The Future of Retirement with Alan Kohler: Part Three | 7.30
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- čas přidán 13. 06. 2024
- Preparing for retirement is hard, but these days being retired can be even harder. With interest rates at an all time low and share markets volatile and expensive, retirees are having to think outside the square when it comes to their income.
Alan Kohler presents part 3 of our retirement special produced by Laura Francis and Chris Gillett.
Part One, click here: • The Future of Retireme...
Part Two, click here: • The Future of Retireme...
Part Four, click here: • The Future of Retireme...
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Hi ABC, can the full unedited interview with Paul Keating be released please.
The trouble with super is, no one knows how long they’re going to live.... Great report and excellent to see Paul Keating in it - he’s made a mighty contribution with setting up compulsory superannuation in Australia. Thanks Mr Keating.
If you retire at age 60 with 2 million and use a 3.5 percent rule you will have an income of 70,000 per year then by 70 you will need less and less again by 80 and still have a healthy super ballance.
The trick was to have saved like crazy when you where young.
@@danielparma6478 You have that 2 million? We have around 18 milion adults in Australia and around 1,180,000 have a million or more. The rest of us don't. The trick was? You have? 6.5% of the adult population have the money it looks like you say you have.
You always have the pension though and can receive part of it while topping it up with super.
Everytime I hear flexible I know I'm losing.
@@JM-hn7ju "Treasurer Scott Morrison has put ordinary Australian workers on notice that they should no longer expect to receive an age pension from the government when they retire." He said that in 2015. If you are not yet on the pension you may not get one unless you start soon.
We will all be working for life soon. Just look at other places in with super low interest rates. Singapore, Hong Kong, Japan, etc... Elderly people working at fast food joints all over the place. Collecting and picking up recyclables in the streets. It's very common. These places all have sub 1% interest with aging populations. We will be next.
Hong Kong was like that way back in 1995 when I was there.
Has nothing to do with the low interest rates.
People choose to leave superannuation balances to their children with the hope that the family will accrue wealth. They aspire to improve the lot of generations following them. The usual suspects always surface to try to whittle away the savings of average people. My first job at 15 was with Woolies. I was told by HR, joining the Union is optional, but if you don't join, no job - because the salary and benefits you will receive were achieved by the union and its members. 35 years later, I live in the US and can see the destruction caused to most lives by rampant corporate greed. The fabric of peoples lives is relentlessly picked apart by something as simple as casual employment on a 24/7 basis (20 hrs / wk, $15 / hr, be available on a changing roster 24/7, no minimum hours / no retirement / not health / no leave). Not only is there no money to live on, but there's no basis for cultivating live outside the minimum wage job that you hate. If you're sick, you're homeless, and likely mad or dead before long. That's it. Australians just have no idea what they stand to lose if they don't organize their labor.
Build generational family wealth live on the returns and pass it on... Absolutely correct Mr Keating....
god bless Keating!!!
i'm 42 and have over $200,000 in my super hope i'll be ok
Hope is not an action,
@@world7570 no
far out.... im worried with 33k at 28 LOL. sucks to start out career as an engineer with a salary of 45k and being choked by 32k of debt. Then choosing to work in Aviation and being stood down for 6 months.
Guess everyone sort of lied to me that Uni was the right path.
@@bonk945 if you only ever earn $65k a year for the rest of your working life and only ever make the minimum contributions of $6500, in a typical growth account getting 8%, you’ll end up with about todays equivalent of $1.1m. That’s enough to live on roughly $40k if you leave it invested and draw down on it every fortnight $1500 like a salary. Then you up that amount by inflation every year. It’ll last you 30-40 years at least.
If you earn $85k by the time you’re 30 and don’t earn more than that (wage keeps up with inflation), you’ll have $1.5m in todays equivalent meaning $60k tax free every year
If you upped your contributions at age 30 to $15,000, you’ll have $1.9m in todays money. Which is $76k per year tax free for 30-40 years.
I was stood down for 2 years from aviation sector through covid. Just knuckle down and take care of yourself
What really ticked me off, in regards to super, was getting no information from employers, even after requesting it and only getting letters from Super funds who I didn't know I had, demanding money.
