You Shouldn't Be Forced to Eat Your Own Home?

Paul Keating says Australians owed superannuation increase after being 'robbed' of real wage adjustments

If you can afford to pay $1m+ for a house and end up with say $250k in super then you probably should eat your own home, your choice? Can't have your cake and eat it at the same time or ScoMo from marketing got us all fooled?

Comments

  • +45 votes

    How would you possibly only end up with $250k in super?

    Also not 100% sure what the question is, or anything else there really.

    • -30 votes

      If 20 years ago you bought at $300k and now worth $1m and at that time easy to borrow on $60k salary which is only paying $6k a year in SG. Over 40 - 45 years working life. On a default fund option probably not too far from the truth buddy.

      It is why a lot of older people have very small super but expensive homes.

      If you take the same idea in 20 years that property has gone 3x and people must be buying believing it will only go up. In 20 years even if your $900k now property goes 2x it is $1.8m. I'd say it would be bigger than super balance of most people.

      • +52 votes

        You never mentioned anything about 20 years ago in the op. Your op just seems like strange ramblings to be honest. Who gives a rat's what the value of the house is compared to your super, if your super balance allows you to live your life?

        • -44 votes

          if your super balance allows you to live your life?

          There you finally realised the point. Rest is just your ramblings.

          • +6 votes

            @netjock: But your Super is your money. You don't need anyone's permission to use it in retirement. Houses shouldn't even come into it.

      • +30 votes

        It is why a lot of older people have very small super but expensive homes.

        Lack of super is because they haven't had it their whole life…

        • +4 votes

          people should take responsibility for their finances, it's not up to the government to ensure you have enough to retire

          • +8 votes

            @redfox1200: Good to know, but still doesn't detract from the fact that baby boomers haven't had super their whole lives

            • +2 votes

              @spackbace: thats my point, you shouldn't be relying on super, thats not taking responsibility for your finances (unless you are actually contributing more than the minimum SG)

              • +2 votes

                @redfox1200: You're making a point, but your point isn't a reply to my comments…

              • +2 votes

                @redfox1200: I disagree, it's fine to rely on Super, but it's better if you make extra contributions (and claim the tax reduction), as well as use a high growth plan rather than balance, hopefully, by the time you retire you don't have to rely too much on the government to help you out (that's my plan personally).

            • +6 votes

              @spackbace: They get free education and cheap housing as compensation :-)

            •  

              @spackbace: There were retirement schemes in the beforefore. Aging wasn't invented in 1991 by Keating. It's part of why many in my grandparents generation didn't move jobs.

          • +6 votes

            @redfox1200: I heard that in the past, before super, the government promised baby boomers that if they work hard and pay tax, the government will take care of them in retirement. So this is entirely the government's fault (i.e. voters' fault)

            •  

              @dhnqt: you mean the government told them to work hard and buy houses, and the government will do everything it can to push up the price of those houses.

    • +1 vote

      Casualisation of the workforce, Looking after kids long term for a start

    •  

      I can think of a few. imigrated to country, always had a low paid job, had a disability for a few years. caring for family members etc

  • +4 votes

    Can’t trust ex PMs nor incumbent PMs. None of them of skin in the game.

    Are they personally impacted by their legislation…

  • +25 votes

    People who live in $1m+ plus houses often payed a lot less for them when they bought them (eg the inner west of Sydney hasn’t always been affluent) and aren’t necessarily rich. The place is only worth that if you’re in the market to sell, otherwise it’s just your home (with inflated council rates). To me it seems unfair to make older people uproot from their family home and community to be able to afford to survive. I’m with Keating on this one.

    • +57 votes

      No what is unfair is to treat wealth in property different from wealth anywhere else. People with other forms of wealth (like shares or whatever) who are renting are expected to sell those shares to live. Why should a person sitting on a million dollar asset not be expected to sell it if they need the money.

      I say all governments benefits should be calculated on your total wealth, irrespective of what form it is in. PPOR shouldn't (once again) get a favourable treatment.

      • +8 votes

        People's investments and assets exist within the context of the Australian economy, taxation and welfare system. There is no free market where all assets are treated equally (e.g. franked securities, negative gearing, superannuation). This includes policy which has historically and currently incentivizes and encourages people to include their primary residence as part of their investment and retirement plan. Those who bought their homes when this was the encouraged strategy shouldn't have the rug pulled out from under them retrospectively. Most of these people contributed to the economy through their labour and paying taxes across their life.

