# What are you doing with your superannuation?



## Uncle Festivus (7 June 2008)

What are _you_ doing with _your_ superannuation? Interested in getting a feel for peoples outlook for superannuation now that it appears a lot of funds will show a negative return for this financial year. 

Is cash looking good for you right now?

What impact on the share market will converting your portfolio to cash have?

Or are you happy to ride this one out too?


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## Trembling Hand (7 June 2008)

Nothing. I have hardly ever been in the PAYE system so most of my super has been personal contributions. But I don't care how "tax effective" super is I have come to the realization that money put into my SMSF is the least effect use of my cash. And cannot see myself ever putting money in there again.

So maybe I shouldn't be even commenting but as for whats in there now. Let it ride. cashing out should be done at the top. For now thats gone.


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## So_Cynical (7 June 2008)

I was under the impression that doing anything with your super investment choices was useless after the fact.

Switching to cash anytime after December was pretty much locking in the losses. :dunno:


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## hangseng (7 June 2008)

Uncle Festivus said:


> What are _you_ doing with _your_ superannuation? Interested in getting a feel for peoples outlook for superannuation now that it appears a lot of funds will show a negative return for this financial year.
> 
> Is cash looking good for you right now?
> 
> ...




If you would have added "Dumped your managed fund and entered an SMSF and are more satisfied with your returns".

Then I would have checked that box. As it is their is no appropriate box to check for me.

Even with a downturn I am outperforming my old managed fund without effort. They have gone down another $4,000 on the closing account balance since I closed the account and I have increased the closing account balance by just over $12,000. That makes me now $16,000 in front of where I would have been with the "Fund Managers", of which I now believe is an oxymoron. They were doing me no favours along with the high fees they received for watching my fund go down.

I should have done this 5 years ago.


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## 2020hindsight (7 June 2008)

hangseng said:


> If you would have added "Dumped your managed fund and entered an SMSF and are more satisfied with your returns".
> 
> Then I would have checked that box. As it is their is no appropriate box to check for me.
> 
> ...



:iagree:
except that I should have done it 30 years ago


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## hangseng (7 June 2008)

2020hindsight said:


> :iagree:
> except that I should have done it 30 years ago




Excellent point! I should have also but didn't have the financial nouse to do so, let alone the means


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## stock nub (7 June 2008)

seeing as im 20 im spending it on BONGS AND BEER... 






and maybe a bit of shares lol


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## 2020hindsight (7 June 2008)

hangseng said:


> Excellent point! I should have also but didn't have the financial nouse to do so, let alone the means



excellent point 
didn't have the "nouse" as you call it - probably thought along the lines of stocknub lol - at least as far as the beer goes.  (I'm paying for it now though )   

would we do the same again ?
ahh that's one for another day.

PS these days most of my salary goes into my SMSF (salary sacrifice), and  15% tax is (significantly)less than my marginal rate.  

PS do i wish that my SMSF was in cash at the moment ? hell yes , Dow down etc - but, lol .... as usual , with the benefit of hindsight


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## hangseng (7 June 2008)

2020hindsight said:


> excellent point
> didn't have the "nouse" as you call it - probably thought along the lines of stocknub lol - at least as far as the beer goes.  (I'm paying for it now though )
> 
> would we do the same again ?
> ...




I have kept mine quite liquid and can move quickly. I will be taking advantage of any downturn, should to opportunity arise. I am actually doubting there will be though, except in a few stocks I have been watching at the blue chip end. This may be the last chance for an excellent entry into some quality blue chips for the long term.


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## 2020hindsight (7 June 2008)

hangseng said:


> I have kept mine quite liquid and can move quickly. I will be taking advantage of any downturn, should to opportunity arise. I am actually doubting there will be though, except in a few stocks I have been watching at the blue chip end. This may be the last chance for an excellent entry into some quality blue chips for the long term.



Don't talk to me about excellent "entries" m8,   I'm already "inside" lol.

my problem is I listened to my neighbour at the fence
"to buy on bad news, sell on good" and win
whereas in fact , it should be the reversed-about-sequence 
to "sell on good news, THEN on bad buy IN"


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## mfp (8 June 2008)

My work super is a defined benefit super, the eventual payout figure will mainly be determined by my years of service, average contribution rate and final average salary. The stock market has very little impact on it. It only affects the returns on my personal contributions, not my employer's, and the more I contribute the more my employer does. I don't have the option of choosing the asset/risk class anyway for my contributions. I also have a private super which has been in cash for over a year.


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## explod (8 June 2008)

hangseng said:


> If you would have added "Dumped your managed fund and entered an SMSF and are more satisfied with your returns".
> 
> Then I would have checked that box. As it is their is no appropriate box to check for me.
> 
> ...





