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Dementia insurance for retirees; Country living in a tiny little house; Extreme budgeting; How to ask for a raise; Your SOE sales preparatory work

Dementia insurance for retirees; Country living in a tiny little house; Extreme budgeting; How to ask for a raise; Your SOE sales preparatory work

By Amanda Morrall

1) Dementia and money and annuities

Among the myriad of concerns, issues and proposals raised of late with respect to KiwiSaver and the demographic timebomb is the need to establish an annuities market or something akin to it to ensure that retirees, when they get access to their funds at 65, don't blow the lot on boat, bach or BMW. 

Government has yet to respond in any meaningful way about what to do about this issue although next month marks the commencement of the withdrawal phase for the first batch of retirees in KiwiSaver.

This blog from SmartMoney.com explains the benefits of an annuities system and how it might be regarded as "dementia insurance" to help with personal finance in old age.

2) Living large in a tiny house

Here's a heartwarming story via yahoofinance.com about how one American couple (a casualty of the housing bubble explosion in the U.S.) staged a financial comeback by downsizing (to the extreme) reprioritising their time (and spending) by embracing a simple country life. Watch the video. Very cool.

3) Extreme savings

More proof you can make do on way less by changing habits and your mindset. Here, Penny Pyror of Business Day interviews Simple Savings founder Fiona Lippey about extreme budgeting, feeding a family on $10 a week and her book The $21 Challenge. 

4) How to ask for raise

Women specialise in guilt on pretty much every level. This blog from openwallet.net is a bit dated but offers a nice first person story about how one gal overcame her fears to get what she wanted and the lessons learned along the way. Get over the guilt and get paid what your worth ladies..and gentlemen.

5) Get a piece of the action

Over the next five years, our Government will begin the much touted SOE sell off. The mixed ownership model privatisation begins later this year with Meridian Energy, followed by Genesis Energy, Mighty River Power, Solid Energy and Air New Zealand (not necessarily in that order.) Kiwi investors have been promised first place in the queue. In anticipation of the offering, Government has helpfully put together this useful share offer 101 website.

To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter@amandamorrall

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11 Comments

Interesting to read the comments (98 % negative) re Simple Savings.  I myself subscribe to the site and use the savings forum daily - mainly as a way to keep accountable for paying off my mortgage and picking up any tips.

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Problems with Dementia in over 80's is one thing but locking people out of their life savings in their 60's is quite another.

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Yes the govt will splurge on the spin to pump the SOE share sale...and when it's all over...either power prices will rise and RISE...or dividends will slump...pump and slump!

By then Sir John Key, Sir Bill English and the Grand Poo Bah will be away and gone....taking their fat perks with them.

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Unfortunately you can do all that is suggested in securing a raise, but some organisations just do not have the spare cash - especially when there are others all lined up for the same thing.  I like to think outside the square and whilst hoping a raise may finally prevail  - you may need to do a bit on the side and think about another stream of revenue generation to top up in these difficult times.  If anyone has any good ideas on what you could do in line with your 7am-6pm day job I'd love to hear it.  I've heard starting your own blog site might be rather lucrative once you have done the hard yards in the initial setup?

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Nice one Amanda on the wee house that is...now try finding a NZ local govt prepared to issue a consent to the same size house for a family of five....good luck.

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1) FFS so rip ppl off while saving and rip them off again while paying out.  Do these financial ppl have no morals what so ever? oh wait....no.....duh....

Whats so wrong with self managed saving and a self managed retirement income?  Many OAPs are still savvy at 70+ and have "all day" to work at it.....Yeah sure others are basket cases and then an annuity makes sense...but compulsory uh no.

I save by paying down debt as fast as I can, thats 5%+ Im saving....one pension in the meantime lost me 1.8%...like duh....

Strikes me that the pie is ever shrinking and the vultures are looking for a bigger share guaranteed monopoly by the state meantime....

regards

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annuities are a pretty good way of insuring against longevity. if  'its' in your genes could be a really good bet.

that said they're not widely available, and that means less competition esp here in NZ, and margins are higher. perhaps rather than bung it all in an annuity just 30% of the retirement fund which when  supplementwith whatever Super is  availble could make quite a difference to the overall standard of living should you get ever get that  message from the Queen.

The question is whether you get it inflation adjusted as well. That costs even more but kinda makes sense of course.  

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Yes....

regards

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Then annuities first came out they were a good deal (apparantly) however the companies realised they had been too generous and dropped the payouts considerably....now they are marginal at best. Really a careful person with time should do as well, I mean the fees and profit margins get removed for a DIY plan.....and they are considerable might even be enjoyable....I know my God Father loves looking after his investments...
.....Also there is a risk that the company could go to the wall and you lose your capital overnight and frankly I think the entire industry is awful.

NB Inflation has a second side, deflation.....

regards

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There are heaps of issues in retirement aren't there. Do you have debt, do you want to give a child some money, is national super big enough so kiwisaver can be considered to be funds for buying things, or will you sell your big home and move somewhere small. Some  may even use the kiwisaver payout to buy power company shares! (Actually everybody should have been saving up to buy them, there has been enough warning. But I suggest staying clear of Genesis, the carbon tax will probably rise once the govt has sold down) All of these things affect individual situations. Being forced to take out an annuity with kiwisaver could be very bad news for a large number of people. Then there will be those who would take their funds down to the casino......

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facebook's IPO comes to mind....

As so called market experts say the NZX has been gutted of value, so the SOE's will....u.....fix that....I'd expect then a massive over-subscribe and some shirts being lost....

Also Im of the opinion that we face a depression 1930s style when the share market collapsed 90%.....so yes save but stay in cash....for now...

regards

 

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