        I bought my home for well under a million only 7 years ago, it's now worth over $1 million if I were to sell it - but I'm not going to as it's my families housing security. I'm not expecting to ever receive any kind of government pension and hope to have enough investments in addition to my home by the time I do. But if something happens, like serious illness or disability, I'd like to think at least I'll have housing security. This is also in the governments interest as they don't really want older people, people with disabilities and children at risk of homelessness.

        • +7 votes

          So what? Just like market conditions can and do change, the government can and should remove the overly generous treatment of PPOR and investment property. Why should property owners get a magical investment guarantee that doesn't exist literally anywhere else?

          The fact that you even think this is a reasonable suggestion shows how ingrained the concept of bending economic policy to advantage property ownership is in Australia, and one of the reason property is now seen as an investment rather than a home.

          If you need cash and want to remain in the property, get a reverse mortgage. What shouldn't happen is people who cannot afford to buy a home subsidise your "right" to keep yours.

          • +5 votes

            @lunchbox99: The distinction here is property ownership as a primary place of residence vs property investment. I agree that people shouldn't have significant investment in property outside their place of residence and still receive a pension, but that is already the case to an extent. Perhaps you would suggest lowering the asset test limit? (which excludes the primary residence, but not entirely). I'd say the primary reason why housing is unaffordable is actually people with investment properties, not owner occupiers. So the strategies to address this would be things like getting rid of negative gearing and reducing the income and asset test limits for people receiving a pension.

            • +2 votes

              @morse: Why does it being a residence change the value of the asset. There are mechanisms to leverage the value of the asset, so you should use them if you have no other means.

              • +2 votes

                @lunchbox99: because the government doesn't want a whole lot of homeless people so they encourage people to invest in their housing. It doesn't change the value of the asset but the taxation and welfare system around that asset. There are lots of things that are incentivized because the government decides it's better for the economy, society etc e.g. incentives for mining companies to operate mines to boost employment, low interest loans/incentives for farmers so we have food security. Sometimes they get it right, sometimes they don't. The free market doesn't exist, it's a myth. If you really want more affordable housing (which I think is a reasonable suggestion) the target is investment properties in addition to the primary residence, not pensioners homes (remember that these pensioners paid taxes across their lives, particularly the ones who own their own homes).

                • +9 votes

                  @morse: Well incentivizing housing has driven the price of housing to unaffordable levels for a large section of our nation. Is this the future we want, where nobody except the top 30% can buy a home? I want a future where the housing market isn't hugely distorted by economic policy.

                  And so what if pensioners paid tax - the people who can't afford a house also pay tax and are effectively subsiding the generous tax and benefit treatment of PPOR. Wealth should be treated equally in assessing benefits. Someone should not be penalised for having more super because they chose that instead of property, for example.

                  • +1 vote

                    @lunchbox99: So the place to start would be incentives for investment property owners, rather than primary residences, so that we don't create a different housing crisis. I really don't think that only the top 30% can buy a home. More accurately about the top 20% can afford an investment property in addition to their residence. Sometimes it might seem unattainable, when people are young and on a low income, but over time property ownership is still attainable for most. Sydney is really unaffordable - due to population growth, the housing type in Sydney will also have to change with more people living in units as is common in large cities all over the world (lets hope building standards improve, after some of the disasters). I see you're in Queensland, most people will be able to afford to buy a property to live in, in Queensland. Probably not a free standing home walking distance to the beach or in the inner suburbs of Brisbane - but a unit in one of those areas, or a family home further out, if you're working and saving is absolutely attainable within 10-20 years (remembering that many people who are pensioners now, paid their homes of over 30years or more).

                    •  

                      @morse: I'm not talking about me or Brisbane or Queensland. I'm talking about Australia and economic policy favouring one particular investment over all others. I like how you gloss over that a huge swathe of the Australian population living in Sydney who genuinely have a housing affordability crisis. Same goes for melbourne.

                      Now you might claim PPORs are not "investing" but it doesn't change the fact that they still receive $$ when the property is sold (either directly to downsize/enter a nursing home, or their family as inheritance). So they still get both ends - government benefits and the cash from the asset.