I am in the same boat.   I trade within my DIY with the maximum tax on capital gains being 15%    I hold physical bullion within my Super Fund also and the last 6 months apart from some specs have been light on shares.  

A well set up super fund becomes a money tree once you reach 60 years.

After some bad experiences, becoming my own adviser was one of the great turning points in my life.


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## nizar (8 June 2008)

I'll start thinking about super once I'm >30.
For now the money I have is what I will need over the next 5 or so years to buy a house, business, etc.

Age 60 seems way too far away for me right now.


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## explod (8 June 2008)

nizar said:


> I'll start thinking about super once I'm >30.
> For now the money I have is what I will need over the next 5 or so years to buy a house, business, etc.
> 
> Age 60 seems way too far away for me right now.




Absolutely.  But all those little bits of super that you can pick up from employers, keep tabs on them and consolidate as you go along.   60 comes round very fast, unfortunately.    

However if I had been interested in share trading and financials at 30 I would have had no concern for super either.    If you can aim for the wisdom of a 60plus by the time you are 40 you will have it made.   Not inferring by that, that I am wise, just an old codgers take.


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## prawn_86 (8 June 2008)

nizar said:


> I'll start thinking about super once I'm >30.
> For now the money I have is what I will need over the next 5 or so years to buy a house, business, etc.
> 
> Age 60 seems way too far away for me right now.




Same here Nizar,

I dont trust something that is 40+ years away, who knoiws what will happen by then



explod said:


> Absolutely.  But all those little bits of super that you can pick up from employers, keep tabs on them and consolidate as you go along.   60 comes round very fast, unfortunately.
> 
> However if I had been interested in share trading and financials at 30 I would have had no concern for super either.    *If you can aim for the wisdom of a 60plus by the time you are 40 you will have it made*.   Not inferring by that, that I am wise, just an old codgers take.




Also agree here Explod.

I have consolidated all my bits and pieces, but it still gets eaten up in fees as there simply isnt enough. Once i graduate i will seriously look at the right fund etc

The part i have bolded is my aim. I have learnt so much now and im not 21 yet, so im am already ahead of the vast majority of people. Now i just need to continue to build my knowledge and my portfolio will follow (hopefully )


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## robots (8 June 2008)

hello,

the big issue is the tax free environment of super and one which I am grappling with at the moment coming up to 1 july

if you look at super as the "ultimate" life savings account ie. only 15% when goes in and no tax when in then, it must seriously be considered above keeping money in shares/whatever outside of super acc.

but the lock away factor is a concern!

thankyou

robots


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## Uncle Festivus (8 June 2008)

To clarify a bit, I was interested in the money flows within the managed fund accounts as most of them allow you to choose between growth, income, real estate or cash etc. So any swaps between the asset classes going on, mainly to cash??

Also, those that will put more in (top up), what are your reasons? If returns are going negative why would you do this, apart form the tax implications?


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## 2020hindsight (8 June 2008)

Uncle Festivus said:


> Also, those that will put more in (top up), what are your reasons? If returns are going negative why would you do this, apart form the tax implications?



Unc
Think I proposed / discussed that one as well - you're right , what is right for one agegroup is not necessarily right for others.   "Talking bout my generation" as the song goes...  I should have explained that I'm also explod's age, and after 60 you'd be crazy not to put most of your salary into your superfund - especially if it's self-managed - since you can draw on it pretty much at will. 

And I agree with the 20-30-40-50 year olds, putting money directly into a mortgage is (obviously sheesh) one hell of an investment as well - always assuming you bought a house where things are appreciating etc - i.e. anywhere other than Oodnagalarby


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## explod (8 June 2008)

2020hindsight said:


> - always assuming you bought a house where things are appreciating etc - i.e. anywhere other than Oodnagalarby





Well; if its got good dirt and a creek with some water running through it Oodnagalarby will soon go through the roof.

For the 50 year plusses do some reading on DIY Super.   Some good books, one I got recently via ASF bookshop.   Some fianacial planning services can help with the setting up.  Once you understand it and set up, you just need the right accountant to ensure full compliance with legals on it and an independant annual audit.   Total fees I now pay is less than a grand p/a, but in the beginning you need to pay for the right people.   

Plenty of research before you embark will put you on the right track.


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## Julia (8 June 2008)

I'm not suggesting this is happening on this thread, but there is still widespread confusion about "Super".   Many people express disappointment with Super as an entity, failing to understand that Super is simply a vehicle to carry various choices of investment in a favourable tax environment.

  I was talking to a couple recently who complained that their Super had hardly grown at all, despite several years of a bull market.   Why?  Turns out they had chosen the very conservative option and it was mostly in cash, returns from which had been eaten up by the fees!

