Don NicolussiParticipant@donJoin Date: 2005Post Count: 1,086
Had a bit of time last night to grab some TV and saw a discussion on Channel 10’s “The Project”. The topic was the current governments budget proposal to reduce part pensions for already self funded retirees with assets over 1 million dollar ( not including their own home) and lower the threshold to $750,000.
The panel seemed to think these people were “Rich” and the proposal made “Sense” . I am nowhere near retirement age (early 40’s) but if you were a younger retiree with 750k I am pretty sure you would not feel rich.
How much will you need in todays dollars to feel comfortable in retirement?Captain Risk0Participant@workedJoin Date: 2015Post Count: 14
I think its fair. Everything is relative. And the comparison is to the larger percentage of the retirees.
If you have that many assets (not including your home), most likely you know how to utilise these so that you can live a more comfortable lifestyle than the majority with less. If not, then you go below the threshold and get payed the full pension anyway.CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404
With assets of $750,000 (assuming they are income producing) with the low interest rates you’d be lucky to get $30,000pa (4% return). That is in no way a comfortable retirement. So how are they thinking these people are going to live?
You would have to dip into the capital, so it wouldn’t be long before you did qualify for a part pension.
Where’s the incentive to be a self funded retiree?
You need a hell of a lot more than $750,000 in order to retire. Their REAL aim is to get people to work longer. Buy raising the pension age and lowering the asset base people will have no choice.
Captain? you don’t go under the threshold and get the full pension. You get a part pension until you drop to a very low level of assets.
Adding the family home will be next.
If you are under 30 you had beter start sorting out your retirement quick smart or you’ll be on the street by your 60’s.
MyPropertyProParticipant@mypropertyproJoin Date: 2015Post Count: 1DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376
- This reply was modified 4 years, 9 months ago by Catalyst.
The worse part about it is how the government is manically trying to inflate asset prices to dig themselves out of debt which causes ‘asset rich’ retirees who realistically have “saved their entire lives” only to find no pension there for them in retirement.
you need a hell of a lot more than $30k a year to retire on.StannisParticipant@ben-stanton0Join Date: 2015Post Count: 23
In the objective realm of wealth, I would consider that it would be assets that allow you to pay for all your costs after tax (without the requirement of a job).
These costs can be quite subjective (e.g. private school costs for children, extravagance of holidays) and basically comes down to what your cost of living is.
I would consider someone that is wealthy as not needing to work, being able to afford a comfortable standard of living (subjective) and still have funds left over. I aspire to be wealthy, and this means firstly defining what that amount is for me and what a comfortable standard of living is.
The rough figures I work on is $2.85 million in net worth. Little bit different to $750k. $2.85 means that I do not eat into my capital and have a comfortable standard of living after tax on my gross income.
Some really good information is here: https://www.superannuation.asn.au/resources/retirement-standard which discusses different levels of living standards in retirement.
Ben.Captain Risk0Participant@workedJoin Date: 2015Post Count: 14
Hmmm. $30,000 pa for two people with no debt, no dependents and a lifetime of experience on how to get the most from money. This is not comfortable living? Maybe not for more acquired tastes, but I would definitely trade this for everything I have today.DeanCollinsParticipant@deancollinsJoin Date: 2015Post Count: 376
10k in expenses – power/phone/transport/clothing/incidentals etc
10k in food – maybe including a restaurant trip once or twice a month etc but not much more
10k in luxuries eg a new tv or holiday or some around the house renovations etc once a year
trust me that 30k isn’t going to go far……better get investing/saving now as to buy a new car once in a while or holiday every year or the ability to hire a cleaner to help around the house as you age etc….you are going to be needing at least twice that amount (and keep in mind that’s TODAYS dollars)
If you are wanting to retire in 10 years from now then double that 60k figure to $120k non debt income every year (or basically $4m in 2025 of unencumbered assets on a 3% annual drawdown) so basically unless you have $2m in assets today you’re not ready to retire……CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404
I could live on $30,000 a year if I sat home and didn’t go out anywhere. What sort of life is that?
My mum lives on the pension and saves $100 a week (since she gave up smoking) but I need more than that.
im not a big spender but my travel budget blows that out if the water.
