That's because you were 21 back then.
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If you could with the wave of a wand, go back to being 21 in the 1980s or 21 in 2015, which would you choose? I think I'd go with the 1980s. Maybe that is just because I'm bewildered by modernity but maybe things were just a tad easier for people starting out then? You didn't need two incomes to buy a house...
Getting started wasn't easy then either. It's difficult in Auckland, but elsewhere it's not. 21 year old now is looking at an exciting world with more innovation than we saw. When I was a kid we had a copper for the washing, a safe for meat etc., coal range, open fires and a large villa with one power point in the living room for a radio, which was nearly the swine of the house. Even the record player (gramophone) was a wind - up invention with doors to open for volume control. We were the first in the street to get a telephone which was on a party line with all sorts of people. Flying was for the well heeled. 'Technology has never moved as fast as it has in our life times, and will never move this slow again.' Today's 20 year olds are in for an exciting time.
Okay, we've all had a good look down memory lane so its well overdue that someone actually tried to give a serious answer. Being the resident number cruncher and the one responsible for daring to open this retirement can of worms I guess I should bring out the trusty abacus and give this a serious crack. Please re-read my post below to get this thread back into context.
What the heck is going on ? I am starting to like Paul Henry's new Breakfast T.V. show :eek2: This is both scary and refreshing as the other breakfast T.V. channel has become so politically correct and lightweight its quite frankly nauseating at times.
This morning while TV1 tried to pretend they had the scoop on Gloriavale, (really John Campbell has this by the teeth and deserves all the credit), our very politically incorrect Mr Henry, (he is so politically incorrect I find him actually refreshing), had a really good segment celebrating AIR N.Z.'s 75th birthday with some really good historical clips, (he said we should be proud of our great airline, good on him), and then had a very good segment on retirement planning asking the very question I've asked in this thread. Help WTF ??? is Paul Henry stalking me and my threads lol.
He had what appeared to be a well educated expert on from AMP, (they're sponsors of the show), and anyway for those that missed it here's what unfolded.
First up it was made clear that the first question to answer was what level of income do you need in retirement to be comfortable and that everyone's definition of comfortable would be different.
Fortunately, (to put us all out of our misery), there's been a major study done in Australia the conclusion from which was that by average consensus and based on cost of living this figure is $52,000 per annum.
Many will want to debate that figure but keep in mind that when you retire lets assume you are mortgage free and your kids are no longer bleeding you for cash every five seconds.
I'm not familiar with the study but one would presume a moderate level of comfort in retirement included all the basics of living plus some allowance for holidays, running a reasonable car e.t.c. as well as money left over to help one's grandkids e.t.c. The figure seems reasonable to me so for the sake of argument lets assume I use this figure to answer the question I posed at the start of this thread.
Now I will share my own perspective on National Super as making an assumption about this is fundamental to retirement planning
We are fortunate to live in N.Z. which ever since Michael Joesph Savage initiated the social welfare system in 1935 I believe the Government has a mandate to look after the needy and less fortunate in our society. The contract for National Superannuation is something that is well embedded in our society, (you pay for it as you earn), and I honestly believe no political party would be able to completely abolish it. Yes I think there needs to be tinkering around the margins and there probably will be at some stage, probably some sort of national super surtax and maybe extending out the eligibility age to say 67... but at its core, this system remains intact, I think this is fairly certain, (not absolutely certain but to be frank neither is the question of whether one will in fact make it to their retirement age in the first place).
So working backwards, what is the current level of superannuation ? You can find the answer here for your circumstances http://www.workandincome.govt.nz/map...ension-ra.html
So for a married couple the gross super is presently $33,935.20 per annum indexed and adjusted for inflation each year, lets call it $34,000 to make the maths more simple.
So if we accept that once your kids have left home and you are mortgage free you can retire comfortably on $52,000 income per year that leaves only another $18,000 a year to find.
So therefore someone with some skill to manage their finances, (probably most on here would fall into that category I would hope), should surely be able to average 7% gross per year and therefore the amount you need to retire on is 18,000 / .07 = $257,000.
But wait there's more :)
Looking back at the illustrations I provided above many people have some sort of other income. For example we have a downstairs flat that's separate to our debt free house and that could easily bring in $350 a week rent if it wasn't being let to our daughter for a considerably subsidised sum, and even assuming a conservative occupancy rate of say 80% I think that would bring in about $14,500 per annum so in theory I would only need to find another $3,500 per annum to have a comfortable retirement.
$3,500 / .07 = $50,000. So there's my answer. Outrageous as it seems it would appear I have this conundrum shot to bits already. I might be able to skip my blood pressure tablet today :)
In all seriousness, I think a LOT of SCAREMONGERRING goes on in this retirement savings sector, mainly by parties with a vested interest. The reality as I have graphically illustrated in the examples re-posted above is the amount needed isn't some vast unattainable sum that you need to scrimp and save for your while working life, save so hard as to be worried and have a miserable existence in your youth and middle age. Life is for living and enjoyment and provided some common-sense is used I think the vast majority of us are going to have our retirement organised just fine.
I think that is probably true IF you want to work into your late 60s. Who would want to do that?
Roger.
Are to trying to convince us or your wife????
I have a serious suspicion you are looking at Jags again????
Most people get horribly bored with nothing to do all day. Studies I've seen suggest people will be working well into their sixties.
Mate, you're a legend and a bloody mind reader. I'm going down to buy my new supercharged Jaguar this afternoon :D....Just gotta convince my wife first lol