of it had to be put into a market investment based scheme.
    I receive no part pension at all and my wife and I average less than $34K combined in withdrawals from our super pension funds.
    Life is easier for us because we know that if pressed we have access to substantial funds but we generally live a comfortable but modest lifestyle.
    Both being natural born planners we invested over a lifetime in options that would make retirement easier and cost effective that is why retrospective changes to retirees conditions make me so angry.
    We put extra into our house that we chose to retire in, not to hide assets but to ensure a best outcome approach to securing a good retirement.
    We put extra funds into buying a block big enough for a vegetable garden and orchard, insulating, water tanks, grey water recycle units, solar hot water, solar panels for electricity, buying in an area close to shops, hospitals and other important infrastructure. We do not pay electricity bills we get money back, we do not pay excessive water rates and we do not need air conditioners.
    In other words we have used our finances to lower the cost of living and improve our lifestyle.
    We are now being told by some that the money that we put into our house was an attempt to hide assets and that we are to be punished by having to include the value of that house as an asset in some sort of envy tax.
    As far as maintaining and sustaining a standard of living is concerned I believe I have the credentials to do so but it would be nice to think that if we stumble there will be a bit of help available for us. But it seems that the government will help those who rely on them from the start but are not interested in helping those who try to help themselves.
    retroy
    28th Jul 2016
    1:21pm
    I am definitely not richer, as we draw down on our SMSF by 5% each year but ex Ps is dead right about working hard and preparing for retirement by setting aside voluntary super contributions.
    An earlier comment about the cost of phones and internet is so valid where people spend on something that was just not around a few decades ago and we did not know any different.
    We will continue to take the odd cruise but live as we always have, fairly frugally and we should have enough to see us through without accepting any Govt hand outs.
    It was really good to see old fart being put back on the shelf, for his ill conceived lefty comments.
    *Loloften*
    27th Jul 2016
    5:23am
    It's simple...minimum wkly wage is now $672/wk per person. Age pensioners, especially if alone, stay home far more than ppl who go to work & as the old saying goes "two can live as cheaply as one" altho' I'm not suggesting that. I'm suggesting that elec/gas (if lucky enough to have heating & cooling, & "skimp" on them); council rates + home/contents insurance (if lucky enough to own home outright); all home & appliance repairs etc are approx the same as a couple. Food can be bought cheaper in bulk & cooked @ approx same cost in bigger pans. Extra costs for a pensioner couple would be - additional water usuage; perhaps running 2 cars instead of one; couple Health Insurance + Medical costs & few more $$s for food. Suggesting addition for couples to that minimum wkly wage of (say) 30% to cover above extra costs & 35% if own & use 2 cars. How on earth is a single age pensioner expected to live on 30+% less than the legislated minimum wkly wage, considering that majority of pensioners have children & their spouses/grandchildren (most I know have between 2 to 10 grandchildren, as do I) & some even have great grandchildren to buy presents for on their b/days & Christmas + very happily attend many celebratory school & sporting events? Most working ppl would also have, on average, have far less medical costs than most ppl aged 65+.
    old fart
    27th Jul 2016
    10:37am
    PS

    Why are you so intent on being so greedy

    I to have prepared for my retirement & have done most of the things you have done, Solar etc, but didn't have a high income & the luxury of a Defined Benefit Scheme not subjected to fluctuation to the share market GFC etc and as such you planned for your retirement knowing how much you would receive ( No wonder, these schemes are no longer available to new employees)

    and as far as you might stumble? is a crock, if you are only drawing $34K out of min $823K (effective 1/1/17) which would last you 20 to 25 years after which time you could then get your precious pension

    You mentioned envy tax, I thing envy Pension is more appropriate
    ex PS
    27th Jul 2016
    4:32pm
    old fart, your outlandish and seriously incorrect assumptions make your last statement in your own words a crock."
    I was made redundant three years ago and had the choice of going on the DOLE or accessing my Super, I chose to access my Super a rather silly move for someone who is greedy don't you think?
    Even if I combined my Super and my wife's it would not come close to your presumed $823K. For most of my time in the Public Service I was on lower than the average national wage and it was only in the last 5 years or so that I could afford to salary sacrifice into Super, this was a non-defined part of Super and was subject to market forces.
    My wife and I are reaping the benefits of hard work and planning, we are not envious of those who are doing better than us and do not begrudge those less fortunate than us who need to rely on government pensions.
    I do however think the lesser of those who instead of striving to improve their own circumstances seem intent on trying to drag those who they perceive as being more successful down to their level. This attitude is worse than envy and is a destroyer of national affluence.
    Anonymous
    29th Jul 2016
    8:53pm
    I agree with what you have said exPS. It is sad that people who are doing OK in retirement are envied; it is not luck it is preplanning before retirement and being frugal and setting a goal so you are not a burden to others in your later years.
    Spitfire
    29th Jul 2016
    11:50am
    We constantly hear about politicians, rorts and pensions. The point is how Grey Power can start the ball rolling to achieve the momentum for a notable rebellion to relieve these unworthy individuals of these unrealistic pensions and other perks. Unfortunately there is no point in approaching parliament as it will only fall on deaf ears. What ever happened to, ‘for the people by the people?’
    ex PS
    30th Jul 2016
    4:02pm
    Spitfire, I would like to think that by looking at the recent discussions on this forum the ball has started. Greys have demonstrated to the so called major parties that their greedy, lazy, thoughtless attitude to retirees has been noted and will not be tolerated any longer.
    We can remove their unwarranted lurks and perks simply by voting them out. Regardless of their brand we should note those who are failing us and vote against them at every opportunity, does not matter who you vote for, it is who you vote against that counts.

    29th Jul 2016
    8:50pm
    In the last 12 months I have found that with the lowering of prices in supermarkets I have money left over every fortnight. Something I did not have previously. If you shop wisely (especially when things are half price) you can definitely save money and especially if you cook from scratch
    ex PS
    30th Jul 2016
    3:56pm
    So right Pepe, so many people are caught up in a cycle of instant gratification. Just by waiting for three or four months until the latest craze is no longer the latest craze hundreds of dollars can be saved annually.
    I meet so many young women these days that will claim with pride " I don't do kitchens", pertaining to cooking meals. Young men are even worse.
    Do we blame them or does the blame go to the parents who have indulged them and have not taught them basic survival skills?
    Fair Go
    6th Aug 2016
    5:59pm
    Owned my own home in a not so affluent suburb, sold it, had enough to get into a retirement village in the same not so flash suburb, even so, with just the pension to manage on, am struggling, specially with an electricity account of over $468 to pay for a quarter, with discounts. It will now become, do I eat properly, or pay the electricity account. I worked most of my life, but on one female income, and bringing up and educating 2 boys, could not save much at all. So don't believe that everyone who owned their own house is "wealthy". I have very little as a backstop. I do live in SA which is the most expensive State when it comes to electricity and many other charges.


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