old and poor vs. old and wise

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The Australian Federal Government Treasurer Joe Hockey reckons Australia’s aging population is going to run out of cash and have to live on the cheap… funded by the government.
Australians to live longer and be poorer in 2055, Intergenerational Report shows

I hope it’s simply a cack-handed way of encouraging people to contribute to superannuation, responsibly consider their future, and the country’s budget. A message well meant [albeit for political effect]. Poorly expressed.

Worries me not, if it did I’d stay chained to my desk rather than actively nurturing plans to move to Taylors Arm and live simply & creatively as it’s likely we’ll be less well off financially than we are living and working in the city.

"Life is like a piano. What you get out of it depends on how you play it." Tom Lehrer
“Life is like a piano. What you get out of it depends on how you play it.” Tom Lehrer

Apparently to enjoy a comfortable lifestyle you need “$42,158 a year, or $57,665 for a couple… and according to the ASFA Retirement Standard, a comfortable lifestyle enables an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as; household goods, private health insurance, a reasonable car, good clothes, a range of electronic equipment, and domestic and occasionally international holiday travel.”

Some people, like our friend, have certain priorities, in this case to have sufficient superannuation to drink bottled wine rather than cask…

I’m going to say this quietly, so Joe Hockey doesn’t hear me letting the cat out of the bag, but we’re acquainted with quite a few people who have a good life living on the pension (“As at September 2014, the maximum rate for an age pension is $776.70 for a single person per fortnight. If you are a couple, the rate is $585.50 each per fortnight”) or modest self-funded income.

They don’t dine at fancy restaurants, take overseas holidays or buy new cars annually but were they wealthier, they wouldn’t anyway. They own their homes. They have pastimes, gardens, take walks, cook nice meals, drink bottled beer & wine(!), travel domestically and spend time with family & friends. They spend money on goods and services when required but they don’t update their smartphone every time a new one is released… if indeed they own a smartphone… most don’t.

Even in the city the G.O. and I have had a bit of practice living simply, creatively and economically… on our level of income if you want to pay off your house quickly, that’s what you need to do.

My MiL, an age pensioner, isn’t convinced – she thinks we’re a bit extravagant, and assures us when we make the sea-tree-change she’ll give us lessons how to live frugally. She wastes nothing, accounts for every cent, has a nice home and enviable bank balance. Most importantly she is happy with her life.

How do we plan to live viably at Taylors Arm, a rural area where employment and financial earning opportunities are less than the city’s?

  1. Own our house.
  2. Have no debt.
  3. Utilise our space to grow food.
  4. Cook our own food.
  5. Re-use, recycle, up-cycle.
  6. Utilise the resources of our own time, skills and energy.
  7. Amuse ourselves.
  8. Forgo consumerism.
  9. Budget.
  10. Think of wealth in terms other than monetary.

Do we think we’ll be missing out on good things in life?
No. On the contrary. We believe our realistic expectations and our ability to live within them is every bit as important as our superanuation balances.

I agree it makes sense for employed people to contribute superannuation funds they will access at the end of their working life. What doesn’t make any sense to me is the mandatory contributions unless invested in a cash fund at negligible interest are subject to the vagaries of the share market… essentially a gamble, as was proven during past GFCs when many people lost considerable amounts not just from their superannuation earnings but from their original investment.

The current system doesn’t adequately cater for self-employed whose contributions are not regulated, and also begs the question of fairness to non-paid-work contributors to our society.

Australian superannuation reminds me of The Cat in the Hat…

“And this mess is so big
And so deep and so tall,
We cannot pick it up.
There is no way at all!” ― Dr. Seuss

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27 thoughts on “old and poor vs. old and wise

    katechiconi said:
    March 6, 2015 at 8:11 pm

    Love your TA plans. Might I offer a further suggestion? Identify and join or set up a local barter economy for skills, services and goods. It’s tied in with No. 6 but pushes it a bit further out…

    Like

      EllaDee responded:
      March 7, 2015 at 7:45 am

      Thank you. Around TA barter happens naturally! but to encompass the wider area that’s a great idea. We have friends at Woopi who do it, and also Step-son on the Central Coast.

      Like

        katechiconi said:
        March 7, 2015 at 7:59 am

        Maybe if we do end up retiring to Coffs we can link you and Woopi! Seriously though, Joe Hockey’s plans to keep the older workforce working would be admirable… If only we could convince employers to comply. There’s a serious glass ceiling for older workers, and no point telling them to keep working if no-one will employ them. It seems crazy to me to let all that knowledge, skill and experience go to waste once people hit 50 or so. We ARE good for another 20 years, despite our longing to retire!

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          EllaDee responded:
          March 7, 2015 at 8:32 am

          You make a very good point… I think much of what we’re hearing is political spin with no practical infrastructure. And the black and whiteness of it is daunting. I don’t want to fully retire but I don’t want to spend my twilight years living in an apartment in a city that is becoming ever more densely populated, working full time. As well as the political talk there needs to be real opportunities and also encouragement of viable alternatives.

