Friday, October 9, 2015

The strangely liberating experience of receiving money you haven't earned

(First published in the Nelson Mail and Manawatu Standard, October 7.)
I recently passed a personal milestone. I became a superannuitant.
This entitles me to a Super Gold card and all the public transport perks that go with it.

A friend of mine, obviously with far too much time on his hands, worked out that I could travel from my home in the Wairarapa to Waiheke Island for $49.
This would involve catching an off-peak train to Wellington, getting on a bus to Wellington Airport – all for nothing – then catching a cheap Jetstar flight to Auckland.

From Auckland Airport I could catch a bus free of charge to the downtown terminal, from where it would be a short walk to catch a ferry – again, at no cost – to Waiheke. The only cost to me would be the $49 Jetstar ticket.
All very interesting (and thank you Winston Peters), but what my friend failed to explain is why I should want to go to Waiheke in the first place.

I’ve been there and while it’s very pretty, I got the distinct impression that the principal objective of Waiheke islanders is to relieve mainlanders of as much of their money as possible in the shortest time available, and often without so much as a smile. (Old Chinese proverb:  If you find it difficult to smile, do not open a shop.) 
Putting all that aside, turning 65 does seem a life-changing event. A sum of money mysteriously turns up in my bank account every fortnight without my having done anything to earn it.

This a novel and strangely liberating experience. It means that for the first time in my life, if I were prepared to live frugally, I could possibly get by without working.
I don't intend to dwell here on the affordability issue, but my view, for what it’s worth, has long been that the age of entitlement for national super should be progressively raised, given that people are living and working longer. Of course I would say that, having reached 65 myself.

I certainly intend to go on working while I can. But I also think there’s merit in the idea that people whose bodies are worn out after a lifetime of hard physical work should be allowed to retire earlier than 65 in return for a lower super payment.

As to whether superannuation should be means-tested, as it is in Australia, I’m not so sure.
The problem with that idea is that it penalises people who have made provision for their retirement by saving. This usually means denying themselves things they might otherwise have enjoyed.

Conversely, means testing could have the perverse effect of incentivising people not to save or acquire assets, knowing that the state will look after them. So, on balance: no, it would send the wrong signals. Slackers could be rewarded and the diligent penalised. What sort of message is that?
But never mind the big policy questions. Having reached 65 myself, I face a far more immediate personal dilemma – one that confronts almost every person of my age.
Do we carefully try to conserve whatever we’ve managed to save, keeping a tight rein on spending in the knowledge that we might need it to supplement national superannuation well into the future, or do we make the best of whatever time we’ve got?

Put more bluntly, should we scrimp or live it up?
The complicating factor is that none of us know how much time we have left. Over the past few years I have seen too many friends and relations – people of roughly my own age – get sick and die.

Only recently a friend and former colleague went into hospital for what should have been routine surgery. Unforeseen complications developed, as a result of which she died weeks later.
She and her recently retired husband were still active and looking toward to a full and rewarding life together. Almost overnight, everything changed.

Such stories are all too common. Inevitably, they encourage a fatalistic belief that we should live for today because we don’t know how many tomorrows we’ve got.
Certainly, friends of mine who have survived life-threatening illnesses are in no doubt that we should make the most of life while we can.

It doesn’t help when we read “expert” assessments of how much we need to live comfortably in retirement. The sums I often see quoted are wildly unrealistic for most people. They can be hardly be blamed if they give a helpless shrug and ask themselves why they should bother even trying. 
At the other end of the scale I see anxious letters to financial advice columns from people who have accumulated very substantial savings and are plainly terrified that they might end their lives in penury.

This tends to confirm my long-held view that the more money you’ve got, the more you’re likely to fret that it isn’t enough.
Fortunately we’re not presented with a stark choice between living a monastic existence of self-denial or going on a mad spending spree for fear that we might fall under a bus tomorrow. As with so many things in life, it’s a matter of balance and moderation.

There’s a sensible middle course and that’s the one I intend to take, if I’m allowed to by whatever mysterious forces control my life. It may mean forgoing a visit to Waiheke Island, but I can live with that.


Tell the Truth. said...

Here's tip.
Men who retire die.

Keep doing stuff. Have a reason to get up everyday.
I'm older than you and I still work hard and plenty of hours. Not a sport freek but enjoy what I do mostly. I just love business I guess. Staff maybe another matter but even they get enthused eventually.

Keeps you excited about life and right now I reckon in my and your lifetime we have never had so many exciting opportunities that we could grasp.

There is business everywhere for those that open their minds to the possibilities.

Sitting round thinking about being frugal and what little you can do today ain't exciting.

The money is great though. And unless the govt. go broke (always a possibility with their wasteful spending), it just keeps on appearing in the bank.

Brendan McNeill said...

Thankfully it doesn't cost much to become more reflective; an occupation granted to those who age gracefully. Enjoy your pay check and preferably without guilt. The theory is you have been paying into this system with your taxes over the years. I suspect you are a net contributor to the tax system, so in your case at least it's true.

And you are correct, we don't know what tomorrow holds albeit invasive surgery is to be avoided where possible!

May your latter years be blessed.

Jigsaw said...

There are lots of benefits of having a card proving that you are old. By travelling on your(g)old card at off peak times-which you must do, you enjoy peaceful travel without all the hustle of commuters. The trick then is to also avoid school holidays when all of the interesting and useful places are full of teens with over active hormones squealing and dancing around. Movies can be enjoyed without young people who often want to provide a commentary about the film which they imagine to be much more interesting than the film itself. A theatre with just a scattering of grey heads -most with coffees is much more fun and the slight guilt of watching a movie in the middle of the day passes quite quickly, it really does.

Karl du Fresne said...

An impeccably reliable informant tells me that the friend who drew up my travel schedule was wrong on one point: you can't use your Super Gold card to get free travel on the shuttle bus from Auckland Airport to the city.

JC said...

I'm past 70 and my suggestion is you buy a really nice car that allows you to travel anywhere you want in speed and comfort and never ever have to rely on the Gold Card for travel, accommodation and purchases.

When the invariably young people ask you if you have the Card act surprised and show genuine appreciation and then take advantage of it whilst making it clear that the savings were entirely generated by said young person.. I'm working on it and I hope to emulate my wife and leave these young people in a cloud of euphoria for having done such a nice thing for older people.. it helps balance the ledger for the arseholes that many of us are.