Personally I much prefer the SMSF option - returns have been far better, I like making my own decisions, and don't have the resentment about the ongoing fees.  (Just have to contend with shonky accountants!)

I'm about 80% in cash at present.


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## nizar (8 June 2008)

explod said:


> If you can aim for the wisdom of a 60plus by the time you are 40 you will have it made.




Will that's the aim, and where I hope my edge will lie compared to the masses. By the time Im 40 I would have had about 20years experience in the markets.

Thanks for your thoughts.


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## tech/a (8 June 2008)

A really important topic for all regardless of age.

Firstly I think it imperative that you have a SMSF if you have a fair size nest egg.
I also think it very important to have the right management of the fund in terms of its use and flexibility. Having sat through a 4 hr meeting recently with My CPA,I'm simply gob smacked at how their clever use of the SMSF in conjunction with other investments,trusts etc can give you massive return from not only tax saving but also from distribution of funds (One of us is 55)
to diminish gearing elsewhere in un related investments.

Ultimately the combination of "Smarts" which we are all continually working on and Professional help--when self managed,can and does have a tremendous effect on our returns.

So I applaud anyone who has progressed to self management.


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## xyzedarteerf (8 June 2008)

i have added just under 20k since starting on SMSF on Jan 08 so no complaints here. like most I should have done this years ago, im still in my 30's.


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## MRC & Co (8 June 2008)

I recently merged my superannuation accounts (3 of them), to diminish fees.  

However, I found out my PSS superannuation cannot be merged due to some legal technicality.  Anybody know a anything about this?  I argued it, but got nowhere.  Sounds rediculous to me to HAVE to pay 2 sets of fees and eventually, as it is a small amount (only several grand), it will be eaten up by fees and end up worthless!

In regards to the question, I have allocated nearly all my superannuation (as small as it is), towards high growth investments, being only 25, volatility is not a big deal to me, so I assume (at least based on historical trends), the high growth option would generate higher average returns over the longer term.


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## fourth (8 June 2008)

I took control of my super about march last year. Initially, that was just using the AMP website to move 100% in to Macquarie Small Caps. Once sub prime start messing with the markets I moved the balance in to cash and setup a SMSF and managed to avoid too much of a hit. I was relatively lucky with the timing of my exit from the markets. I also used supertrace to 'find' a 30% increase.

A few minutes ago I was screening small cap miners. My theory is, even if I lose money, it'd be money the fund manager would have lost anyway, and I buy training in the process.

So far, the SMSF is at 270% of what it was at the beginning of last year (I can not attribute much of that increase to my trading  just moving in and out of the market at the right time + supertrace's bonus). 

To anyone who thinks SMSF's are a waste of time, ask yourself. Which money can you afford to lose training up? A chunk of your super or your home deposit?


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## bvbfan (17 June 2008)

MRC & Co said:


> I recently merged my superannuation accounts (3 of them), to diminish fees.
> 
> However, I found out my PSS superannuation cannot be merged due to some legal technicality.  Anybody know a anything about this?  I argued it, but got nowhere.  Sounds rediculous to me to HAVE to pay 2 sets of fees and eventually, as it is a small amount (only several grand), it will be eaten up by fees and end up worthless!




Technically the PSS don't pay fees, as the fees are paid from earnings prior to being declared and credited to your fund. (if i remember correctly)


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## MRC & Co (17 June 2008)

bvbfan said:


> Technically the PSS don't pay fees, as the fees are paid from earnings prior to being declared and credited to your fund. (if i remember correctly)




Yeh, they told me that too, but isn't that the same difference to my bottom line?  

Instead of paying fees, you just gain a smaller % return?


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## bvbfan (20 June 2008)

Yes and yes....but if earnings are nothing then do they get paid the fee?

Hmmm

There are only 7 funds to transfer into so it's pretty much locked to them.

Sorry can't remember (but don't think) there is any way to get PSS to PSSap which could then be transferred.


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## MRC & Co (20 June 2008)

bvbfan said:


> Yes and yes....but if earnings are nothing then do they get paid the fee?
> 
> Hmmm
> 
> ...




Yes, good question, not sure if it's meant to be rhetorical.......

Ah well, it's only a small sum anyways, most of mine is with the other fund now.  No way I would transfer them all to PSS either, doesn't compare with some of the others like AGEST as far as my research led me to believe.  

When you leave for the game BVB, just doing a daytrip?  

Thanks anyways champ.


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## brianwh (4 September 2008)

I am investigating the implications of moving from a wrap account organised through a FP to a SMSF - but timing is the dilemma. To make the move I have sell down the Funds the FP has put me in (they are mainly with Dimensional Funds which can only be accessed through a FP licensed to Dimensional and then through a Wrap Account) which would mean crystallising losses. This doesn't seem a very good strategy but paying more than 1% of the value of assets under mangement for this arrangement and then seeing some of these funds exceed benchmark losses is a bit hard to tolerate. And of course the funds themselves are taking their fees as well.

