Cross-posted from The Idiot Tax:
It’s tough to find old people online. They’re usually too busy writing a four page reply to an automated email they received from Telstra. And let’s be realistic, while the rest of us are grizzling online about the economy and housing, or asking former reality contestants to reaffirm our shitty parenting skills, the actual grizzled are getting on with life.
Good times are rolling. House prices have never been higher. The young have never been lazier. The smugness has never been more satisfying. They could go on like this until death. Or the pension changes.
What?
Yes, other than humbly bragging in a Noel Whittaker column (just pay for the advice you old bastards) nothing gets the infirms’ blood pressure up like potential pension cuts. With the upcoming pension asset limit changes in 2017, they’ve stopped responding to automated emails and taken to the internet to voice their displeasure. Yep, these changes are a scandal. No longer can you own your home, have over a mill in assets and get a boat fuel stipend from the government.
As a committed researcher and purveyor of quality content, I strive to find the best stuff to copy & paste into my blog. So you’re lucky I stumbled onto a hive of resentful oldies. Parody maybe? No chance. I know they’re actually pensioners because they’re responding to an online article with their full names. (enjoy the read).
Behold Brian* not his real name
We are part pensioners who will lose the $6k part pension we receive and we’ve scratched our heads as what to do. The age pension was our insurance if the markets turned sour again, losses in our super would be compensated to some degree by an increase in pension.
Using idiot math, to receive $6k Brian and his wife’s assets would be somewhere between 1 million – 1.1 million as a homeowning couple. Yes, someone publicly asked the question “as a homeowner with an additional million in assets, what will I do without my extra $6k pa from the government?” They’re about to lose $115 a week, but Brian also says they’re getting 4% on their assets. Let’s assume they’ll be left on $42,000. Won’t happen because Brian has a plan.
However after much consideration we have decided to demolish our family home and build something more substantial with a finished cost of about $760k requiring a $400k super withdrawal (after legals) to enable this to occur. The area we live in will accommodate a more expensive house which will appreciate at a greater rate than our present house, we will retain and manage our garden during the rebuild and will live in our caravan during that time. The outcome of all this is we will receive a part pension of about $26k which represents a return on the $400k we withdraw from super of 6.5% risk free!.
Things get a bit sketchy in this explanation, but all this knocking down a house, building a new one and living in a caravan, Brian says gets him and the wife $26k a year in pension. There seems to be some discrepancies, but anyway, we’ll take the bits we can on face value. At a rough guess that means, I dunno, about $480k of assets left to get that 26k. The $480k at his 4% return should give $19,200, giving them $45,200 in income for the year. This may change depending if an income test overrides the assets test, but you don’t come here for the full picture.
Call pensioners greedy, but never call them lazy. Brian and the wife could adjust and live on the $42,000. They’d still get senior pogey medicine card. Nope, gotta get that extra $3k, with more than half of it fronted by the government.
You do see what has happened here? Brian could take a little more risk, bump that return up to 4.5-5%. That would be equal to, or more than, what they get, but oh no “we do have the option to increase our risk and perhaps earn more but possibly lose more!.” So this is a guy who is prepared to demolish a house and burn $400k, but can’t endure a correction or bear market.
I know, I know. Times are risky. The end is nigh. We can’t expect pensioners to take risks. Yep, I went back and read those same articles from the 70’s & 80’s. We were screwed then too. Much better myself and Mrs Idiot keep Brian and his wife going. Millionaires shouldn’t have to fend for themselves.
Anyway here’s something to get really outraged about.
And just forget this.