                      • +1 vote

                        @lunchbox99: Didn't gloss over Sydney or Melbourne, just said that people in those cities will have to adjust to different property sizes and types, as is the case all over the world. The 5 million people in Sydney can't all live in a free standing house - there simply isn't enough land. The prices are high in Sydney because of demand, not because of pensioners living in their own homes and receiving a pension. The population of Sydney has almost doubled since most people receiving a pension now would have bought their homes.

                        If someone sells their 'PPOR' they pay capital gains tax like everyone else. Assets over deposit for the nursing home, above the asset test limit reduce the person's pension. So like I suggested before perhaps you don't think the current asset test limit is right.

                        As I mentioned below to cloudy, if there's a perceived inequity in people receiving a pension then their kids inheriting the home, one solution would be an inheritance tax (like is in place in many parts of the world), this has been a very unpopular suggestion in Australia when politicians have raised it in the past. Possibly if their assets are worth over a certain amount and they received the pension, some of that could be deducted from the inheritance - better than trying to force older people out of their homes so that younger people can have one.

                        To be honest you sound like you want older people to live in poverty and that younger people should be more entitled to a PPOR than older people. Older pensioners with a PPOR have bought their house and paid their taxes - they contributed for the money to be there for the pension they are receiving (which isn't that much). Are you suggesting that a pensioner who owns their home in Coogee, should sell and move to Campbelltown and live off the profits, where they know noone and have no community supports etc, to make it more affordable for you to buy a house in Coogee?

                        • +4 votes

                          @morse:

                          If someone sells their 'PPOR' they pay capital gains tax like everyone else.

                          You don't pay Capital gains on your PPOR it falls under the main residence exemption and it is tax free.

                          https://www.ato.gov.au/general/capital-gains-tax/your-home-a...

                          I think the entire system of pension and whatnot should be changed. Offer more community based independent living for the older people. Think apartment/townhouse complexes with optional assistance where they can live in a community with others who are their age but it does not have the constraints of a nursing home rather than buying there would be sizable deposit and then monthly upkeep fees. The overall cost would be likely less than home ownership and it would free up a large portion of their money from the house which part would be used for the deposit and part could be invested to get a small income to supplement the pension. The Government could even offer something similar to a downsizer contribution where if they sell and take this offer they can chuck 300k or so into super as a tax free deposit.

                          throwing them out into bad situations is not good but incentivising downsizing/independent living communities would put more houses on the market and have a positive effect on the older people as they would have extra time and be around people a community of people in situations like their own.

                          •  

                            @Bjingo: Oh, I had no idea about the main residence exemption! Good to know.

                            I think downsizing does have benefits for some, but I don't think people should lose their pension if they choose not to. Some of these complexes for older people (similar to what you describe) are a complete rort, there's often hidden fees and excessive charges. e.g. some places have contracts where you can only use their trades people on the unit and they charge obscene fees. Sometimes people actually lose connection to community by moving from where they've lived for a long time, such as friends who've lived in the area for a long time, the neighbour who drops in or the kids next door who they enjoy visiting etc. A lot of these places are a long distance to shops, libraries etc, so once someone lose their ability to drive they are reliant on taxis, friends and community transport. Having seen this happen to so many people I've deliberately bought into an area where the shops, parks etc are a short distance to walk, or cheap with a taxi if needed, which I will reduce the risk of isolation in the future.

                            I like the idea of a downsizer contribution for those who choose to - but lunchbox99 is suggesting that the pension is removed from people who own property worth over a certain amount, so I doubt they'd support giving the same people any tax/asset test incentive to downsize.

                            • +1 vote

                              @morse: Yeah disallowing pension because of where you live is ridiculous, owning your home is already taken into account for the asset test for pension, you can have less total assets before pension is disallowed.

                              https://www.servicesaustralia.gov.au/individuals/services/ce...

                              Personally rather than the current suggestion I would prefer if the asset test as even higher for non home owners I think a 200k difference is not enough to balance the difference in owning a home or not.

                              Good policy always involved encouraging people to do what is best for everyone not punishing those who don't, and we actually already have a downsizing contribution, though it seems like its not too well known (given it is new since the 2018 budget).

                              https://www.ato.gov.au/individuals/super/growing-your-super/...

                              I only have experience for some of the complexes, which were good experiences but I can see it being abused if left in the hands of a private organisation.

                        • +3 votes

                          @morse:

                          To be honest you sound like you want older people to live in poverty and that younger people should be more entitled to a PPOR than older people.