At this stage, as I am an allocated pension phase I will probably take the conservative approach and wait until there are more positive signs both here and abroad. But I'm not happy.

Would appreciate any thoughts. I am sure I am not the only one in this predicament.


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## Julia (8 June 2009)

There have been hints here and there in the media recently about the government wanting access to superannuation funds.

They need money for infrastructure into the future.

Here is an article by Alan Fels on the possibility of long dated bonds which effectively provide a guaranteed pension.

Doesn't sound like a bad idea for some people.  I'd be interested to know what people think.

http://business.smh.com.au/business...d-pension-incomes-for-sale-20090529-bqbx.html


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## Miner (8 June 2009)

I am yet to be able to access my Super and hoping government will not put any inhibitor to access it.

With that assumption my plan is to part of my super to pay off my mortgage and becoming a true debt free person.


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## prawn_86 (8 June 2009)

Im young and i dont trust the gov to keep the rules the same so that in 40 years time i will still have access to all, or any, of my super.

For that reason i dont salary sacrifice, co-contribute etc etc. I would rather have the moeny where i can access it, as opposed to locked away for 40 years and no assurance of being able to access it when that time comes.


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## BradK (8 June 2009)

Julia said:


> There have been hints here and there in the media recently about the government wanting access to superannuation funds.
> 
> They need money for infrastructure into the future.
> 
> ...




As a teacher, I'm amazed about the super schemes of some of the old chalkies. Some of the casuals that come through here have a 80% of their income indexed type scheme that passes to their spouse on death - and they pick up one or two days per week casual at $300 per pop. Great stuff. 

Ross Gittins wrote an article once about how the risk of super has shifted from the company/ government to the worker through the superannuation scheme. 

I know guys around here who also wanted to retire in two years time, who now, because of the last two years have to wait another 5, 6 or 7 years. 

I also see guys who have retired, blown their super accounts in a divorce settlement and are back at school working well beyond their 60s and no joy on the horizon. 

If anything, seeing all of these cases makes me realise that setting yourself up for retirement is extremely important. The 80% case study above just got back from three weeks in Hawaii and just loves being around the kids saying it makes him feel young. His wife is always in at the school volunteering for this and that. 


So, Julia - how do I go about 'buying' an indexed pension for life at 60% of my pre-retirement income which will pass to my wife on death? Can I pay it off over the next 30 years? Is this what Mr Rudd is driving at? If he is, count me in! 

Or is it better drip feeding $100 per week into QBE, BHP, WOW and RIO for the rest of my life and leaving it there? Unless in 2039 we have a 2008 type event? 

Cheers
Brad


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## jono1887 (8 June 2009)

prawn_86 said:


> Im young and i dont trust the gov to keep the rules the same so that in 40 years time i will still have access to all, or any, of my super.
> 
> For that reason i dont salary sacrifice, co-contribute etc etc. I would rather have the moeny where i can access it, as opposed to locked away for 40 years and no assurance of being able to access it when that time comes.




same here.. considering ill have almost 50 years til ill even reach the age where the money is accessable, i could get hit with a few surprises when its time to get it out. The best option would be to save it on your own and forget about the tax concessions that you get with super. Its too high of a risk making voluntary contributions at our age.


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## Bill M (8 June 2009)

prawn_86 said:


> Im young and i dont trust the gov to keep the rules the same so that in 40 years time i will still have access to all, or any, of my super.
> 
> For that reason i dont salary sacrifice, co-contribute etc etc. I would rather have the moeny where i can access it, as opposed to locked away for 40 years and no assurance of being able to access it when that time comes.




Hello Prawn, I fully understand this sentiment and I wouldn't trust the government in your case either. Back in the late 80's early 90's everyone was pushing super, they went to great lengths to tell you why you should put in as much as you can. They said the more you put in the bigger the package and then you can retire at 55 years and live happily ever after. Then you know what they did? They government of the day at the stroke of a pen upped the preservation age from 55 y/o to 60 y/o. That kicked in if you were born after July 1960. For those that were promised that big retirement at 55 it now all of a sudden will not happen, they were lied to and now they must work until 60.

The only reason I am putting in a bit of money into super now is to minimise my tax and also I am not far from getting that money. I have less chances being stuffed up by the government. But who knows what the pollies will do next, I like you do not trust them.


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## Smurf1976 (8 June 2009)

prawn_86 said:


> Im young and i dont trust the gov to keep the rules the same so that in 40 years time i will still have access to all, or any, of my super.
> 
> For that reason i dont salary sacrifice, co-contribute etc etc. I would rather have the moeny where i can access it, as opposed to locked away for 40 years and no assurance of being able to access it when that time comes.