All anyone needs be taught is that Super is like a bank account. When you start a new job, they’re going to ask “What’s your account details for your pay?” And in the money goes. Same for super: rather than just being like “I dunno” and forcing the employer to set up a new account (as they are legally obligated to), it’s just a matter of supplying the details of your existing super account, and in goes the money. Yes your bank acc and super fund are two different things but from a practical perspective, exactly the same concept.
Everyone understands the former so no excuse to not understand the latter.
But the fact they don’t only demonstrates that financial education in this country is garbage. Few people have any clue.
It’s not your employers job to manage your retirement money. Their job is just to pay in the 9.5% or whatever it ends up being.
@@rakeau Still would have been nice to have been sent a letter from the Super fund, being told who is getting my money, but all I ended up getting, was letters demanding money or I'd loose my account.
@@canlelola Getting what money? Why and how would they know who is getting said money? If you have an account with them, but open another account (either by yourself or an employer on your behalf) and future payments are made into that other account, they won’t have any knowledge of that.
Again, the concept of a bank account applies. If you had an account with Bank A, and opened an account with Bank B, and told your employer “Hey, here are my new bank details”, Bank A would not have any knowledge of that or see any transactions that might occur. Same applies for super.
At the end of the day tho, you probably did get letters. Statements. From both/all super funds you hold accounts with. That’s the best they could possibly do. Noone else’s job to put the puzzle pieces together.
Can’t think why they would be sending letters demanding payments. Accounts with low balances and no activity I think are required to be closed and the balance transferred to an “eligible rollover fund” (eg SuperTrace is one that I know of, Canstar website has a good list) and close the account. If the balance was zero, well, nothing to transfer, account should just get closed.
I think the big problem was that, for a while after Super was first launched you *couldn’t* choose your own super fund, the law basically put all the work on employers, so all employers partnered up with a fund and all employees had their accounts there, employees couldn’t elect to use an existing account. Because of this forced passivity ofcourse people ended up with multiple accounts all over the place, paying multiple fees etc and had no choice in the matter. I’m not sure if they could consolidate or not but yeh they were at the mercy of the system. I think the Govt finally fixed this up in the mid 00’s, but it’s still possible to fall into this trap.
Best thing to do is consolidate super, for sure. Good exercise in getting one’s head around how their super is structured. Everyone should manage their super accounts to this extent atleast. Why require everyone else to do it, ofcourse they’ll just stuff it up and cost you $$. If you want things done right sometimes you just gotta do it yourself.
@@rakeau When I would get a temp job, my employer would setup a superfund, however, when I asked for the details, it was never given to me and the only time I would know who I had the account with, was when I got a letter demanding money, from the superfund.
I mean think about it, how would you like a company you never knew of sending you a letter in the post, telling you to give them money or you'll loose an account, you never knew you had.
@@rakeau Yea, I think you missed my point, I do not have Super, because it was eaten up by fees and the only time I was told about the accounts, was when I got a letter in the post, demanding money.
Also, I have used the ATO's website to try and track down any lost Super, I have none.
If I could id by 3 stocks with my super and leave it forever. Its what I do with with my savings!
1. The total US Market etf 2100 companies VTS
2. Top 200 Aus companies STW
3. 1200 emerging Asian, India China companies VAE
If it fails super would fail so you literally can do any better and it will outperform super and fees are almost zero!
Nice picks! Super is such a great investment vehicle with the lowest fees and small tax rate in accumulation phase plus it’s tax free when in the pension phase! 👍
So set up an SMSF and do exactly that. My super is all VTS and VAS.
SMSF set up. Nabtrade would do it all for you
Most people are in the default option their super fund puts them in - usually between 0.5 and 1% a year in fees. This is the real scandal, and it allows the super industry to hoover 32bn in fees a year from working people. It also allows them to price their 'investments' in commercial real estate and infrastructure that are in the 'balanced'/'high growth' fund at whatever the hell they like. If everyone chose the 100% equities option the super funds would lose billions in fees overnight.
