1. With the taper rate reducing Centrelink pensions by $3 per $1000 assets instead of by $1.50 per $1,000 assets from 1st Jan 2017, it it means we have wasted our time cutting our cloth and being frugal and saving for our retirement and minimising our Centrelink drawings. We are now our spending!!!!!!!!!!!!Realise there are 300,000 of us who will receive less or no Centrelink pension from this and politicians say we ALL must “experience the pain”. My question before the next election is “have politicians pension experienced any pain?” I have aske
    our local member Ross Vasta (Bonner) but no reply just silence…..

    • I have just emailed my new Liberal member Julian Leeser. If the Coalition wishes to maintain government may be they should think about 3000,000 votes they will not be getting!!!

  2. to all thank you for great articles I look forward to your postage each month richard ..retired

  3. Robyn Davies says:

    Trish, love your articles on Superannuation. Today, I jumped onto my Super Fund’s website calculator, put in my super balance and started experimenting with investment return percentages, minimum and variable, but not extravagant annual income amounts and retirement ages from 65-67 years. I am 67 years of age, single, own my home, self funded and have been drawing down the minimum compulsory amount since I turned 65 years. At every calculation, my super balance, which is only marginally above the average, will last me, on average, until I am 114 years of age! right down to the last $5000.
    My question, similar to Pam’s is, What super balance would ASFA calculate for a single person who can live quite well on $35000 per annum? Looking at the above tables, there is a vast difference between $23000 and $43000? That $20000 can make a huge difference to what super balance is required to last for 22 years.

    • Hi Robyn
      Thanks for your email and suggestion.
      The lump sum balances in the article are calculated by SuperGuide, rather than ASFA, using the ASIC retirement planning calculator.
      We have been considering adding a middle income level to our calculations due the Age Pension for a single person overtaking the modest lifestyle, and your email (and Pam’s comments) have prompted us to move that forward – we will do that in the next few weeks, and the updated article will be available in the regular May newsletter in late May.

  4. Hi Trish
    I think the basic and modest lifestyles should be altered as currently for example there is only about $300 difference between the amount needed for a basic income or a modest income for a couple -hardly worth looking at.
    Perhaps a modest income could be somewhere halfway between the basic and comfortable lifestyles, or based on the average superannuation balance of retirees, it would then be more useful for the many people who have closer to the average amount of super.


    • Hi Pam
      Thanks for your comments. The ’modest’ and ‘comfortable’ lifestyles are based on a study done by ASFA, and indexed each quarter. The ‘basic’ category I have included for comparison. The inclusion of the ‘basic’, that is Age Pension only , is merely for comparison with what is required compared with modest and comfortable, but over time the income levels are close together.
      Before 2009, the single Age Pension was a lot lower than it was now, and the difference was much more significant.
      I would not be surprised if ASFA does review the modest lifestyle to provide an income target greater than the Age Pension, but not as high as a comfortable lifestyle, as you suggest.
      I will take this suggestion on board and decide whether SuperGuide adds a mid-range lifestyle between ‘modest’ and ‘comfortable’ or whether we wait for ASFA to review these levels.

  5. /anne... says:

    I’m looking forward to your assessment of what it will take to have a comfortable retirement after 2017 changes. I suspect that it’s going to be virtually impossible to maintain a comfortable retirement without being a fully-funded retiree.

  6. We have been retired for about 3 years – and the figures re about right – our wedge is a bit higher than $1.m and our budget is a bit greater than $58k.
    Niels mate a trained monkey could get 4% – even though rates are down you can get 3.6% (as mid June 15) on line

  7. darrell campbell says:

    Hi Trish,
    Great articles,,, butI still have a problem with “sum needed”
    $1.07 million funds a 22 year retirement on $57k or so.Fine if I retire now.
    But a 30 year-old,,, cant look at this and say “ok, I have to have $1.07 million when I am 67,,, and I’ll be OK”…….as inflation etc makes this meaningless.
    So how does one work out a sum to work towards? (Eg at an “assumed” inflation rate of say, 3% ). Not everyone can easily do the maths !thanks

    • Hi Darrell
      The figures in the article are in today’s dollars (adjusted for inflation) which means the future dollars you actually save are a lot more – it has been adjusted for inflation already so it is meaningful for today. In the near future, we will add an article comparing future and today’s dollars ( adjusted for inflation) over a period of 25 years.

      Also, the ASIC Moneysmart account-based pension calculator shows the calculations behind the figures, and displays the future dollars in a separate page.

  8. 7% return on investment?
    Are you running a meth lab in your garage?

    Nobody else makes more than 4%.

    • Hi.
      Am not sure what your basis for the 4% is.
      Over long periods of time (say the last 30 years) gross returns from equities has exceeded 10% (closer to 13%).
      Over the same periods returns from property has been around 10% (closer to 11%).
      For bonds the return has been around 6%.
      Term deposits may be close to the 4% you mention.
      CPI over this period has been around 3% (perhaps 3.5%).
      If you are not investing directly then there may be other factors affecting your returns.
      Net of tax and CPI my super. portfolio has returned ~11% CAGR over the last 5 years. Hope that provides you with information to contrast your situation with.

      • If you’re in a super fund and take the allocated pension option, you can easily get 7% (after tax) on average over the long term in a “balanced” investment option. The last 5 years my super fund has averaged 10% p.a. in its balanced fund pension account. Even in the low-risk “moderate” option its averaging 7% over the past 5 years.
        Bottom line: 7% average has been a realistic and achievable outcome over the last 10 years. Now that doesn’t mean the next 10 years will be the same, but it gives you some sense of what the super funds can achieve for their members.

  9. Hi Trish

    I find your articles interesting and am trying to gather enough information to make a choice as to when I would need to retire (60 yo hopefully). I would be interested in knowing the numbers crunched on a $1 million if couple were not entitled to the aged pension (full or part).

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