Changes to the Superannuation age : thoughts?

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Forums › Finance and wealth management › Changes to the Superannuation age : thoughts?

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#1732879 8-Mar-2017 10:12

every year or so it should be moved up 1 month IMO. I'm fine with 67. 70 is too long a wait IMO.

I do want it when I hit retirement age (34 now). I dont believe it should be stopped if youre still working, if you've paid taxes all your life, you deserve it IMO. And we all know old people vote like no others, so yeah, hard to take it away completely.

And I really dont think your personal situation should effect how much each person gets, it should be the same, only way its fair IMO.

I wouldnt be surprised if it went away by the time I hit 67 though....

tdgeek

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#1732881 8-Mar-2017 10:20

reven:

every year or so it should be moved up 1 month IMO. I'm fine with 67. 70 is too long a wait IMO.

I do want it when I hit retirement age (34 now). I dont believe it should be stopped if youre still working, if you've paid taxes all your life, you deserve it IMO. And we all know old people vote like no others, so yeah, hard to take it away completely.

And I really dont think your personal situation should effect how much each person gets, it should be the same, only way its fair IMO.

I wouldnt be surprised if it went away by the time I hit 67 though....

If it was means tested, humanoids will find another way. And it removes the desire to plan for the future if your hard earned savings will support you, while the neighbour who did nothing gets supported for free. So, you plan for your investments on the basis of deduct the pension that you wont now get, which is a large deductible and return reducer. Put the savings elsewhere. Might improve the second hand stamps markets!

reven

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#1732884 8-Mar-2017 10:25

sure, i probably wont need it when I retire, kiwisaver should be enough, leave the house to the kids (cos they wont be able to afford auckland otherwise). But just because I'm in a financial position not to need it, doesnt mean I shouldnt get it when someone else does. I think that's unfair. Especially since people like me, have been paying tax all our lives, and the more you earn the more you pay.

I'm hoping it just covers my day to day expenses, food and utilities basically.

if you have been avoiding tax all your life and earning millions, ok maybe they shouldnt get it :P

Geektastic

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#1732887 8-Mar-2017 10:29

JayADee: English has said himself in the past that Super is not unsustainable.

Encouraging people to save for their own retirement rather than relying on government (i.e. taxpayers) to hand them money is eminently sensible.

The current system is already full of strange effects (such as preventing migrants from the UK claiming their UK state pensions, which are expressly contributory via National Insurance, in addition to NZ superannuation regardless of how long they have paid in either country) and if we want people to do that they need to be incentivised.

At present, they are incentivised to buy houses where they can do so, because capital gains are generally tax free and rents are retirement income. This distorts the housing market with other undesirable outcomes as a result of that.

It's utterly sensible to encourage people to provide for themselves but there is no especially attractive way for that just now. KS offers little benefit to the self employed, for example, over and above any other unit trust product.

MikeAqua

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#1732899 8-Mar-2017 10:43

If there was a tax incentive I would put more into KS. I put the minimum amount in, which is the maximum my employer is prepared to match. That's enough to qualify for the govt tax credit.

Beyond those two, KS has no significant benefits over any other investment scheme and it makes sense to spread the eggs between baskets. I'm trying to build up some alternate cash yielding investments and re-invest the net proceeds but that's proving challenging at the moment and cash yield is mostly poor.

Mike

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#1732926 8-Mar-2017 11:07

MikeAqua:

If there was a tax incentive I would put more into KS. I put the minimum amount in, which is the maximum my employer is prepared to match. That's enough to qualify for the govt tax credit.

Beyond those two, KS has no significant benefits over any other investment scheme and it makes sense to spread the eggs between baskets. I'm trying to build up some alternate cash yielding investments and re-invest the net proceeds but that's proving challenging at the moment and cash yield is mostly poor.

And of course for the self employed, there is no employer matching - they just have to pay in whatever they can and that's it.

reven

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#1732930 8-Mar-2017 11:11

MikeAqua:

If there was a tax incentive I would put more into KS. I put the minimum amount in, which is the maximum my employer is prepared to match. That's enough to qualify for the govt tax credit.

Beyond those two, KS has no significant benefits over any other investment scheme and it makes sense to spread the eggs between baskets. I'm trying to build up some alternate cash yielding investments and re-invest the net proceeds but that's proving challenging at the moment and cash yield is mostly poor.

I agree, but I think kiwisaver is more for people who dont know how to invest, and need something for retirement. My parents lost a lot of money in the 1988 (or whenever) market crash, so yeah im not keen on that. Ill likely invest in property when the bulk of my mortgage is paid off (around 50) which I would use for that "They're not making any more land", so property is always a sound investment (maybe not right now, seems to be cooling finally).

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tdgeek

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#1732937 8-Mar-2017 11:18

reven:

sure, i probably wont need it when I retire, kiwisaver should be enough, leave the house to the kids (cos they wont be able to afford auckland otherwise). But just because I'm in a financial position not to need it, doesnt mean I shouldnt get it when someone else does. I think that's unfair. Especially since people like me, have been paying tax all our lives, and the more you earn the more you pay.