It'll be interesting to see what happens to super if we get a strong inflation.. Watching this one closely!
It would be an interesting transfer of wealth away from retirees to working age people, as increasing inflation would usually mean higher wages.
Should be taxing inheritance from superannuation given the generous tax concessions that apply. Also one way for small businesses and farmers to afford an increase to super is to stop paying it to those on working holiday visas who usually take it out when they leave and get taxed at 60%. It just doesn't make sense for these people to get paid super.
If they are not paid super then it means it’s cheaper to hire people on working holiday which would raise unemployment for Australians.
There is a 15% tax on super going to a non dependent beneficiary. Eg. Adult children.
The 15% tax however isn't applied to any part of balance that is made up of after tax contributions as this would be double taxation and effectively an estate tax which Australia doesn't have.
Why would you tax someone else’s money? It’s not your money and it’s not mine. It gets inherited by beneficiaries.
Tax rates are already too high in this country.
@@bennyl7224 Taxes are not too high. Do you understand that currently tax revenue does not match government expenditure? Clearly we need to raise more revenue.
Mining tax would have been good.. and is still a good idea rather than give them billions of dollars of tax incentives..
Lower taxes in this country are a better idea. Both income and company tax.
I sit and wonder. My job pays fairly well, currently dealing with a probate.
But a daughter has come home with her kids. The job is killing me.
My mum is only able to earn 5 grand before she starts loosing her pension and her 10+ grand a year in body corporates don't matter apparently, that is an insultingly low amount for someone who has paid tax their whole life and wants to enjoy what remains beyond what a meagre 25 grand a year pension can provide. And she is one of the lucky ones as most of her friends still have to work full time just for the privilege of existing in our modern world. The 'work hard and you will be rewarded' idea is well and truly a suckers belief created by those that actually benefit from it. The next centuries mantra will be 'work hard and you get to not live in a tent, maybe'.....
That sounds about spot on mate.
Life is a gamble.
And to the Englishman living in QLD. $472/week and your home is not means tested, is generous.
From part three,
Janet Hume, Minister for Superannuation, at 3:32 min:
"Superannuation was never meant to be an untouchable nest egg on which you only live on the income, it was always, ah there to draw down the capital as you ah um work through your retired life ... I think that we should make sure superannuation is flexible for retirees ... you know people are best placed to know how to spend their own money and when they spend their own money and it is not really a liberal philosophy to force people to make those sorts of decisions. That said, we want to make sure people have the options available to them to make to to do so effectively, to spend their retirement income as efficiently effectively as possible, so that they have a high standard of living in retirement, which of course is the aim of the system."
and from part two,
Janet Hume, Minister for Superannuation, ("who will now also take on the roll of Minister for Womens Economic security"), at 4:48 min:
"If you are talking about people tapping into their super to pay their bills, that, well, I actually don't think that that's necessarily the worst thing in the world at that time at massive financial uncertainty when people were you know loosing their jobs at such a rapid rate, ah the ability to tap into your own savings, your choice to do so, ah to spend that money on paying down your mortgage, paying off your car loan, um you know paying down debts, cutting up credit which we saw at a rate that we've never seen before last year, that's a good thing, ah but it wasn't compulsory it was their decision and I think that the coalition Governments trust Australians enough to make the best financial decisions for them and their families."
It does not look like tapping into superannuation congruent with the aim of the system.
I'm curious, the liberal and conservative philosophy, how legal aid viewed, and the view held by some, a view something along the lines, that it is not a debt for the Federal Government to take on, and, how lack of the availability to or access to justice might not possibly contribute to lowering the standard of retirement living or that of a person with medical conditions or disability before retirement?
Maybe some noble minds might be able to weigh in on the topic.
Why the hell would anyone trust anyone like Janet Hume be trusted? All she does is endorse those who give no shits about those who did the actual work. Small business and workers are screwed by politics that feathers their own nests.
How many folk ever stop to think about how unsustainable the concept of retirement is?
Its ludicrous.
Totally unrealistic going forward.
I will never retire.
