Baby Boomers are Bust?

[bordsilver]

^ Noted. If a loophole exists where people are incentivised to consume super now rather than accumulate then (on the face of it) it seems to be a flaw.

 

[Lovey80]

The tax breaks given to "self funded" retires are actually now worth about the same as the equivalent pension liability.

That is, there is almost no benefit to the taxpayer in having a private superannuation system over having a government pension system.

If I remember correctly, the tipping point where the super system is more expensive than the pension system is only a few years off, assuming all the tax breaks stay in place and Baby Boomers keep loading all their available earnings into super accounts.

Sorry, my brain's switched off. So some of the money the tax payers could be paying is currently going into their super fund rather than into general current expenditure or current tax cuts. The purpose is so that they have more funds in their super account and aren't relying as much on the next generations taxes to pay for their welfare "entitlements".

So overall (ignoring little tax band effects) the boomers are currently paying more in tax/mandated savings now so that the future tax payers pay less for the boomers retirement. How is this an "expense" that is regarded as bad?

Am I missing what your saying?

Er...maybe.

There are a fair number of loopholes in the super system. For example, one of them is called the "transition to retirement" where people born before 1960 can access their super as a regular income stream (not as a lump sum). This means that if they're still working, they can load their salary directly into their super fund up to the maximum voluntary contribution limit and then pull it straight back out again as an "income stream" and pay 15% tax instead of, say, 37% or 45%.

Are you referring to people that are already over the retirement age? If so, this is a fantastic idea because if I had enough to live on in retirement and there was any chance what so ever that I was going to get taxed @37 or 45% I would stop working and so would many others. Instead of looking at them and thinking they are relying on government, how about a change in attitude to one that says thank you for not relying on government for a hand out and still being a productive part of society. And thank you for the 15% you are still paying but don't have to be.

Now, that's all fine and perfectly legal and everything but all those tax concessions add up to the point where these people aren't really "self funded" because they're still relying on the government - they're just relying on the government letting them keep more of their earnings up front rather than the government taking some and then giving them cash later.

I love it how someone being able to fend for themselves ONLY if they aren't being raped by the tax office counts as "relying on the government". You're only relying on the government not to rape your wallet. It's exactly the same thing as saying "you rely on the government to keep you alive because the government has decided not to send the army in to shoot you in the head".

The way it's playing out, they're relying more on the younger generations of taxpayers to keep paying for everything except pensions which is still quite a lot of stuff.

Essentially, the younger generations will still end up paying for the older generation's retirement, but how they pay for it isn't as obvious.

[Edit] And that's not a complaint either, just something worth noting.

What do you mean they aren't relying on younger generations to pay for everythingexcept pensions? Who do you think is going to pay for the 75% of retirees that haven't had super their whole lives? Or do you mean their own pensions? Either way they are.

Also on the super concessions approaching the cost of pension contributions. Remember that those numbers are peaking right now because the boomers are approaching retirement. They will curb back down once the boomers start retiring and the pension costs will start curbing up. It will be a moot point in 10years.

 

[Nugget]

3% of the income tax we pay is for our pensions. It was supposed to be put aside however some thief from the "Greatest Generation" decided that it'd be better managed if that money was put into consolidated revenue. That knowledge has been lost down the memory hole.

 

[wrcmad]

Now, that's all fine and perfectly legal and everything but all those tax concessions add up to the point where these people aren't really "self funded" because they're still relying on the government - they're just relying on the government letting them keep more of their earnings up front rather than the government taking some and then giving them cash later.

I love it how someone being able to fend for themselves ONLY if they aren't being raped by the tax office counts as "relying on the government". You're only relying on the government not to rape your wallet. It's exactly the same thing as saying "you rely on the government to keep you alive because the government has decided not to send the army in to shoot you in the head".

+1. WTF? They aren't really self funded because the govt isn't thieving enough from them? What kind of logic is that?

Infact these people are self funded, only because the govt. isn't raping them.

 

[renovator]

What are you talking about? There won't be any generation behind me paying for my government mandated pension scheme. Yes sure the boomers are entitled to it they and their parents. They were sold a shit sandwich, a system that encouraged them to pay obscene levels of tax for the promise of a government pension. Only it is their kids that will have to eat that sandwich. You haven't heard any other generation complain because they haven't faced the eating of the shit sandwich.