          Liked by 1 person

          EllaDee responded:
          March 7, 2015 at 12:03 pm

          I would love to barter with you 🙂 I’m realistic enough to know we’ll experience some culture shock regardless but one of the upsides to our tree-sea-change to TA is we already have friends, family & networks. I imagine upping sticks, as people do, to entirely new areas would be a quite different scenario.

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          katechiconi said:
          March 7, 2015 at 1:28 pm

          As someone with exactly that experience, I can tell you that it can take quite a while to insert yourself into a local infrastructure. But if you bring needed experience and skills, it gets a lot easier!

          Like

    davidprosser said:
    March 6, 2015 at 9:17 pm

    I hope it is a way of encouraging people to contribute towards superannuation. Pension funds and benefits have been so mismanaged in the UK that the pension age has increased dramatically. I would have reached the magic retirement age next year but won’t receive my pension until 10 months later and I’m one of the lucky ones.
    I think you and the G.O. will survive well in Taylor’s Arms because your attitude is one of preparedness and not of unrealistic expectations.
    xxx Huge Hugs to both xxx.

    Like

      EllaDee responded:
      March 7, 2015 at 7:48 am

      Thank you. Pension ages are heading that way -up- in Australia as well. I think simply saying people have to work longer is too simplistic but of course suggesting alternatives to consumer lifestyle would have the business sector up in arms.

      Like

    roughseasinthemed said:
    March 6, 2015 at 11:08 pm

    Aaagh. Don’t start me on this topic. David mentions ten months, last I heard, my pension age had gone up five years, it’s prob ten by now. It’s soul-destroying. Don’t make personal financial plans without factoring in government interference.

    We’re doing all the things you mention …

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      EllaDee responded:
      March 7, 2015 at 7:54 am

      You are one of my inspirations. I understand the government, Australia predictably following the UK’s lead are trying to head off a future financial drain but it’s plan full of holes, and as you suggest, subject to the vagaries of government policy. No-one really knows where they’ll be at until they get there (and even then), and that’s regardless if they have funds stashed… there’s talk of taxing superannuation this or that, like a political piggy bank.

      Like

    Gerlinde @ sunnycovechef said:
    March 7, 2015 at 2:31 am

    Here in the U.S. most people need to supplement their retirement ( Social Security). Germany has a good system but they are running out of money, so does the U.S. My husband and I are retired and we are doing fine.
    Your plan of living the simple life sounds great and your doing all the things necessary to accomplish it.

    Like

      EllaDee responded:
      March 7, 2015 at 7:59 am

      I think we will need, and be able to supplement any pension we get from the government. Both of us were in the early days of superannuation where it wasn’t fully rolled out in its present form. The model could still do with refinements I think. But we will have enough because our expectations are to do fine, like you, not live extravagantly.

      Like

    Cecile said:
    March 7, 2015 at 3:02 am

    What an inspiring post!! I’m close to being able to receive my pension here in the States, but the gov. has also increased the age when a person is allowed to begin taking their Social Security, as it’s called. But the age certainly hasn’t jumped by five years…. at least not yet. But I’m sure it will as people live longer and longer. Again – thanks for such an inspiring post. (I have one twin son who thinks as you do (and I do) and the other…. forget about it…)

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      EllaDee responded:
      March 7, 2015 at 8:04 am

      Thank you. Similarly the pension age in Australia is being increased incrementally for the future encouraging people to put away and use their own funds. It makes sense to me but a lot of the political spin, I think, has suggested an unnecessarily high standard of living and not enough emphasis on living well. There’s be hope for your son… Step-son who is in his late 30’s loves buying New Stuff but he also more and more loves his vege garden, to make & recycle things and barter. It’s becoming more on trend!

      Liked by 1 person

    sue marquis bishop said:
    March 7, 2015 at 12:35 pm

    Dr Seuss comment soooo true. Population of retiring. Seniors is growing so dramatically every country has challenges. Read this week China encouraging more than 1 child to offset growing aged. For us as individuals, we need to plan best we can and carve out retirement that fits our resources. Scary for many. For sure. Your post is sure to prompt good discussion. Sue
    Womenlivinglifeafter50.com

    Like

      EllaDee responded:
      March 7, 2015 at 4:33 pm

      One of the reasons I think it’s a scary discussion is because people think they will HAVE to work and worry about if they CAN’T which quite possibly could be the case… even with low unemployment the workforce is predisposed to youth, and for manual work particularly, the fit. I’m lucky, I know seniors living happily on modest incomes but some people don’t have that exposure so their unknown future feels quite daunting with the expectations placed upon them.

      Like

    sara said:
    March 7, 2015 at 2:25 pm

    Ooh! Politics and money 🙂
    You make some fine points here Dale, especially about superannuation being flawed for contractors and non paid contributors and the benefits of living frugally. Everyone does here – there isn’t the constant temptation to buy things like there is in the cities, and living out of town makes it sensible to be at least a little bit self sustaining. Everyone can grow a few veggies, have a couple of chooks and cook for themselves.