Likewise. I've only ever had the compulsory employer contribution and I don't intend ever contributing any of my own funds simply because I just don't trust government - they could raise the preservation age to 100 just like that if they wanted to.


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## Krusty the Klown (8 June 2009)

On average, there has been one change to the superannuation rules every week since 1992. So you can bet my big fat klown behind the rules will keep changing way in to the future. It's an ever evolving animal.

The biggest impact I can foresee is tax on the way out. Currently its tax free over 60, but now we are going in to a budget deficit and the tax base is shrinking. It might take 10 or 20 years, but I can see the tax on the way out starting gradually and then increasing over time.


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## nathanblack (8 June 2009)

considering i want early retirement(very early) i wont be able to touch my super for many years. i sometimes make addition contributions(at some point i'll get it and its worth it), but id rather sacrifice the tax advantage to access the money now. i keep as much capital available not in super or SMSF, i dont want to be bound by what i can invest in or when i can draw down and for what purpose.

anyone planning for early retirement must have there own funds, preferable not just equity in there home. obviously you only need money to survive from early retirement until actual retirement age, you can then access super.

as the age keeps getting pushed up i would assume most people are planning early retirement , even if only a few years.


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## Julia (8 June 2009)

Krusty the Klown said:


> On average, there has been one change to the superannuation rules every week since 1992. So you can bet my big fat klown behind the rules will keep changing way in to the future. It's an ever evolving animal.
> 
> The biggest impact I can foresee is tax on the way out. Currently its tax free over 60, but now we are going in to a budget deficit and the tax base is shrinking. It might take 10 or 20 years, but I can see the tax on the way out starting gradually and then increasing over time.



Yes, I agree that taxing income in the pension phase is probably going to happen.   Initially I'd guess they'd introduce a tax on amounts over $x p.a., then it will creep lower.  I hope I'm wrong.



BradK said:


> Ross Gittins wrote an article once about how the risk of super has shifted from the company/ government to the worker through the superannuation scheme.



Unless, of course, you're a politician.  Then all the risk falls back to the tax payer, given that the pollies' super is a defined benefit scheme which gathers a 15% contribution from the loyal taxpayers, and guarantees the amount paid as a pension.   Grrr!










> So, Julia - how do I go about 'buying' an indexed pension for life at 60% of my pre-retirement income which will pass to my wife on death? Can I pay it off over the next 30 years? Is this what Mr Rudd is driving at? If he is, count me in!



Brad, I only skimmed the article before posting it but that was what I gathered was being offered.  We don't, of course, know the 'purchase terms' of such a pension, but I'd think any income stream which is government guaranteed is going to be pretty popular.

I have a small lifetime annuity through Challenger.  It's fine, but if the same were available from the government, then you'd have to consider that safer than through any private company.





> Or is it better drip feeding $100 per week into QBE, BHP, WOW and RIO for the rest of my life and leaving it there? Unless in 2039 we have a 2008 type event?



Well, of course the attraction of putting those same investment dollars into those same companies via Super is the tax advantage.

But if I were the age of Prawn and Jono I'd definitely be prepared to sacrifice that tax advantage for the benefit of remaining in control of my funds, as they've both indicated.  

As a policy I completely agree with the compulsory super because a huge number of people would otherwise fail to save anything towards their retirement, but for young people there is just too much history of governments behaving badly to put in any more than the required amount.


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## rell (17 March 2010)

We are nine months on since the last reply to this thread.
Does anyone think a person in their mid fifties should be gearing in their super fund? 
With the market rebounding so high off the March lows of 2009 and trending sideways at the moment I would think not.


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## Bill M (27 March 2010)

rell said:


> We are nine months on since the last reply to this thread.
> Does anyone think a person in their mid fifties should be gearing in their super fund?
> With the market rebounding so high off the March lows of 2009 and trending sideways at the moment I would think not.




I would not gear my normal investments let alone my Super Fund. My Super Fund has to last me the rest of my life and to try and get an extra couple of % by gearing is just too high a risk for me. Steady as she goes for this old tanker...


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## So_Cynical (27 March 2010)

I did some investment allocation switching in one of my super accounts back in  March 09, i decided to go 45% Aust shares, 45% high growth and 10% Property...i used to have 100% in Balanced.

Got a statement the other day and was happy to see that by switching 45% to Aust shares i had recovered all the losses from 07 - 08 as my money allocated to Aust shares had grown by 34%, High growth returned 14% and property 5%

I Know a guy at work in his mid 40's with 100% of his super money in the colonial Aust shares geared fund...hes doing really really well.