I totally get the fact that their pensions were spent on building the country we have today, and hence I will never advocate throwing them under a bus. It was a system that was a bad idea then as it is now. All we behind you can hope for is to change the system so that after we have finished paying for your retirements and our own, we don't repeat the same mistakes again.

+1. That's basically it. It's a bad system doomed to failure. If it worked how it was sold then it would be all good and well, but anyone who's being honest about the numbers knows that it doesn't.

I do get annoyed with this "building the nation" crap though. So the boomers didn't get paid for "building the nation"? And what about today's generations who are still building and maintaining the nation but won't get the same benefits? This is the problem I have with all this jingoism designed to make people feel guilty so they'll open their wallets and not ask questions. I've had it up to here with all the guilt and fear-mongering that goes on in this society and it's all associated with government in one way or another and all unjustified. Let's stick to the facts.

The facts are they did build the nation ,they did work hard & pay tax for 50 years A lot of todays generation dont want to get their hands dirty .. Jingoism designed to make you open your wallet ..... lol Just appreciate what others before you accomplished & be thankful they did .

You guys all crap on about hypothesis you dont know what will happen when your at retirement age . ..Show me where its fact where you will not get a pension ? your all blowing it out your butts .

You guys get a sniff of something then hype it up into fact .I'l give you a tip . Just because you think it doesnt mean its true .

 

[Lovey80]

3% of the income tax we pay is for our pensions. It was supposed to be put aside however some thief from the "Greatest Generation" decided that it'd be better managed if that money was put into consolidated revenue. That knowledge has been lost down the memory hole.

Total Federal government revenue for 09/10 was under $270billion, not just income tax = total revenue according to the ABS? Income taxes were only $187billion. The pension cost just under an estimated $35billion in 11/12. That's a long long way above 3%.

 

[Lovey80]

What are you talking about? There won't be any generation behind me paying for my government mandated pension scheme. Yes sure the boomers are entitled to it they and their parents. They were sold a shit sandwich, a system that encouraged them to pay obscene levels of tax for the promise of a government pension. Only it is their kids that will have to eat that sandwich. You haven't heard any other generation complain because they haven't faced the eating of the shit sandwich.

I totally get the fact that their pensions were spent on building the country we have today, and hence I will never advocate throwing them under a bus. It was a system that was a bad idea then as it is now. All we behind you can hope for is to change the system so that after we have finished paying for your retirements and our own, we don't repeat the same mistakes again.

+1. That's basically it. It's a bad system doomed to failure. If it worked how it was sold then it would be all good and well, but anyone who's being honest about the numbers knows that it doesn't.

I do get annoyed with this "building the nation" crap though. So the boomers didn't get paid for "building the nation"? And what about today's generations who are still building and maintaining the nation but won't get the same benefits? This is the problem I have with all this jingoism designed to make people feel guilty so they'll open their wallets and not ask questions. I've had it up to here with all the guilt and fear-mongering that goes on in this society and it's all associated with government in one way or another and all unjustified. Let's stick to the facts.

The facts are they did build the nation ,they did work hard & pay tax for 50 years A lot of todays generation dont want to get their hands dirty .. Jingoism designed to make you open your wallet ..... lol Just appreciate what others before you accomplished & be thankful they did .

You guys all crap on about hypothesis you dont know what will happen when your at retirement age . ..Show me where its fact where you will not get a pension ? your all blowing it out your butts .

You guys get a sniff of something then hype it up into fact .I'l give you a tip . Just because you think it doesnt mean its true .

No one said we weren't greatful for what those that went before us achieved. He was simply making the point that he is rightfully pissed that, that is somehow a lone excuse for many decades of previous politicians selling the younger generations down the road.

Hypothesis? Would you prefer we lived our lives like our super is going to be commandeered by the government and given back some sort of shitty already failed pension scheme? I hope not, and I hope there is never a government funded pension scheme ever enacted. This one is an absolute failure, why wouldn't a future one be any different?

 

[renovator]

We all travel the same road .(or got sold down it ) as you put it . Thats life .... My grandparents did my parents did ,I did ,,my kids are doing it , their kids will do it & so it goes on & on & on ....nothings changing anytime soon .

 

[Big A.D.]

Now, that's all fine and perfectly legal and everything but all those tax concessions add up to the point where these people aren't really "self funded" because they're still relying on the government - they're just relying on the government letting them keep more of their earnings up front rather than the government taking some and then giving them cash later.