                          Not at all. I just think total wealth is all that matters, not the instrument a person decided to lock it into. So I think all assets should be assessed equally based on their value.

                          I'm happy for people with a home to receive a pension (within reason). If anything I'm advocating that people without a home but wealth elsewhere should receive equal treatment wrt government benefits.

                        •  

                          @morse: This dynamic is changing though, a lot of people now work remotely and dont actually need to be in the cities

          • +1 vote

            @lunchbox99: Sounds awesome in theory.
            Until it's your turn to be force to sell your home to just to get by.
            What comes around goes around.

            • +1 vote

              @berry580: Well nobody cares if ageing renters have to hock everything they own to pay rent. Am I supposed to feel extra sympathy for property owners?

              •  

                @lunchbox99: Looks like there is enough people who cares to maintain status quo as at the writing of this post.

                For people who can't save enough to buy a house in 65 years (or 45 of working years), I'm speechless.

            • +1 vote

              @berry580: Yes I agree, Its easy to say , hard to do. My parents built their house about 30+ years ago, Wasnt worth much then, worth a lot more now I am sure. My mum would never want to get rid of the house after my dad passed away as its what they built together and where we grew up in. The Family home, and I agree with her. People seem to be going past the whole Family Home concept, perhaps they didnt have that same attachment to their homes. But the concept has been around for a long time, not just in Australia.

              And the Family home is totally different from people having multiple investment properties. It is also hard for elderly people who are used to transport / streets near their family home (even friends and family as well as shops) to suddenly have to uproot and sell their home and move to a cheaper area further away and have to relearn the transport and streets.

      •  

        Buy house first to live in then invest in shares and other houses

      • +2 votes

        Durr. It's their home.

        A single property owner didn't cause hyperinflation with speculation of capital gains. Wealthy young professionals in boom industries did as they bought up everything.

        Instead of destroying local communities by forcing people to leave their friends, family's and communities at retirement, how about you argue for a 99% capital gains tax on second or corporate property sales?

        Tax the rich? That's unAustralian. If we could displace millions of Indigenous folks for over two centuries why can't we do the same to cash poor retirees, families of the disabled and widowed parents? At least when our ancestors decided to displace land owners they where open about their hatred instead of hiding behind 'fairness'.

        •  

          99% cap gains tax. That's a good one. I'd imagine many investors will leave the market just before that happens.
          I can't see enough political will to ever allow that to happen though

    • +8 votes

      unfair to make older people uproot from their family home and community to be able to afford to survive

      I agree with you whole heartedly.

      But that is different from what Keating is saying.

      Why should people with million(s) of wealth continue to receive government welfare?

      Why is it right for people not need to access their wealth and get welfare just to have that wealth transferred to they kids?

      You can leave people in their homes and have them access their wealth for living. More needs to be done in that area.

      I’m saying this because I look at my parents living in a 7 figure home (bought in the 80s) and getting aged pension. And all that’s gone happen is me and my siblings, whom are all well off, will get a million dollar house.
      This doesn’t seem right. Keating wants this to be the case.

      • -3 votes

        See above reply to lunchbox99. What would your parents live off until they pass away if they don't receive the pension and stay in their own home? Do you feel they should sell and live elsewhere off the profits and not receive a pension? (this can have huge and expensive social consequences e.g. social isolation through being displaced from their community). I don't know their circumstances so perhaps they have some superannuation as well.

        Would you see an inheritance tax on what you and your siblings inherit as fair? Australia is quite unusual in not having inheritance tax. Historically when this idea has been floated people say it's unfair as it's taxing assets that have already been taxed through income tax when the deceased person earned them. In the example you give it would address the inequity of the pension received whilst living in their home. Perhaps there could be some kind of system where if people have assets over a certain amount when they pass away, the amount their received in pension since retiring is deducted from the inheritance. This would work in your situation, however say it was an elderly couple with a disabled child, they might want to leave the house for the child to have housing security.

        • +5 votes

          Reverse mortgage to tap into their equity.

          The reality is they do have substantial wealth, unlike many other people who don't qualify due to holding liquid assets that are worth substantially less.

