The Taxman Sneaks In
If reports are accurate, the week’s biggest retirement story entered through the back door, quiet as a mouse and unannounced.
Until now, self-funded retirees have avoided paying capital gains tax on investments which are sold after retirement and when the retiree earns no income. That’s going to change. From next year, they will be forced to pay the CGT. On the surface it sounds fair. Why should a lucky few escape the tax? Perhaps. But, these retirees are entitled to feel royally screwed having spent decades building their nest eggs under one set of rules only to have them retrospectively scrapped without warning or consultation.
Governments have every right to change tax law. They don’t have the right to pretend changing the rules after people have made lifetime financial decisions is somehow no big deal. Retirement is becoming less like long-term planning and more like trying to win a game where someone keeps changing the scoreboard.
Clean Your Own House
Banks have copped a spray after ASIC discovered that more than 200,000 faulty mortgage offset accounts had been overcharged. Around $55 million has already been repaid to customers who paid too much interest. The regulator’s verdict was blunt: some banks simply weren’t getting the basics right.
That comes just a few days after research released by the Commonwealth bank explained how we should all avoid being conned.
You have to appreciate the irony.
It could be said that before the banking industry lectures retirees about vigilance, perhaps it should finish checking its own homework. The scam research deserves praise. The offset account failures deserve criticism.
The Internet…Via Your Library
Here’s a genuinely good piece of research that somehow managed to trip over its own shoelaces.
Academics from the University of Canberra found that just 60 minutes of media literacy training significantly improved older Australians’ ability to identify misinformation, fact-check information and think more critically online. Excellent. Just the sort of practical education we can all use.
Then comes the distribution strategy.
Instead of simply making the course freely available online for the people it’s designed to help, libraries are encouraged to purchase the program and deliver it themselves. Even finding details about the course online takes longer than spotting half the scams it’s supposed to prevent.
The research is smart. The rollout not quite so. If you’re teaching Australians how to recognise clumsy sales techniques, perhaps don’t accidentally demonstrate one.
Retirement’s Reward. A Suzuki?
Apparently someone has decided older Australians only aspire to sensible shoes and sensible SUVs.
A motoring website rounded up the “best” cars for older buyers. They’re practical. Reliable. Easy to climb into. Full marks for common sense. Honda. Toyota. Mazda. Suzuki. Plenty of discussion about cup holders, ride height and physical buttons. I’m nodding off.
Here’s a radical thought.
Just because we are over 60 doesn’t mean we’ve lost our thirst for excitement, joy and beauty. Given a choice…Mazda or Mercedes…well, it’s a no brainer for some of us. It’s also a tad irritating being told the best bet for the generation that’s seen it all bears greater resemblance to an appliance than an actual car.
Return of The Pension Debate
You will be pleased to know (and perhaps surprised) that Australia’s age pension compares well internationally. For singles and couples, it amounts to almost 90 per cent of what is considered a modest retirement income. Our eligibility age broadly matches comparable countries, and we don’t spend nearly as much on pensions as many OECD nations.
That should be reassuring, but it hasn’t distracted attention from a debate about whether the family home should eventually be means tested for the pension. Various think tanks have floated proposals, arguing wealthy homeowners receive benefits unavailable to renters.
What is fast emerging after years of relative stability is that nothing in retirement planning should ever be considered off limits.
Home Isn’t Getting Any Cheaper
The average Australian now reckons you’re too old to still be living with Mum and Dad once you hit 31.
That’s easy to say, but increasingly harder to achieve especially in the light of Finder’s latest research which reveals that more than one-third of non-homeowners believe they’ll never own a property as soaring rents continue pushing independence further into the future.
If older Australians accuse younger generations of not growing up, the housing market might like to accept a little responsibility. Staying in the spare bedroom is starting to look less like laziness and more like financial planning.
A Final Thought
The days when retirement was just a caravan, a fishing rod and an occasional game of bowls have long disappeared. Now, you need a tax lawyer, a cyber security expert, a housing economist and someone to translate government policy into plain English.
At least lawn bowls is still straightforward. For now.