If you are able then you should keep working
Well we can always copy some stuff they are doing for retirement in Singapore....
agree i like the SG system and i have CPF.... i think the medisave portion is a bit misleading though. i would like to see SG provide free medical care for all citizens (excl PR) and those who want to take private medical have the option.. for example a typical long term cancer treatment would exceed most peoples medisave CPF yet most people think they are well covered with it.. ouch!!
This is what happens when money is put before family, it should not cost to be looked after by a community you have served. I dislike the current system and we must change it. Maybe intergenerational housing?
You can hate the game, but the game keeps playing with or without you
Hey guys, news flash from the entire Gen Y.. None of us are sitting around waiting for a free house from our parents. And to the ABC do your due diligence and start reporting DEFI and the return rates on DIGITAL ASSETS such as USDT, DAI or the fact BITCOIN has gone up 200% per year every year on average for the PAST DECADE.
Do your jobs are report that please!!!
How do you talk about retirement without talking about interest rate?
Impossible to retire if you can't get a risk adjusted rate in real terms?
Are they expecting you to save the entire amount you need and eat away at your principal till there is nothing left?
They do mention interest rates.
i wont have to pass anything on to my kids as they will be making all the money, the real get rich quick
I like everything about superannuation, but not the fees. My ETFs investment are charging me peanuts for the same balance. I could end up paying 100K+ in fees over my 40 year career. We also need to force Aus superannuation companies to invest in Australia, even though returns might be lower.
3:40.... is she insane. every year people with the help of medicine and tech are living longer and she wants people to draw down their super... she is bananas. whatever, i bet her super isn't up-to-snuff with that retirement philosophy.
Most retirees will own their own home. Why is the pension not enough?
It is (with own home). Super starts from 60 though, pension is from 67.
So, it's only a problem for people who retire early?
You want to work to you drop?
I remember when Keaty brought in the Super scheme - it was so retirees would be Self-Funded and take the burden off the tax payer (was supposed to replace the aged pension). Problem is, RBA (Central Banks in general) have destroyed the economy by lowering interest rates to zero. No self funded retiree can survive unless rates are above 5%, and many lost most of their super in the GFC so. Keating had the right idea (one of the few good ideas he had) but didn't foresee the economic valdalism of the RBA (Fed - Central Banks in general).
I think it's more so to do with Capitalism. The Baby Boomer gen are used to having a paycheck coming in, and are alarmed if they are living of a limited lump sum, I can understand that psychology but it makes it hard for us young ones who've done our education and want a job, to be put alongside a boomer with 35+ years but no formal qualification, they see you as a threat.
@@joebloggs1804 Rubbish. A self funded retirees (the video is about retirement) don't work alongside younger people. When you grow up, you might understand.
it's important to understand that superannuation is purely for savings for households. Super doesn't take the burden off the tax payer since the reduction in the pension expense is offset by the loss of tax revenue from the lower taxed money into super accounts.
@@oliverdellabosca1690
I'm an Accountant and that doesn't make sense. Heck even Paul Keating (who set up super in the first place) won't agree with that.
@@joebloggs1804 well the compulsory contributions are generally taxed at a lower rate, where if super didn't exist, theoretically that 9.5% (soon to be 12%) is a loss of revenue for the government. Moreover, increasing contributions for lower income households, although incredibly helpful, they will still likely rely on the pension in order to survive. So the government's pension expense as a whole will decrease, there is still that substantial loss in potential revenue.
The only way that “low interest” helps is by helping people borrow even larger sums of money and get into more and more debt.
I don’t disagree with the premise of Super but it was designed during and for a time where the economy (locally and globally) was polar opposite to what it is today.
What’s better. A $30,000 salary, $100,000 houses and maybe 7% interest on your savings? Or $70,000 salary, $1,000,000+ houses and 0% interest?
Even with all these bright ideas people are on the brink when entering retirement today. Super has, atleast partially, failed to meet its objective. And maybe it’s not Supers fault but absolutely the broader economic conditions as has been driven by the Government and its policies. How are today’s youth going to fare in another 30-40 years time?
Yer easy to c retirment companies argue its great. But its that companys using youre money.
