Sense of entitlement is disgraceful

It saddens me to see time and again letters from near-retirees who are shooting themselves in the foot when it comes to structuring their retirement.

In December, one reader said she was advised to blow $900,000(!) to get the age pension. At her age, an annuity-style investment in growth assets could pay an income stream of $50,000-$60,000 a year for the rest of her life.

Instead they prefer to buy a nice place and live off the $22,000 pension (at taxpayers’ expense), which will be quickly eaten up by stamp duty, rates and repairs.

At the other end of the scale, it’s troubling to see a retiree complaining about the possible loss of $55,000 in franking credit refunds. “Earning” that level of refunds requires dividend income of at least $128,000, suggesting a portfolio value of around $2.8 million and net cash income after franking of $180,000-plus.

The sense of entitlement in wanting to continue paying a zero-tax pension rate on that level of income (and capital growth), while ordinary median wage earners are slugged tens of thousands to compensate for raising the required tax revenue, is disgraceful and inconsistent with the notion that the tax system should treat everyone fairly and equally.

Martin

a better time. Our cover story does tackle this and, yes, for the record I think we can do much better around the portability of our super fund to prevent multiple accounts.

Just the right mix

Thanks for Money magazine. I look forward to every issue. Just writing to say how much I enjoy the current content, layout and mixture of different stories. To me this is the ideal balance of expert advice, interesting reader stories, charts, analysis, data, etc.

Sometimes I have found that magazines decide to make major changes often just for the sake of change. Please don’t change anything. You have a really great magazine, so don’t let anyone convince you to change it. Robert