I can remember way back reading Jan's books and being utterly convinced about the risk of relying on a pension in my dotage. Combined with a desire for Financial Freedom, this propelled me into the world of property investing in large measure. But then it never really entered my head that the pension was an option I wanted to consider - it would be just too small for an enjoyable life at an age where some comforts and care become more important than ever.
And the calculations behind super looked pretty unimpressive as well - a pretty tawdry retirement even with a relatively high income over my working life. I can't see how any young-ish person could reasonably draw any other conclusion than that they need to do "something else" in a pretty big way (like property investing) than the standard super / pension in order to have a comfortable retirement.
And yet, today I read this:
http://www.abc.net.au/radionational/programs/breakfast/monday-finance-with-sheryle-bagwell/5414518
80% of Australians still on the pension by 2050? And yet, today we have $1.5 trillion in the superannuation system, enjoying massive tax protection advantages? What gives? After 70 years of having what was sold to us as a "you beaut" superannuation system, with almost tax free status, we still have 80% of the retirement population drawing a pension? It's the 80/20 rule gone nuts! That's a huge pool of people by then fighting over a diminishing sum of government money. I wouldn't like my chances...
If ever we needed an answer to the question of "why invest?", then I've got to say taking my chances in buying real estate looks to be a lot lower risk than getting stuck in that pool. Lets hope a few more Australians start to think the same way!
And the calculations behind super looked pretty unimpressive as well - a pretty tawdry retirement even with a relatively high income over my working life. I can't see how any young-ish person could reasonably draw any other conclusion than that they need to do "something else" in a pretty big way (like property investing) than the standard super / pension in order to have a comfortable retirement.
And yet, today I read this:
http://www.abc.net.au/radionational/programs/breakfast/monday-finance-with-sheryle-bagwell/5414518
We clearly have a spending problem that will only get worse as the population ages. One of the more surprising forecasts revealed by Joe Hockey last week is that four out of five Australians will still receive a full or part aged pension in 2050, despite all the billions of dollars in tax benefits for superannuation.
80% of Australians still on the pension by 2050? And yet, today we have $1.5 trillion in the superannuation system, enjoying massive tax protection advantages? What gives? After 70 years of having what was sold to us as a "you beaut" superannuation system, with almost tax free status, we still have 80% of the retirement population drawing a pension? It's the 80/20 rule gone nuts! That's a huge pool of people by then fighting over a diminishing sum of government money. I wouldn't like my chances...
If ever we needed an answer to the question of "why invest?", then I've got to say taking my chances in buying real estate looks to be a lot lower risk than getting stuck in that pool. Lets hope a few more Australians start to think the same way!