Risky why not just retire and go in the pension if you wish to live on a low income. Easy!BuyersAgentParticipant@knightmJoin Date: 2005Post Count: 330
Rich is relative. Every single one of us on this forum is comparatively rich compared to the worlds poor.
Rich and wealth are also terms with differing definitions.
To me being rich, or wealthy, are all encompassing terms and include finances but are not limited to finances. They also include mindset, family, capacity, opportunity, grace and generosity. I have known some truly rich people who had relatively small bank balances, because their outlook on life was so good they felt, and seemed rich.
Also your title “what is rich” in my mind is very different to what is required for a “comfortable” retirement.
But if you are asking what it takes to have a “middle class” aunsralian comfortable retirement I would suggest 50-80k zero debt could do it. This will require 1.5-2 mill of unencumbered income generating assets depending on the yield.BuyersAgentParticipant@knightmJoin Date: 2005Post Count: 330
I forgot this site. So cool.[email protected]Participant@bernie006-hotmail-comJoin Date: 2009Post Count: 12
Very simple for me.
I earn atm $950/ wk without working.
I have 3 levels for me.
$500/wk I am secure
$2000/wk I am comfy
$1mio/ year I am rich.
All the money will be passive income.
I wont have to workJacqui MiddletonParticipant@jacmJoin Date: 2009Post Count: 2,539
The definition of “rich” depends on your value system.
To one person “rich” might mean having enough money to cover the bills, eat well, socialize etc without worrying whether you can pay the bills.
To another person “rich” might mean not being happy unless there is an overseas holiday each year.
To another person “rich” might mean being surrounded by people that care about you and to be in good health.
You get the idea.PimobpiParticipant@pimobpiJoin Date: 2013Post Count: 60
The confidence one has in their strategies, of returning back to wealth, if disaster was to strike – is what I would consider as being “Rich”.
Very similar to a “doomsday prepper” but without the camo gear & tonnes of baked beans………….OK. I lied about having too much baked beans, it’s probably best to keep stacking those tins. :)
“Those who fret the decline in gold price, don’t really understand gold.”
The above quote teaches us that it is not only personal loss that our strategies should be limited to.
As well as accumulating property, perhaps it is wise to remain relatively wealthy by owning gold, if / when global financial issues arise.
Cheers.maccParticipant@maccJoin Date: 2016Post Count: 14
Crazy giving people with that sort of stash a pension and don’t forget , what sort of percentage would have those kind of assets and stash anyway, wouldn’t be that many you wouldn’t think.
Can’t take it with you though and a good looking corpse means a very boring life so l say spend and you’ll only have 10 or 15yrs to do it too.
The other thing is , don’t forget people say 30k a year but hey, at that age they probably have no debt, no repayments, no car loans, eat like sparrows and probably just watch tv every night so 30k is the same as 80 or 90k to us.
ps and ,they’d be selling things off now and then too and putting away some pretty good money to play with as well.
- This reply was modified 3 years, 9 months ago by macc.
VicShane WParticipant@shanewebbJoin Date: 2016Post Count: 17
I used to believe rich was those who drove nice cars, lived in nice houses and ate at only the finest restaurants. I now know better, most of those people with these luxurious lifestyles are not rich. Some live pay check to pay check just like those on a medium wage. Being rich has much more to do than appearances alone.
Obviously there is more to it than just money, you can have a very rich life without much money, but my definition here will focus on money.
Being rich to me means you have accumulated enough wealth that you can live on your assets, without having to work, but still maintain a lifestyle of abundance. This may differ on someone’s definition of abundance – Donald Trump would never be satisfied with only a few million dollars in networth, however, others are perfectly happy to.
Going back to a few post above, someone living in Nepal would consider most Australian’s to be rich. This question has to take account of the subject answering it.
For me it stems down to a person’s definition of an abundant lifestyle and what price that comes to.
Which of coarse means, in the original post, someone who has near zero assets and is close to retirement, is likely to consider someone with assets of 750k outside their home to be very very rich.
- This reply was modified 3 years, 9 months ago by Shane W.