        • +4 votes

          See above reply to lunchbox99. What would your parents live off until they pass away if they don't receive the pension and stay in their own home? Do you feel they should sell and live elsewhere off the profits and not receive a pension? (this can have huge and expensive social consequences e.g. social isolation through being displaced from their community). I don't know their circumstances so perhaps they have some superannuation as well.

          Not sure if you read what Keating said. He is suggesting people shouldn't access the equity of their home for cash flow. I am arguing they should. I argue they shouldn't have the choice of living on piles of wealth on government money.
          You just need reverse mortgages with some protection. People can get cash while they are alive from banks and banks take the house when the people die, if they live longer than the value of the home then they get the pension, there is never a circumstance where they get kicked out of their home or run out of cash. There is no exaggerating selling off the house and moving off to the sticks to survive.

          Inheritance tax is sensible, income may be taxed twice, but the flow of income has moved from person to person. So that's how we tax in this country anyway.

          The way we treat we disability is generally very good in this country. Sure I can understand parents wanting to leave something for their disabled children, but there must be recognition that much support is available and not to overly complicate rules. I also stress I am not talking about taking everything away from elderly people when they die. I just advocate for a sensible level.

          • +1 vote

            @cloudy: Forgive my ignorance but I’m struggling to understand how someone in their retirement age and relying on government pension is supposed to repay a reverse mortgage?

            So after the money runs out they are forced to sell?

            Or upon their passing, the bank forecloses on the house?

            •  

              @cuteseal: Ideally, upon passing the bank possess the property and sells it to recoup and profit for the transaction.

              The industry isn’t popular as the government pension continues to be generous, overly generous if you ask me.

            •  

              @cuteseal: They don't ever repay it. Bank sells it and takes what they're owed, heirs take what is remaining if any.

      • +4 votes

        This is exactly what I'm talking about. Many many people cannot buy a house and via the less generous tax treatment of their wealth assets are effectively subsidising this state of affairs. It seems grossly unfair to me and just entrenches the growing wealth gap.

        I mean if I have $1m in shares would the government just accept the argument that "well I just don't want to sell them to pay for my bills because I rather like having them".

        I should say I also get the other side of the coin. My parents are exactly in this situation - they have a house and receive a pension.

        •  

          I think a car is primarily a tool that we use to transport from A to B. So in that sense, a home is merely a property which we house ourselves. I think we need to de-glorify "homes" and look at them more objectively.

          The reality is that housing crisis in Australia is due: the banks, fomo, foreign owners, over-demand, and under-supply. So it is a fact that property ownership has become a store of value (aka means to wealth storage), in the same way as Bitcoin, Stocks, Cash, and Gold…. and the sooner we align with reality the better.

          So people should NOT eat their cake AND keep it too. So you should be means tested when entering retirement. And there should be an inheritance tax. Although not to extreme levels where it removes confidence from the Aussie economy. This could potentially be something that takes a lot of research to implement properly, but once it's up and running, then they merely have to maintain it (easy) by updating it every year or two, based on changing conditions, for retirees.

  • +12 votes

    Im sick of listening to any politician tbh.

    Labor, Liberal, Greens, they are all full of shit and only in it to line their own pockets.

    • +6 votes

      And the way they talk is like they assume we are all brainless children and they are superior in every way and must be listened to as they are all-mighty all-knowing leaders.

      Maybe we would have better leaders if we didn't choose the managing director of Tourism Australia as our country's Prime Minister!

      • +12 votes

        Maybe we would have better leaders if we didn't choose the managing director of Tourism Australia as our country's Prime Minister!

        Now, now, Blue Cat. You're not telling the whole truth, are you? You mean a failed Managing Director of Tourism.

        • -2 votes

          please stop criticising abc style reporting …lifes 2 short (and getting shorter very quickly) too waste worrying about missing facts and events.

    • +1 vote

      Now you sound like a politician in the making…

  • +3 votes

    From the article…“All of the evidence suggests that increases in the SG (superannuation guarantee) do come at the expense of future wages growth," Mr Callaghan said.

    Every small to medium business owner I’ve spoken to has said they will just effectively cut employee wages to pay for the super increase. I think it’s a false economy as you can’t effectively force a pay increase on business without that coming from somewhere. In the current shaky post pandemic environment it’s a dumb thing to try and do.

    • +8 votes

      they will just effectively cut employee wages to pay for the super increase.

      This 100%. I can't believe how many blind people are assuming that employers will just throw extra money into your salary, like they have so much cash standing around.
      It will just mean reduced salaries, that is all, and is retarded to do it now during our important economy recovery.

