Chris The boomers' apart from the 65 to 68 years old are not 'enjoying'retirement. The vast majority of boomers are yet to retire, 50 year old to 64.
80% of the 5.2 million will get a full or part pension. 1992 for compulsory super was 20 years too late.
Jimbo
10 Aug 2014, 11:55 AM
No doubt, certain generations have benefited greatly from the current paradigm. My dad retired at 55, house paid for and big final salary related pension. I should retire in relative comfort but not as well off as my dad. My kids may never be able to retire.
I am not a Tony Abbott supporter and I think some of the budget measures are incredibly unfair, but I take my hat off to the Liberals for actually recognising that controlling future deficits is the responsibility of the government of today.
I can't remember a government willing to risk its popularity to balance the budget of a government 20 years in the future?
SOP for governments is to throw money around to garner popularity and then let the other lot sort out the mess when they get in.
True. If the Liberals had just said it was 'future budget emergency', or 'emerging budget emergency', I think they may have gained more support.
Still, I agree, hats off to them for taking it on.
IMO, I think the key will be broad based taxataion that also captures the aged. Land tax, increased GST etc and a stable reverse mortgage market.
I would really like IGR4 to have the fiscal projections out to 2100, not 2050. We would then se the fiscal negative hump, that was the ageing and death bust.
The vast majority of boomers are yet to retire, 50 year old to 64.
I am a boomer. I will retire comfortably but not wealthy.
My wifes parents live in Bath in the UK. They both worked for the city council and had non contributory final salary pension schemes. Father in law retired from his role as a draughtsman aged 58 on 75% of final salary, indexed to CPI for life. Mother in law gets 50% final salary (also indexed) due to fewer years of service.
They are actually getting more per week than new employees doing the same job for the same council earn each week for working?
They visit us every year for four or five weeks and stop off in Thailand or Bali for a "holiday" on the way home.
This is all courtesy of the British taxpayer and rate payer.
I will benefit a bit because my missus is an only child and their house is worth a pretty penny. Every time they come over I do a seafood barbie in the hope that they will choke on the fishbones or catch something from the mussels. Buggers refuse to die.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Jimbo. Our Super schemes for public servants in particular were generous in Oz in a similar way to the UK. Thus we have the Future fund at $100 billion, still only $170 billion short of what is required to fund those public servant pension commitments.
The results showed the extraordinary sums that Britain has committed to pay its future retirees. In total, the UK is committed to paying £7.1 trillion in pensions to people who are currently either already retired or still in the workforce.
This is equivalent to nearly five times the UK’s total economic output. Such a figure may be hard to put into proportion, as a trillion – a thousand billion – is obviously a huge number.
If you try to work out what a trillion pounds would look like you get some amazing statistics. A trillion one pound coins arranged next to each other would stretch around the equator over 78 times, and their combined weight would be 105,263 metric tons (or more than ten times the Eiffel Tower). Counting out that many one pound coins, at a rate of one coin per second, would take you 31,709 years.
This figure for the total liability includes private sector liabilities, which are less onerous on future generations because they are all funded. Private sector workplace pension schemes have total liabilities of £1.7 trillion, and this total is likely to decrease over time as so many private sector pension schemes have been closed to new entrants and stopped allowing further accrual by existing members. There is an additional £0.4 trillion worth of liabilities for individual private pensions, but these are also fully funded.
More important are the total government liabilities of £5 trillion. These break down as follows:
Government employee pensions: £1.2 trillion (unfunded: £0.9 trillion; funded: £0.3 trillion) State pensions: £3.8 trillion (all unfunded)
The difference between the funded and unfunded liabilities is very significant. Funded liabilities refer to pension schemes where the money that people pay in as contributions is invested in a fund that floats on the financial markets, so that enough money to pay the pensions builds up over time.
Unfunded schemes work in a different way; with these, the money people pay in is paid out again straightaway on current pensioners, with any difference between incomings and outgoings being met through general taxation. In practice, they are a mechanism for transferring money directly between current workers and those who are in retirement.
Of the government’s liabilities, the most daunting is the £3.8 trillion that will have to be spent on state pensions, which is mostly accounted for the Basic State Pension (BSP). These work on an unfunded system, with only a very weak relationship between the amount of money an individual has paid in through their National Insurance contributions and the benefits they are eligible to receive.