I love it how someone being able to fend for themselves ONLY if they aren't being raped by the tax office counts as "relying on the government". You're only relying on the government not to rape your wallet. It's exactly the same thing as saying "you rely on the government to keep you alive because the government has decided not to send the army in to shoot you in the head".

+1. WTF? They aren't really self funded because the govt isn't thieving enough from them? What kind of logic is that?

Infact these people are self funded, only because the govt. isn't raping them.

My point is that they're not "self funded" in the way that my lifestyle is self funded because they're not required to pay for all the same things I'm asked to pay for - roads, schools, hospitals etc. - and that age is the only difference between us.

Again (for those who are having trouble), I'm not saying that is a bad thing given that the demographics make funding the retirement of the Boomers a very tricky problem. What I am saying is that just because someone came up with the term "self funded retirement" doesn't mean those peoples' retirements actually are self funded because they're getting a lot of assistance that isn't available to everyone else.

Superannuation won't be a completely effective way of paying for retirement until we've had a generation that has had it for their whole working lives (which the Boomers didn't) and until that happens the younger generations will still have to contribute towards the retirement of the older generations.

 

[Big A.D.]

3% of the income tax we pay is for our pensions. It was supposed to be put aside however some thief from the "Greatest Generation" decided that it'd be better managed if that money was put into consolidated revenue. That knowledge has been lost down the memory hole.

Total Federal government revenue for 09/10 was under $270billion, not just income tax = total revenue according to the ABS? Income taxes were only $187billion. The pension cost just under an estimated $35billion in 11/12. That's a long long way above 3%.

Back when income tax was introduced, most people only lived for a few years after retiring (5 years if they were lucky).

Someone who retires at 60 now could easily live until they're 85 (five times longer).

 

[AngloSaxon]

3% of the income tax we pay is for our pensions. It was supposed to be put aside however some thief from the "Greatest Generation" decided that it'd be better managed if that money was put into consolidated revenue. That knowledge has been lost down the memory hole.

Total Federal government revenue for 09/10 was under $270billion, not just income tax = total revenue according to the ABS? Income taxes were only $187billion. The pension cost just under an estimated $35billion in 11/12. That's a long long way above 3%.

Back when income tax was introduced, most people only lived for a few years after retiring (5 years if they were lucky).

Someone who retires at 60 now could easily live until they're 85 (five times longer).

Back when the pension was introduced the life expectancy of a male who had worked until pension age was less than one year.

 

[Lovey80]

We all travel the same road .(or got sold down it ) as you put it . Thats life .... My grandparents did my parents did ,I did ,,my kids are doing it , their kids will do it & so it goes on & on & on ....nothings changing anytime soon .

Their kids wont do it at all because your kids will hopefully have a full funded superannuation system and no pension system to support them. So it doesn't go on and on and on. It stops right here with this boomer generation.

 

[Lovey80]

Total Federal government revenue for 09/10 was under $270billion, not just income tax = total revenue according to the ABS? Income taxes were only $187billion. The pension cost just under an estimated $35billion in 11/12. That's a long long way above 3%.

Back when income tax was introduced, most people only lived for a few years after retiring (5 years if they were lucky).

Someone who retires at 60 now could easily live until they're 85 (five times longer).

Back when the pension was introduced the life expectancy of a male who had worked until pension age was less than one year.

And none of that has any relevance to the point I was making to nugget. Actually I wasn't making a point just clarifying that probably 5 times the 3% figure that Nugget was quoting is going towards the pension scheme.

 

[Nugget]

And none of that has any relevance to the point I was making to nugget. Actually I wasn't making a point just clarifying that probably 5 times the 3% figure that Nugget was quoting is going towards the pension scheme.

All I was saying was that 3% of our tax rate is supposed to go towards paying our pension.


If that money had been put aside there'd be a pot of cash for when the Boomers retired.

 

[renovator]

We all travel the same road .(or got sold down it ) as you put it . Thats life .... My grandparents did my parents did ,I did ,,my kids are doing it , their kids will do it & so it goes on & on & on ....nothings changing anytime soon .

Their kids wont do it at all because your kids will hopefully have a full funded superannuation system and no pension system to support them. So it doesn't go on and on and on. It stops right here with this boomer generation.

that would be a theory not fact. or should we say wishful thinking.

 

[Lovey80]

Wishfull thinking is hoping a PONZI scheme could go on for ever.