    • +12 votes

      "Every small to medium business owner I’ve spoken to has said they will just effectively cut employee wages to pay for the super increase"

      Only if they're paying above award rates. Plenty of small to medium business owners who pay their employees based on the award, and those rates are ex super.

      Granted, yes, they could reduce employee hours to compensate. But don't kid ourselves that if the employer could have reduced hours before that they wouldn't have done so already (with or without an SG increase).

      •  

        They can still cut wages by cutting hours or staff. They then expect staff to do the same work in 30 hours that they used to do in 35 hours

        • +6 votes

          That's what I said in my final sentence.

          If they could reduce the hours (or cut staff, which reduces the overall hours worked in the company) already, why wouldn't they do that now and not wait for the SG increase? That just screams out as an inefficiency (real or not), and it doesn't take an SG increase for an employer to take up on that opportunity.

          Of course, you could say "well, they're just going to work the staff harder now" - are we to believe that without the SG increase that employers are not continuously pushing their employees to work harder anyway?

          •  

            @pangwen: It's hard to wrap your head around this when you just think about what will happen in an individual business.

            Think about all of the businesses combined.

            Sure some will manage to squeeze more out of their staff, but some will have to lay people off, and some won't survive at all.

      •  

        if you look at the current super guarantee it has been funded through the redirection of award pay increases to super there is no employer funding it is all redirected employee money

    • +2 votes

      So cut the pay and you won't see house growth if wages can't fund it win win

    • +3 votes

      Well, this is what's going to happen to me.

      My contract states my package figure (or total employment cost). That package is split between take home pay and Super Guarantee. When the Super Guarantee goes up, it just means my take home pay goes down. So the increase in SG comes out of my own pocket - not my employer's!

      I'd rather have a higher take home pay. That way, I still have the option to put more into super if I want to!

    •  

      Every small to medium business owner I’ve spoken to has said they will just effectively cut employee wages to pay for the super increase.

      Which they can't do for full-time/part-time employees. They would need to sign a new contract.

      What will happen is a further contraction of salaries across the board as salaries on offer shrink to accomondate the increase in super

    • +1 vote

      Ok. Given wage increases have been SFA recently, give me SG

  • +14 votes

    This drone again? We should just look across the ditch for real leadership. Negative gearing was brought down with the stroke of a pen in a bid to curb out of control house prices. What a champ (before anyone attacks me, I am an owner who negatively gears an IP, yet I am self aware to acknowledge the damage the scheme is doing to inequality in our country).

    • +6 votes

      Negative gearing was brought down with the stroke of a pen in a bid to curb out of control house prices

      Shorten tried that look where that go him.

      • +8 votes

        People will always vote out of selfishness in this country. “25 bad policies that will hurt the country but one that helps me a lot? I’ll vote for them then!”

    • +1 vote

      Which ditch? If you are talking NZ, their house prices are more insane than ours!

      •  

        Yes! Didn’t help NZ. This is not a tax issue. This is a supply issue. The supply of property has not kept up with population growth and on top of that, most jobs are concentrated in major cities so you further push demand to where there is limited ability to increase density.

  •  

    Not going to be able to retire on those lame 5-10% annual returns in super.

    •  

      Probably why people are into Bitcoin, NFT or whatever that can go parabolic up.

      • +1 vote

        Yep. The rate of unreported inflation such as housing is much much higher.
        Wage slaves are being robbed. Next minute you know it's double income plus second jobs to make ends meet.

        • +2 votes

          Housing is included in inflation records.
          Cost of using the asset is recorded in rent,
          Asset price speculation is not recorded.

          •  

            @cloudy: Not included in CPI

            •  

              @mr_asstight: Maybe you should do some reading, rent is included in inflation, CPI is inflation.

              •  

                @cloudy: To be fair, since when does rent increases keep up with property price growth.

                In theory it is included, but residential property prices disconnected from the value of rent they generate years ago, is it because of either tax policy, consumer preferences, or it's a bubble? that is unclear.

                •  

                  @Shacktool:

                  To be fair, since when does rent increases keep up with property price growth

                  During raising interest rates

      •  

        the USD money supply is going to start going parabolic up soon

    • +1 vote

      Then you are overspending or under-earning.

