SUPERANNUATION AND RETIREMENT INCOME: WHO ARE THE ENEMY?
When discussing New Zealand Superannuation, Kiwi Saver and related Retirement Income topics, always be very cautious of the following
GOVERNMENT INTERVENTION AND AD-HOC CHANGES: Be very alert to Government tampering. Governments tinkering with rules of engagement are common, both here in New Zealand, Australia and other Commonwealth countries. People want consistency and certainty re retirement income issues, but the message has not got home to many politicians. The current National Government deserves credit for their cautious approach to New Zealand Superannuation issues, though their Kiwi Saver approach is an example of the intervention tendency.
INFLATION: Sometimes referred to as the Stealth tax, inflation kills standards of living and erodes savings. “Inflation is really corrosive for savers” says Shamubeel Eaqab, Principal economist at the New Zealand Institute of Economic research. Inflation is the rate at which the price level for goods and services raises and the rate at which purchasing power falls. It attacks savings because it devalues them over time
FEE’ S @ CHARGES
Transparency and the difficulty of knowing what charges and fees apply to your investments is a perennial issue, and while there has been improvement in this area, the issue remains clouded, and in my view is still a cash cow for many suppliers of service, eating away at your savings return.
MEDIA COMMENTATORS AND BLOGGERS
“Crisis Rhetoric” normally a doom and gloom approach is often adopted. Be cautious re the writer’s allegiance, formal qualifications and credentials, and whether their statistics reflect trends over time, and be very aware of long term projections, close to worthless in their utility! Economists are not public policy experts, nor social historians, and their opinions should be viewed in that light. Bloggers are relatively new phenomena, try to assess the background, bias and qualifications they bring
SCAMMERS (a person who swindles you by means of deception or fraud) @. SPRIUKERS (salesman or showman).
Many people are ripped off by the above, and yet this issue is a silent one, often due to embarrassment. The rule of thumb is “if its sounds too good to be true” run a mile, and always be very cautious of salesmen, telephone and e-mail offers.
ADULT CHILDREN
Children wanting Mum/Dad support for their lifestyle including lump sums towards Mortgage, living costs, and free accommodation, come into this category. This issue is difficult because family values are personal and differ between every family. Elder abuse financially is everywhere, and like the Scammers and Spriukers embarrassment and misplaced trust applies. Adopt a business model approach and seek independent advice when dealing with sibling issues.
REST HOME CARE
The licence to occupy, and service fees, coupled with Work and Income subsidy formula requires very careful attention. Rest homes as a lifestyle option e.g. safety, community, supervision has many advantages, but the financial costs, structure and legislative model applying is less than adequate, and public education is urgently required.
BUMPS IN THE ROADS
Divorce, redundancy, health issues, etc. can all hit your savings hard. When you factor in the stock market crash of 1987, the Asian crisis of the 1990’s and the global financial crisis of 2008, which ruined many older people’s finances, my conclusion is BEWARE AND REMAIN ON YOUR GUARD
Posted by Alec Waugh