Superannuation

Yesterday there was a bit of flutter on Twitter about a pensioner in the Hutt Valley who was now being made to pay back his student loan - which he took out in 1999 for study - because the recent increase in the pension has meant he's crossed the threshold for repayments.  He complained about this being unjust, and got called a 'cry baby' in some places, as well as being reviled on Twitter.   I think the 'cry baby' post was perhaps a little over the top, but I guess that paying back the loan was always a possibility.  (It's a very small amount, though see below.)

However, what I found unpleasant on Twitter - and on the site where he was called a cry-baby - were the sarcastic and aggressive comments of younger people who have yet to experience what it's like to live on a pension, and nothing but a pension.  This is the pension where, if you're married, you actually get less each than if you're single.  Yes, I know there are ways for two people to economise, but why should they be treated as some double act financially just because they're married?

This is the pension that has been paid for in advance by years of taxation.  I worked for nearly fifty years.  I paid tax throughout that time.  I paid for that superannuation over the fifty years I worked.  Younger people go on about how they're paying for superannuitants.  No, they're not.  Superannuitants have basically paid for their pensions through their tax, just as those now working are paying for their own future pension. 

This is the pension that is about half of what I was earning before I retired. The figure I earned in my last three years of work was possibly the highest I'd ever received, and it wasn't anything like NZ's mean income.  I'd often worked for incomes that were considerably less than that.  Earning that kind of money makes it very hard to put anything away for your retirement, so in the end you're forced to rely on the superannuation.

I'm grateful for the pension, make no bones about it.  However, what many younger people won't be aware of is this little catch.  My wife isn't yet 65, but no longer has a job.  Because I'm on a pension, thankfully she is able to receive a 'supplementary' pension.  As a result, until she's reaches the age of 65, my superannuation figure goes down somewhat from the normal payment, and her payment equals mine.  So we get less than many married pensioners.  During the year she was able to pick up some work.  However, between us, we're only able to earn $100 a week over and above our pensions - until she reaches 65.  (The $100 a week, is of course, taxed, as is the pension itself - something many people don't think is the case, including Michael Laws.) The part-time, casual work she did in the last Work and Income year caused us to go over that threshold figure.  Every dollar she earned over that $100 a week, is taxed at the end of the income year at 70%.  This is not a typo.  You have to make up your mind whether you think it's worth working and having some cash in hand, or whether it's not and thus avoiding the additional tax you incur (it's worked out at the end of the W&I year). 

Perhaps I would at one time have thought superannuitants had it easy (although I was aware what my retired mother was receiving for many years, and it was never much).  But in fact many superannuitants in the country are much worse off than we are, and we don't exactly consider ourselves flush for cash.  So before you start criticising those over 65, think about what they may really be earning.  Once they've paid for the essentials each week (if they can afford to do that) there's next to nothing left.  Not much to show for years of giving your life to your country. 

Gold and the IRA

At the end of February this year, my job comes to an end. I'd known about the possibility for a while, but my initial reaction was that I'd really like to carry on working, because I enjoy working.

I became eligible for the pension/superannuation in May last year, so I've been getting that as well as my wages (well, I've been getting the bit that the Inland Revenue will allow me to have once they've taxed it quite heavily as secondary income).

I've been on holiday since the day before Christmas Eve, 2010. And something dreadful has happened: I've begun to consider that maybe retirement isn't such a bad thing after all. Freed from that constant stricture of having to go to work and stay there until the hours are done, I'm feeling quite good about the possibility of not working at all. However the income aspect is a bit of a problem, and maybe part time work somewhere (without stress or responsibility!) would be useful, just to pay those nasty bills that turn up occasionally.

I came across the acronym, IRA, recently. It isn't related to that Irish group who went round shooting innocent people (and some not so innocent ones) but stands for Individual Retirement Account - or Arrangement, depending on who's telling you what it means.

Regrettably I don't have much of an IR Arrangement...seldom having worked in a job where there was a pension attached, I'm having to rely on the Government to see me through (and they, money-grubbing people that they are, are even taking the tiddly bit of English pension I earned thirty plus years ago and using it to pay my pension here!) So I won't be taking up a gold IRA even though it sounds like a great idea...because the amount of gold I've got is pretty much limited to my own wedding ring and my English grandmother's one - and that looks like a very skinny curtain ring, anyway. Talking of rings, the phrase IRA gold has a nice ring of its own, but unless some currently unknown relative dies and leaves me some gold in their will, it's going to have to continue to ring without my appreciating the sound.

I don't know much about investing in gold (for the reasons stated above) but seemingly: Gold IRA accounts benefit from negative economic, political, environmental, or monetary conditions [that] contribute to a rising gold price. This is the reason gold has always been referred to as the “crisis commodity” and why investors are rolling their 401k and 401b's into Traditional gold IRA and Roth IRA gold accounts.

Does this mean anything to you? Plainly it means something to people who have gold to invest, so I checked out the Web and found out this: In the United States of America, a 401(k) retirement savings plan allows a worker to save for retirement and have the savings invested while deferring current income taxes on the saved money and earnings until withdrawal.

Sounds like a nifty plan, and I'd really like to be involved in a 401k gold plan in my imminent old age. Certainly appeals more than storing the gold I don't have under the bed. All I have to do (if I'm a gold holder, instead of a Gold Card holder - which I actually am) is do a gold IRA transfer.

Actually it's possible that the Irish IRA might well be interested in a gold IRA transfer....certainly more than a Gold Card transfer. Still, Gold Cards are not to be sneezed at. I travelled from Wellington to Paraparaumu on the train the other day - and back - for free because I'm a Gold Card holder. That was a Wow moment for me, really. So far my Gold Card has done nothing more than get me to and fro on the buses either at a discount (in peak hours) or free (in off peak). I'm not complaining, it's just that the train trip was the best bonus I've had in a while. Even getting into the movies with a Gold Card isn't much cop - you save all of six dollars....that's also pretty much Wow, but in a rather different mode.

Photo courtesy of IzaD KasmijaN