Old 09-08-12, 03:01 PM
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The biggest issue for us Australian baby boomers is that the compulsory superannuation system has put us well and truly behind the eight-ball. There is still a government-funded pension system in place, and for many, the fortnightly payments would have meant a comfortable enough living had the real value been maintain instead of eroded by successive governments.

But the introduction of compulsory superannuation contributions by employers as part of the wages/salary packaging was introduce about, oh, 20 years ago. That has meant for many, that there is a 20-year gap in those savings, and anyone retiring now is not really going to have enough money to invest and draw down the interest each year to live on.

Then there is that interest rate factor. It used to be that banks were safe destinations for retirement investment, because the interest rates were reasonable. But that became all effed up when banking controls here were dispensed with, and now banks are offering rates severely below those that it charges its mortgage and other borrowing clients. The lending rates go up and down at will, but in effect, investment interest has declined.

That has meant retirees have had to go to self-management with riskier investments, or put their funds into the hands of advisers who make fists full of money from commissions. If the investments go bad, as has happened and it's looming more now as a serious issue as the Chinese economy starts to falter severely, the poor old retiree is left with reduced capital and income, while the adviser gets off scot free.

Personally, I have little faith in the superannuation system. It takes only a GFC to erode the value immensely, and I think many are still trying to recover from that 2008-2009 debacle.

I will probably keep working until I drop dead, which is what John Howard proposed,. The current Fed Government has picked up on that and will raise/has raised the retirement the age to 67 anyway.

If you are fortunate enough to retire with a million or more, invest wisely, but think about planning your retirement away from financial things, too. Keep up your education in the job you had, for instance, so that you can take on various gigs if you need the added income.

Make sure your wife can stand having you around for any length of time in the house. Otherwise, do more riding and find other interests that would take the same amount of time as you would have spent at work, at least in the initial period.

Part-time work in your original field, or developing skills in another, or just plain volunteering or mentoring are some other options that might keep you active mentally and physically.

There's some paperwork stuff that you might need to bring up to scratch. A will, powers of attorney and so on. Get a physical every year, with emphasis on the ticker and blood sugars and cholesterol. Think about whether you need the house you live in now, or are you an empty nester? If the latter, is it feasible to sell and downsize -- although being aware that to buy elsewhere might cost more.

This, however, is fraught with some danger, too. If you have a wide circle of friends, can you do without seeing them for long periods? Do you have an attachment to culture, the arts or particular sports teams or clubs?

I know of numerous examples of people moving to my home state of Tasmania from the mainland after retiring, because the property values were comparatively cheap compared with Victoria or NSW. But they ended up moving back to the mainland after several years, often at a financial loss on the sale of their Tasmanian home, and on the purchase of a new property in their home state because property values had gone up.

They moved back because of the island mentality -- closed mindedness of the true locals, lack of entertainment and cultural opportunities, the cold winters, the moderately warm summers, and maybe even job opportunities when they were needed.

In some ways, it's good they move away, because they arrived with the intention of introducing the stuff they wanted to leave behind, and thus spoil what really is a nice lifestyle.

Anyway, Lenny over in the 50+ forums has been discussing the same thing, so it might be worth looking that thread, too.

Last edited by Rowan; 09-08-12 at 03:10 PM.
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