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## DocK (27 March 2010)

So_Cynical said:


> I did some investment allocation switching in one of my super accounts back in  March 09, i decided to go 45% Aust shares, 45% high growth and 10% Property...i used to have 100% in Balanced.
> 
> Got a statement the other day and was happy to see that by switching 45% to Aust shares i had recovered all the losses from 07 - 08 as my money allocated to Aust shares had grown by 34%, High growth returned 14% and property 5%
> 
> I Know a guy at work in his mid 40's with 100% of his super money in the colonial Aust shares geared fund...hes doing really really well.




Have most of our smsf invested in the factory that our business rents from it - bought at the right time for the right price so am happy with the unrealised capital gain on it.  The rental proceeds are invested in a Colonial fund - half Aust Shares and half Geared Aust Shares - very happy with returns over past year, but am poised to switch it into the fixed interest option if weakness should set in.  We're mid 40's.  Goal is to buy another property in next few years and continue investing rental receipts on both properties.  I prefer to have both property and share investments in our smsf so that hopefully we'll one day have an income stream from both.


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## Julia (4 April 2010)

The number of self managed Super Funds is growing every year.
No wonder when you see the results from the public funds.

The following are the average annual return for the past five years:

Goldman Sachs JBWere Superannuation Fund 9.6%
Worsley Alumina Superannuation Fund  6.8%
Commbank Officers Super Fund  6.3%
PostSuper   6.2%
Catholic Super  6.1%
UniSuper  5.7%
Suncorp Staff Super  5.6%
Maritime Super   5.5%
Electricity Supply Super Qld  5.5%
Health Super  5.4%

Hardly an endorsement of the skills of the so called professional managers.


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## So_Cynical (4 April 2010)

Julia said:


> The number of self managed Super Funds is growing every year.
> No wonder when you see the results from the public funds.
> 
> The following are the average annual return for the past five years:
> ...




Half the problem is that so many funds just don't provide enough investment options, one of the funds im now trying to leave is TWU super, they have 3 investment choices, cash, balanced and high growth...that's it....and get this, they offer members 1 free financial planning consultation per year, and yet offer no real choices...im guessing the financial advice is pretty limited. 

There's 10's of 1000's of people stuck in these no choice funds with there money going nowhere...and that seems to be ok for so many people.


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## Julia (4 April 2010)

So_Cynical said:


> Half the problem is that so many funds just don't provide enough investment options, one of the funds im now trying to leave is TWU super, they have 3 investment choices, cash, balanced and high growth...that's it....and get this, they offer members 1 free financial planning consultation per year, and yet offer no real choices...im guessing the financial advice is pretty limited.
> 
> There's 10's of 1000's of people stuck in these no choice funds with there money going nowhere...and that seems to be ok for so many people.



Good point.  I understand most people take the default option of a Balanced fund.
The stats I quoted would have been more meaningful if they'd included a breakdown of the results over five years for each of the three investment choices you list.
I just found it pretty amazing that the returns were so low, given that during that five year period there was a sustained and healthy bull market, but your explanation of the investment choices goes a good way to explaining that, I guess.

I don't mean to ask an intrusive question, so ignore this if you wish, but I'm wondering why it's so hard for you to exit the Fund you're unhappy with.
I thought the government introduced legislation quite a while ago to allow people to move out of and into different funds?


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## Garpal Gumnut (5 April 2010)

More in cash than ever before.
I've started spending it. 

gg


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## So_Cynical (5 April 2010)

Julia said:


> I don't mean to ask an intrusive question, so ignore this if you wish, but I'm wondering why it's so hard for you to exit the Fund you're unhappy with.
> I thought the government introduced legislation quite a while ago to allow people to move out of and into different funds?




Some funds seem to not want to let go :dunno: im also being a little stubborn with the situation...to switch funds you need your employer to provide a termination date and a ID form filled out and witnessed by a qualified person.

Now my previous employer didnt provide the date of termination and they (TWU Super) didn't like my qualified witness as they said his name was not legible...anyway i spit the dummy immediately and wrote to there complaints dept stating that they had 90 days to resolve the issue or i would make a formal complaint thru the superannuation complaints tribunal.

The 90 days is a requirment of the superannuation complaints tribunal...the 90 days is up on the 25 of April.


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## BradK (5 April 2010)

Stupid question here. 

Can my compulsory contributions from my employer go into my own SMSF? How do I set it up? Or only voluntary contributions? 

Brad


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## Julia (5 April 2010)

Not at all a stupid question, Brad.  It appears so.
http://www.investsmart.com.au/super/basics.asp?ArticleID=140


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## BradK (5 April 2010)

Julia said:


> Not at all a stupid question, Brad.  It appears so.
> http://www.investsmart.com.au/super/basics.asp?ArticleID=140




Many thanks Julia, I did some research, and they think that I need at least $100,000 in super in order to make it worthwhile. Below that, the wisdom says, and the fees/ admin are too high. 

THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k? 

Brad


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## waza1960 (5 April 2010)

> THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k



     You can do it when ever you want thats just what the industry says
      its a load of crap IMO perpetuated by the industry.
      I started my super fund back in 2002 with less than 60k no problems
I paid less fees / year than my old Super fund was charging.
Of course you can get the compulsory employer contributions paid in.


> Some funds seem to not want to let go  im also being a little stubborn with the situation...to switch funds you need your employer to provide a termination date and a ID form filled out and witnessed by a qualified person.



   The rule here unfortunately not the exception the big super funds generally make it as tedious as possible to remove your money using government regulations as an excuse.They would have to qualify for an award as having the most inefficient administration practises around . 
A lot of them won't even allow online payments they still insist on cheques sent in the mail but I guess its not there money so why be efficient?


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## So_Cynical (5 April 2010)

BradK said:


> Many thanks Julia, I did some research, and they think that I need at least $100,000 in super in order to make it worthwhile. Below that, the wisdom says, and the fees/ admin are too high.
> 
> THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k?
> 
> Brad




http://www.esuperfund.com.au/
SMSF Setup Fee   :  FREE
SMSF Annual Fee :  $599 Fixed
Includes the SMSF Audit 

The question is can you make enough money trading via your SMSF to cover the 300 or 400 in extra costs?


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## tech/a (5 April 2010)

Went SMSF when the govt kindly let us place $200K a year in it for a few years then $100K. Property is my investment choice for super---freehold and I rent my own business property.

Anyway the problem is well beyond saving a nest egg super.
Lets say you are going to live to 90 and evidently according to Julia's Questionaire a few may well get there saving accident.

So we get to 55-65 and decide to retire.
Unless we have a passive income geared to increase with inflation our super is going to evaporate in around 10 yrs.

Planning for super should be way beyond just accumulating cash which is one of the quickest assets to erode.

Just my opinion.


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## Bill M (5 April 2010)

Julia said:


> I don't mean to ask an intrusive question, so ignore this if you wish, but I'm wondering why it's so hard for you to exit the Fund you're unhappy with.
> I thought the government introduced legislation quite a while ago to allow people to move out of and into different funds?




Hello Julia and So_Cynical, in the last 8 years I have changed my super fund 4 times. On each occasion it was only a matter of downloading and filling out a rollover form which was on the Super Funds website that I wanted to join. *Nobody ever rang me or asked any questions for any of the events*. Usually by the time it had all been completed it was not more than 4 weeks. The last time was last year, this time they wanted a copy of my license witnessed by a JP as a true copy for ID. Apart from that the matter was all over and done in 4 weeks.


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## Bill M (5 April 2010)

tech/a said:


> So we get to 55-65 and decide to retire.
> Unless we have a passive income geared to increase with inflation our super is going to evaporate in around 10 yrs.
> 
> Planning for super should be way beyond just accumulating cash which is one of the quickest assets to erode.



This is true however, lets use the example of a 60 y/o couple with $1 Million in a Super cash account earning 8% p/a. (This was possible with a Westpac Term Deposit last Month). The couple only need 40k to cover all their expenses for a year, including everything. They only withdraw the 40k per year and the other 40k keeps earning interest with the other $1 Million already working for you. In this case your capital is building each year and there is no need to take risks by buying assets such as shares or property. GFC's or Property crashes would not concern these investors.


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## So_Cynical (5 April 2010)

Bill M said:


> This is true however, lets use the example of a 60 y/o couple with $1 Million in a Super cash account earning 8% p/a. (This was possible with a Westpac Term Deposit last Month). The couple only need 40k to cover all their expenses for a year, including everything. They only withdraw the 40k per year and the other 40k keeps earning interest with the other $1 Million already working for you. In this case your capital is building each year and there is no need to take risks by buying assets such as shares or property. GFC's or Property crashes would not concern these investors.




And that's great if you own your house and have a million in your super account, however according to this story form late 09 the average super punter is a long way short of that figure.



			
				Heraldsun said:
			
		

> SUPERANNUATION funds are forecast to grow by an average 8 per cent a year for the next five years, although the average balance is still only tipped to be *$78,000* by 2014.




http://www.heraldsun.com.au/money/s...nce-to-hit-78000/story-e6frfh5x-1225804475249


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## tech/a (5 April 2010)

Bill M said:


> This is true however, lets use the example of a 60 y/o couple with $1 Million in a Super cash account earning 8% p/a. (This was possible with a Westpac Term Deposit last Month). The couple only need 40k to cover all their expenses for a year, including everything. They only withdraw the 40k per year and the other 40k keeps earning interest with the other $1 Million already working for you. In this case your capital is building each year and there is no need to take risks by buying assets such as shares or property. GFC's or Property crashes would not concern these investors.