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      EllaDee responded:
      March 7, 2015 at 4:22 pm

      Sometimes I like to live dangerously! 😉 I hear lots of real life conversation about Joe Hockey’s plans for the aging population, and the way it’s conveyed scares people. I dislike the scaremongering tone, and the gaping holes. Choosing between consumer vs. sustainable lifestyle there’s a vast difference to how much money you need to live, and a great deal of satisfaction to be had from the latter.
      So true, how we’re proposing to live is no different to what our neighbours are doing already!

      Liked by 1 person

        sara said:
        March 7, 2015 at 8:07 pm

        Exactly, you’ll be in good company!

        Like

    Lori D said:
    March 9, 2015 at 5:28 am

    Don’t even get me started on the government’s “fixes” to “help people.” I think you have a wonderful plan, EllaDee. My husband and I are shooting for something very similar. I’m not big into travel or extravagance anyway. I enjoy being home with my dog, husband and any friends or family who want to come along (or enjoying nature). The only thing sad about this is that you and I will likely not ever be able to meet in person. 😐

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      EllaDee responded:
      March 10, 2015 at 12:28 pm

      It’s true that we may never meet in person but we connect online and in the meeting of minds better than I do with many others in real life. It will be exciting when we both get to that point, and I anticipate the new things we will have to share 🙂

      Liked by 1 person

    memoirsofahusk said:
    March 10, 2015 at 8:07 pm

    It’s in the air, everywhere. I’ve finally reached the stage where a friend saying she spent £15,000 on curtains (yes, the 000s are correct) for one of her houses (yes one of) no longer makes me think – why haven’t I got that kind of money? I used to worry I should have more. But I don’t need more. I’m happy to keep on working if there is demand for what I do – and certainly want to keep on doing something – many things – as I grow older. Yes, I need to be able to live, pay bills, keep some kind of vehicle running, keep warm in winter. Maybe replace my 10 year old mobile phone when big business has made it impossible for me to live in this society without a smartphone (it’s happening). And wine from bottles would be nice too! But inner life is so important and while foreign travel has always been exciting, I realise now how much there is still to see in my own backyard. And there are always ways of working things out if you really want to do something special. Adapt and survive, eschew consumerism and season life with curiosity, inventiveness and maybe a dash of forititude!

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      EllaDee responded:
      March 11, 2015 at 10:27 am

      I’m quite horrified when I hear of vast amounts of $$$s being spent on things that could be purchased adequately for less. I guess for some, money has little value.
      Your last sentence encapsulates our desires… we need a new adventure, and challenge. All lifestyles have them but this particular type appeals to us. I have done a small amount of OS travel and stayed a lot for work in big hotels… they hold no attraction for me. The G.O. doesn’t like to fly and I’d rather travel with him than without!
      I like wine from bottles too… very much… but my world will not end at having a glass of [decent] cask wine 🙂
      Last time we had a decent holiday -too too long ago- we were flying, hiring cars, staying in nice accommodation, cramming it all into a fortnight… and were quite envious of the the campers we encountered along the way with their relaxed lifestyle and pace.

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        memoirsofahusk said:
        March 12, 2015 at 2:32 am

        Decent holiday is something I just can’t pin down – after years of his work masquerading as our ‘breaks’, lounging sounds really dull and flying just to lounge even duller! As I sit and lie here recuperating I’m giving it a lot of thought, though! The old desires to see the world have vanished – I’m more interested in enjoying wherere I am and the people and situations I meet.

        Liked by 1 person

          EllaDee responded:
          March 12, 2015 at 5:34 am

          Flying, driving, tours, sightseeing, sleeping in strange places/beds, eating out, leaves us needing a break to recoup!

          Like

    diannegray said:
    March 11, 2015 at 11:18 am

    I really hope you retire to TA soon – it would be so relaxing to get out of the rat race 😉 I know a lot of people who groan when the mention of retired age arises. Pretty soon it will be ‘retire at 90’. The problem I see is that employers (particularly the Federal Government) try their hardest (underhandedly) to move anyone over 55 out of the workforce and it’s so difficult to get another job when you’re 55+. I attended a meeting one day with a Fed Govt department CEO (name withheld) – he said they wanted new blood in the dept and were looking forward to ‘showing the door’ to the 55+ set. A lot of people were upset and disgruntled as was I. If the govt wants older people to work they need to walk the walk and employ them instead of encouraging them to leave and expect private enterprise to pick up the slack.

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      EllaDee responded:
      March 11, 2015 at 12:43 pm

      We’re working on it! And it will be a different kind of busy but relaxing. Ah yes, I’ve also encountered that philosophy, making way for younger blood, and in one way fair enough if that’s the overreaching agreement but it’s not possible all ways… people can’t work until they’re 90 if employment practices don’t keep pace. Personally I’m looking forward to the change-challenge-adventure but not everyone feels the same, some prefer/need the security of long term full time employment. Just reading the news is evidence that superannuation and the government is all over the shop… they are trying to please everyone, when it should be simple and equitable,
      Lovely to hear from you 🙂

      Liked by 1 person

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