Interesting point, are retirees over-represented as "persons on lower incomes". Probably so (but far from the worst over-represented group). And, are retirees people on as high or higher income than when they were working? Of course usually not gross taxable income although the lower expenses and tax reduction for over 60's make some better off wrt disposable income.
And I just had a thought...should people be aiming to retire on a % of their final net income (when they are usually at their highest income level for their career, with the excess $ going into super), or should they be aiming for a % of their normal/average lifetime income?
I agree 100% with your point about pensioners and the inequity of the proposed changes, but that is a sub-group of retirees. Although I am personally far from wealthy, there are many woopies (wealthy old people) out there.
And the Jetstar card...I'm tempted. $29 or even $59 is cheap 20,000 points. And this extra benefit of that card "Use your card to book flights on jetstar.com or via the Jetstar call centre and you'll avoid the standard Booking and Service Fee."
Yes, well that sub group of pensioners is going to be the biggest group in future.
This is because to adequately fund a retirement, and relying on a safe (i.e. low ) investment return when retired, requires people to put away nearly 30% of their income every year through employee and employer contributions. But instead they are currently putting away 9% employer contributions and maybe 5% of their own. As Peter Costello put it last year, the end result is that a lot of people are just taking themselves off the full old age pension, into a part old age pension (i.e they haven't really gained). And with the recent changes, those who have saved the most are being punished the most.
I forget the exact figures but from memory, after the recent changes are implemented, a couple get the maximum old age pension with $345,000 or so in the bank, and lose it all at around $827,000 or so in the bank. Assuming a safe investment return of 5%, those who just miss out on the part pension are getting $41,000 a year, versus those on a full pension who have put little or no money away for retirement, but who receive $34,000 a year plus up to around $5000 in benefits associated with being on that pension. While those on a full pension with $345,000 invested at 5% are on that $34,000 plus $5000 in benefits plus $17,000 in investment income - which makes them significantly better off than those who have been cut off from the pension with $827,000 in assets.
As someone pointed out at another forum I visit, the win-win scenario for an about to retire couple with $827,000 is to go to a casino and bet double or nothing the amount of $827,000-$345,000= $482,000. If they double their money, they are better off. If they lose their money, they get an extra $15,000 income plus benefits a year, relative to where they would have been.
Anyhow - I think that this group could make good use of the low fee Jetstar card for earning points. Qantas Cash and Global Wallet are cheaper since they cost nothing, but they aren't a credit card - so would have to be closely monitored so as not to have payments bounce.
Regards,
Renato