China’s war against poverty of the last 25 years should have also been adopted by Western governments instead of war against workers
China's war against poverty was fought with Western manufacturing jobs that The West exported to China .
@@stewatparkpark2933 And this was not done with coercion from China or with guns against corporations board members heads
Agree, China’s leader has brought many people out of poverty and almost eliminated it in the country. They know now the richer and stronger their citizens are the better it sets for them going forward as the global , lead economy. Western nations are so behind on it, what better weakness for the west then the love of money!!!
From the horses mouth - Keating the creator of super .Minute 5:10 to 6:30 .
Super is about personal empowerment .
You are in charge of your own money .
Excess super was designed to be passed on to your children .
Super is for you to do what you like with it .
End of discussion .
iv got a balance that would pay my house off. Can i do what i want with my own money ? NO
He designed it to keep unions happy.
We need more social housing. Thousands and thousands of 1 bedroom places affordable within pension payments amounts - it is very sad that the labour and conservative governments have let workers down. We should have allowed 30 year fixed rate mortgages as USA FDR did - we should not be basing our retirement on home ownership by retirement as some do not own a home at retirement.
Paul Keating now a multi multi millionaire finds it easy to tell poor working class people to give 75% of their earning left in life to their kids WHY because they don’t rate our kids opportunity under their stewardship in the future.
I found Keating spot astonishing - Superannuation is to give your principal superannuation money to your kids - and live off the minimum draw down ? Shocking
Im retired at 30 lol
Me at 34.....'you'll never get to retire' they said. Oh so only be a slave to ppl who brought me here without consent? Don't think so. I'll hang myself before I lift a finger for them.
How did you guys retire so early? Property investments? FIRE?
This advice might be to late for a lot of people. But for the very young all I can say is stop blowing your money on designer clothing $4.00 coffes, European holidays tattoos, phones and new cars! Save your money every cent and even on a minimum wage you can own 2 house and be a complete self funded retiree by 60. Trust me this is easily achievable. I know.
Wealth tax on the rich not reinvesting their money into new enterprise.
a Big Alu Can's Recycling Bin
No good if you rent, like me and many others.
Why don't Australians invest in a ASX or World Etfs.
agree s&p500 tracker has averaged over 7.5% for the past 20-30years.. just need to be able to ride the dips thru managing cash holdings..
Not how a holistic economy works - and besides super is investment in the market?
They do
Big Aunty. Stop Kolon from BS spread ! Ex. Oz PM Keating needs congratulating. Tell those eligible for retirement here Downunder to stop bloody working and stealing a job from the next generation ? If I've helped a pensioner make a +35% return on her super balance in a year, she would've had 'half a brick' if the advice offered twelve years ago was followed. Instead she chose to ignore this fact, and has to make do on the pension. V
Retire? Ha! The bottom half of GenX will die on the job.
Those people playing in quartet are basically finished once their ears go
Lady works for puffing billy a fun tourist thing and can’t retire because she has saved nothing and doesn’t want to live on the pension. Man works at a Sunday market selling second rate goods, never saved anything and doesn’t want to live on the pension.
Maybe the secret is create more and you will have more.
By the time I retire my $1m’ish fund should be able to buy a loaf of bread. Thanks lefties.
LNP don’t allow carbs in future.
@@kronicpain7357 🤣🤣🤣🤣🤣🤣
My heart bleeds for you ---------- only a million $'s -----------------. 20 years ago at the age of 60 after 45 years in the work force I lost my job because of restructuring of the company I was working for, it seems the share holders were dissatisfied with their returns. There was about $12,000 in my super because of the age I was when I started work. Never again managed to get full time employment although I worked at any job I could find until I was 75. When you are on unemployment benefits and later on the aged pension the government gives you another kick in the arse, because if you earn more than set small sum of money they deduct a percentage your earnings from your pension. If the my wife and I didn't own our own home I shudder to think where we would be now. Our politicians are such useless self serving mongrels, every thing is about increasing the wealth of the well off and making life as miserable as they can for the low paid.
@@egdiryellam68 It's all relative my friend.