The liability for state pensions is equal to 263% of Britain’s total GDP, which is actually slightly below the EU-level average of 278%. The scale of state pension liabilities is rather surprising given that Britain has a notoriously ungenerous state pension, a fact which will restrict the government’s political room for manoeuvre if they need to make changes to it in the future.
Most of the government employee pension liabilities of £1.2 trillion are unfunded, as only £0.3 trillion of them (largely in the Local Government Pension Scheme) are being run on a funded model. This represents a huge burden which the present generation is passing on to its children and grandchildren down the line.
This represents a huge burden which the present generation is passing on to its children and grandchildren down the line.
Without a doubt, Britain is well and truly fucked.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
But Peter it is not a matter of losing a living standard but for Gen X and Y it's a matter of realigning a fair and equitable standard that boomers enjoyed.
I do not prescribed to the logic that we are in a capitalist trajectory that cannot be reversed, modified or stopped. I think we are stuck in this 'the only way us up' mentality and that we will do so at any cost , health, education, infrastructure etc. the world we are in is unsustainable in many ways but it is mainly because we all have this idea that we can all have it all.
The fact is we can't, but it's what we're choosing to prioritise that is the concern.
Chris Gen X and Y have both enjoyed a better standard of living than the boomers did at the same age, yet the boomers are not complaining. The boomers reached adulthood with families in the seventies and eighties. Here is a paragraph from an AMP study from 2012.
Quote:
Using the same data sources (the HES) dating back to 1984, average disposable incomes increased by 217 per cent showing that, on average, household incomes have grown by around 20 per cent beyond the cost of living in aggregate since 1984. In dollars per week, this means that on average, in the financial year 2009–10, households have around $224 per week extra spending money than was the case in 1984.
The boomers had cheaper housing but they had much higher tax rates and a much higher cost of living. Just comparing house prices to the income of the day is a lightweight method of analysis, but every bear economist does exactly that. They never take tax rates or costs into account. Comparisons to disposable income are also flawed, it has to be a comparison to disposable income after living costs have been deducted to get an accurate comparison.
Living costs as a proportion of income have fallen considerably.
Any expressed market opinion is my own and is not to be taken as financial advice
Peter 'The decline in house purchase affordability is a structural problem created by house prices growing faster than incomes over the last half century. AHURI research finds that between 1960 and 2006 real house prices increased at an average of 2.7 per cent each year compared to 1.9 per cent growth in real incomes — NRV3 Final Report. - See more at: http://www.ahuri.edu.au/themes/housing_affordability#sthash.0gNYus1B.dpuf
The cost of living is quite cheap apart from housing.
I think it would be preferable for it to be more even thou because it is easier to cut down on living expenses, you can buy cheaper brands, eat less, grow your own, don't use the heater or air conditioner, limit driving/carpooling etc.
But to have a roof over your head generally will take over 1/2 your income to live in a suitable location either by FHBing or renting. For a average person on 60k, take out 25% for taxes you are left with 45k. Assuming rent is $500 a week, that is 26k a year, you are left with 19k to spend.
I would think rent should be around 1/2 the price it is, the government should pursue policies that would make housing more affordable.
1, Government build housing and sell at a discount to FHBer's. Ensure there is affordable housing options for people within 15 minutes travel to all large employment areas and CBD locations. 2, Those without housing get a discount on tax if they have to rent equal to $100-$200 per week. 3, Taxes on investment properties. 4, Taxes on demolishing existing properties, encourage rebuilding elsewhere. 5, Stop improving existing infrastructure to meet demand in an area, instead open new areas and put infrastructure there instead of tearing down old to replace with new. 6, Commit to removing restrictions on national parks around Sydney for new housing development suburbs as a % of immigration. So as the government brings in new migrants, new places are rezoned to accommodate them instead of them piling up into existing Sydney suburbs.
This government can easily reduce the cost of housing easily. This will create employment, economic activity and reduce housing costs. Yes it is not a good idea to bulldoze national parks near the cities but if the government wants to keep the high numbers of migrants flooding in, they need to do this if everyone is going to maintain their standard of living.
The young people have been very hard done by, some kind of wealth transfer must reverse back to the young and it should be done via housing.
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