I'm hoping it just covers my day to day expenses, food and utilities basically.

if you have been avoiding tax all your life and earning millions, ok maybe they shouldnt get it :P

Yes, if we all get taxed for it, we all should get it. Or make it a compulsory super, so its not taxed, Govt not involved, its a managed long term investment like Kiwi saver, and tax it as its drawn down. And also dont make it an annuity, you cant force people to build up a big fund then drip feed it, show me the moiney when I retire. If I retire early, give it all to me. But put a rule in so people dont buck the system and "retire" at 38 when the new Dodge Viper comes out

tripp

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#1732940 8-Mar-2017 11:30

So maybe it's time to say to the people entering into work force from now something along the lines of "The government will not be paying you super when you hit <insert whatever age here> however we will give you the tools to save for it via kiwisaver, all people aged below 16 years of age will be auto enrolled and will get yearly lump sum payments from the government of $x amount until you kiwisaver unlock age". The amount given by the government would need to be a fair amount to offset what they may have got from super.

MikeAqua

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#1732991 8-Mar-2017 13:04

reven:

MikeAqua:

If there was a tax incentive I would put more into KS. I put the minimum amount in, which is the maximum my employer is prepared to match. That's enough to qualify for the govt tax credit.

Beyond those two, KS has no significant benefits over any other investment scheme and it makes sense to spread the eggs between baskets. I'm trying to build up some alternate cash yielding investments and re-invest the net proceeds but that's proving challenging at the moment and cash yield is mostly poor.

I agree, but I think kiwisaver is more for people who dont know how to invest, and need something for retirement. My parents lost a lot of money in the 1988 (or whenever) market crash, so yeah im not keen on that. Ill likely invest in property when the bulk of my mortgage is paid off (around 50) which I would use for that "They're not making any more land", so property is always a sound investment (maybe not right now, seems to be cooling finally).

If KS is someone's only investment then that's a little scary. Sure, the portfolios are diversified, but you are still with a particular fund management firm.

Investors should be able (and encouraged) to split between a couple of different firms.

Mike

Paul1977

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#1733029 8-Mar-2017 13:31

MikeAqua:

If KS is someone's only investment then that's a little scary. Sure, the portfolios are diversified, but you are still with a particular fund management firm.

Investors should be able (and encouraged) to split between a couple of different firms.

I'd be incredibly surprised if KS isn't the only investment for the majority of people (not counting the house they live in).

mattwnz

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#1733039 8-Mar-2017 13:42

Paul1977:

MikeAqua:

If KS is someone's only investment then that's a little scary. Sure, the portfolios are diversified, but you are still with a particular fund management firm.

Investors should be able (and encouraged) to split between a couple of different firms.

I'd be incredibly surprised if KS isn't the only investment for the majority of people (not counting the house they live in).

That would be fairly common I think ,because any spare cash would be going to pay for the mortgage on the million dollar shed. The problem with investing in your own house as a form of investment, is that it is putting all you eggs in one basket, and houses aren't always a good investment. There are periods it will go up in value, but it can also drop, as it is a supply and demand thing. The house itself depreciates and needs maintenance spending on it. Apparently you should spend up to 5% a year on maintaining and replacing things on a house, or putting that money towards major things such as a roof replacement. I doubt many people do.

BTR

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#1733057 8-Mar-2017 14:26

Personally I like the idea of 65. We already spend most of our lives working why make it even longer? People should be able to enjoy retirement not reach the end of their working life and only have 10 years until they kick the bucket.

The average life expectancy isn't increasing so why increase the retirement age.

sidefx

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#1733073 8-Mar-2017 14:42

BTR:

The average life expectancy isn't increasing so why increase the retirement age.

Statistics NZ would seem to disagree...

http://www.stats.govt.nz/browse_for_stats/health/life_expectancy/NZLifeTables_HOTP10-12.aspx

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mattwnz

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#1733090 8-Mar-2017 14:56

tdgeek:
reven:

every year or so it should be moved up 1 month IMO. I'm fine with 67. 70 is too long a wait IMO.

I do want it when I hit retirement age (34 now). I dont believe it should be stopped if youre still working, if you've paid taxes all your life, you deserve it IMO. And we all know old people vote like no others, so yeah, hard to take it away completely.

And I really dont think your personal situation should effect how much each person gets, it should be the same, only way its fair IMO.

I wouldnt be surprised if it went away by the time I hit 67 though....

If it was means tested, humanoids will find another way. And it removes the desire to plan for the future if your hard earned savings will support you, while the neighbour who did nothing gets supported for free. So, you plan for your investments on the basis of deduct the pension that you wont now get, which is a large deductible and return reducer. Put the savings elsewhere. Might improve the second hand stamps markets!

Yes means testing this sort of thing would be a dumb move by any government . It will add complexity and additional costs to the system, and will bring resentment for something that people have paid into for years with their taxes. Also many will work at getting around it using trusts etc.

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