{"id":461,"date":"2009-02-27T15:47:58","date_gmt":"2009-02-27T05:47:58","guid":{"rendered":"http:\/\/www.erisian.com.au\/wordpress\/?p=461"},"modified":"2009-02-27T15:47:58","modified_gmt":"2009-02-27T05:47:58","slug":"pensions-for-millionaires","status":"publish","type":"post","link":"https:\/\/www.erisian.com.au\/wordpress\/2009\/02\/27\/pensions-for-millionaires","title":{"rendered":"Pensions for millionaires"},"content":{"rendered":"<p>A recent <a href=\"http:\/\/www.abc.net.au\/news\/stories\/2009\/02\/26\/2501915.htm\">ABC story<\/a> quotes the Brotherhood of St Laurence&#8217;s recommendations for counting the family home amongst net assets while calculating pension entitlements, with the recommendation that retirees who have valuable homes take out a reverse mortgage, eg, rather than getting a pension. I somehow suspect we&#8217;re going to see a lot of ideas along those lines over the next twenty years as the baby-boom becomes the retiree-boom. Here&#8217;s roughly how that one works out:<\/p>\n<ul>\n<li>work all your life to pay off your mortgage<\/li>\n<li>retire<\/li>\n<li>find out there&#8217;s been a housing boom and your home is now worth over a million dollars<\/li>\n<li>find out that means you don&#8217;t get a pension<\/li>\n<li>take out a reverse mortgage, so that you get paid a pension-equivalent of $24,500 pa<\/li>\n<li>hope you don&#8217;t get taxed on that, and that home loan rates stay at about 6% for the rest of your life<\/li>\n<li>put up with losing other benefits that are tied to your pension<\/li>\n<li>live for another twenty years, getting a total of about $490,000 in pension payments<\/li>\n<li>leave your estate to your kids who get to find out that your fake pension has eaten up $943,000 of home equity, and if they want to keep the home, they get to start with almost a million dollar mortgage to pay off<\/li>\n<li>or, more likely, end up with whichever bank was generous enough to pay you your pension, getting a half-million dollar discount when buying the rest of your house from your estate<\/li>\n<\/ul>\n<p>I wonder if that&#8217;s really the social contract folks thought they were signing up to when they were paying taxes and their mortgages over the past forty odd years.<\/p>\n<p>And you know, somehow I don&#8217;t think the recent drops in superfund balances are going to be the last thing to screw over retirees.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A recent ABC story quotes the Brotherhood of St Laurence&#8217;s recommendations for counting the family home amongst net assets while calculating pension entitlements, with the recommendation that retirees who have valuable homes take out a reverse mortgage, eg, rather than getting a pension. I somehow suspect we&#8217;re going to see a lot of ideas along [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/posts\/461"}],"collection":[{"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/comments?post=461"}],"version-history":[{"count":3,"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/posts\/461\/revisions"}],"predecessor-version":[{"id":464,"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/posts\/461\/revisions\/464"}],"wp:attachment":[{"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/media?parent=461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/categories?post=461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.erisian.com.au\/wordpress\/wp-json\/wp\/v2\/tags?post=461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}