  •  

    Grannies who purchased their $100k homes decades ago and now worth $1m+ should not have to sell their homes.

    I'd prefer to look to the future.

    Compulsory Superannuation started in 1992 this means another born on 1974 or later have had Supernnuation guarantee their entire working lives.

    ALL Australians born on or after 1974 should be automatically ineligible for the Age Pension.

    • +1 vote

      Yes they should have to sell. It's an asset just like any other asset. If you need money, sell it. Asset poor people (ie tax paying renters) shouldn't be subsiding benefits for asset rich people.

      •  

        a person's home is not just an asset

        • +2 votes

          Tough luck. You chose to put all your wealth into your house, you sell it if you need money. Just like any other asset.

          If someone has no house and a million dollars in ANYTHING ELSE, they would be expected to sell it to pay their bills.

          • +1 vote

            @lunchbox99:

            Tough luck. You chose to put all your wealth into your house, you sell it if you need money. Just like any other asset.
            If someone has no house and a million dollars in ANYTHING ELSE, they would be expected to sell it to pay their bills.

            I dont have a house, or any other assets.

            Because I dont have a house I can be forced to leave my home by other people. It is horrific.

            You want me to agree with you that that should be forced on other people?

            f no

        • +6 votes

          After the kids leave home you really don't need that 4 bedroom 2 bathroom home anymore.

          Prob makes sense to downsize anyway

          • +2 votes

            @SlickMick: This is an interesting one. I've seen downsizing work well, but also turn out horribly for some older people. One advantage of staying in family home is connection to community, which can be incredibly important when ageing. Moving to a cheaper area or having a sea/tree change, can sometimes lead to social isolation, as well as lack of access to health services (when moving out of an urban area). I've also seen people downsize from a single level home to a townhouse or unit block and a few years later they can't manage the stairs, or the smaller bathroom makes it hard to get in and out of the shower.

          •  

            @SlickMick:

            After the kids leave home you really don't need that 4 bedroom 2 bathroom home anymore.
            Prob makes sense to downsize anyway

            Your assuming.

            Maybe it's the centre of an extended family's life where multiple generations gather.

            Maybe it's full of shared history and memories.

            Maybe it and the people who still live there are a treasured part of a community.

            •  

              @bargain huntress: yes, there are various scenarios:

              a) couple no longer needing, nor able to maintain, nor able to afford original home: time to move on;
              b) income earners still at home: none of the above applies, stay and enjoy;
              c) don't want to leave but can't afford to stay: by this stage of your life you've probably realised that we need to make compromises. If you haven't made provision to finance continuing to live amongst your treasured community and history and memories, somethings gonna have to give.

        • +3 votes

          A person's home is absolutely just an asset. They can readily sell up and downsize or rent a new home. Homes are not intangible.

          •  

            @haemolysis: Houses are tangible.
            Homes are completely intangible. The trouble is the way they are tied together.

            •  

              @bargain huntress: That's too deep for be to determine which team you're on, except you revealed your hand above.

              I thought you were saying they should be happy to move thier home to a new house, but clearly that isn't what you're saying.

      • +2 votes

        The main difference is that society sold them (Boomers) on the idea that they would be taken care of in retirement.

        This is us fulfilling that promise.

        Those people did not buy $1m homes, they bought them cheap and due to the several property booms have seen their homes appreciate many fold.

        • +1 vote

          I don't know who they were listening to. I started saving for retirement in 1984. Was that the year super was invented, or was it already there but those early generations were too clueless with finances to know to use it. (I hear the same anti-super aguements today.)

          My dad cashed out all his super the day he retired and squandered it within the year. Some people are just never going to be financially successful.

      •  

        They often do if they needed to enter residential aged care. Bond price is usually $500k+ and your home is included in the assets test. If they were to access this money prior to needing a nursing home, and they don't have enough to enter aged care, guess who picks up the bill? The government. I do not advocate for the elderly selling their primary residence at all for this reason.

        •  

          I hope you have the same feeling for people without a home and renting in retirement - that they should not have to access their wealth in shares or super prior to getting government benefits.

      • -2 votes

        Those tax paying renters should be placing the money they save in renting into other fund creating means.
        I know plenty of renters who go on more holidays then I me and I only bought a new TV for the first time in 10 years at Xmas.
        Just cause I look after my future shouldn't mean I get compared negatively to others who don't.