Fine if there was no inflation.

35 yrs ago my Father retired with enough to buy 12 houses.
Say 12 x todays average of $350K so thats pretty substantial.
It was around $500K
Today hes simply a pensioner.


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## Julia (5 April 2010)

BradK said:


> Many thanks Julia, I did some research, and they think that I need at least $100,000 in super in order to make it worthwhile. Below that, the wisdom says, and the fees/ admin are too high.
> 
> THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k?
> 
> Brad






So_Cynical said:


> http://www.esuperfund.com.au/
> SMSF Setup Fee   :  FREE
> SMSF Annual Fee :  $599 Fixed
> Includes the SMSF Audit
> ...



Brad, So Cynical has given you the costs for Esuperfund which support the suggestion that the commonly offered advice from the financial industry that you need at least $200K is not necessarily true.  It's difficult not to interpret industry advice as being self interested, i.e. if everyone were to go the SMSF way, they'd be struggling for an income!

I'm sure you can way exceed the costs of the annual SMSF fees by your own efforts, even with such a low base.




So_Cynical said:


> And that's great if you own your house and have a million in your super account, however according to this story form late 09 the average super punter is a long way short of that figure.
> 
> 
> 
> http://www.heraldsun.com.au/money/s...nce-to-hit-78000/story-e6frfh5x-1225804475249



It's true that at the present time the average super holder has way less than he/she needs to retire.  It's imo a good case to increase the compulsory contribution to 15%.  We need to bear in mind, though, that compulsory super hasn't been in effect long enough (introduced by Paul Keating in 1992) to reasonably expect that those retiring in the next decade or so will have enough.



tech/a said:


> Fine if there was no inflation.
> 
> 35 yrs ago my Father retired with enough to buy 12 houses.
> Say 12 x todays average of $350K so thats pretty substantial.
> ...



That's very surprising, Tech/a.   Did he in fact buy the 12 houses (in which case the capital appreciation alone, without considering rental income) should have increased his worth very considerably in 35 years?  Or did he stick the money in the bank?
Hard to see that $500K 35 years ago if well managed should have led to him having nothing today.


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## tech/a (6 April 2010)

> That's very surprising, Tech/a. Did he in fact buy the 12 houses (in which case the capital appreciation alone, without considering rental income) should have increased his worth very considerably in 35 years? Or did he stick the money in the bank?
> Hard to see that $500K 35 years ago if well managed should have led to him having nothing today.




He bought a hobby farm 42 acres.(Still has it)
He was a butcher and ran a few head and even worked on a casual basis.
While today his net worth is higher. His liquid capital is skint.
Try telling an independant fitish 86 yr old that he should buy something smaller and enjoy life----to him he is and in his words--"they will cart me out of here in a box."

Sure some bad (emotional) choices
it would seem--but--


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## johnnyg (6 April 2010)

tech/a said:


> Fine if there was no inflation.
> 
> 35 yrs ago my Father retired with enough to buy 12 houses.
> Say 12 x today's average of $350K so that's pretty substantial.
> ...




Also imagine the 12 x $300 per week rent. Pretty substantial wage a week compared to the $200 per week pension.


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## tech/a (6 April 2010)

johnnyg said:


> Also imagine the 12 x $300 per week rent. Pretty substantial wage a week compared to the $200 per week pension.




Had he done that and rented one for himself and Mum sure---he didnt!
How many would?
His thinking at the time was Buy farm freehold and with plenty left to live happily ever after. $200 a week was enough to live very comfortably particularly working part time and running a few head of cattle.

Today thats a couple of tanks of Gas!
Let me tell you it opened my eyes!


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## johnnyg (6 April 2010)

And mine too. There's some great advice in there tech, some I'll pass onto my own parents.


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## tech/a (6 April 2010)

johnnyg said:


> And mine too. There's some great advice in there tech, some I'll pass onto my own parents.




Just drop it into the conversation as something to think about.

You know what parents are like---know everything---
I have the same problem with my kids---they know everything!

The final conclusion is that there must be people who know something who arent kids and have never had any!

Its all in the delivery---something I'm still learning---even on forums!


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## kincella (6 April 2010)

I would add some food for thought for all the players.....

the dollar devalues with inflation...I have seen figures of 70-100 years and less, where the value of the dollar has decreased by 95%
the dollar tomorrow buys less than it did today, for the same item
you need an asset that will keep pace with inflation....
as in property
the cash in the bank will be ok for a bit, so long as you dont spend the interest it earns, and you plough it back into the deposit.....but the whole point of the project is to provide an income in retirement

so lets do a quick exercise....most will retire around aged 
55-60, leaving you to fund your income for the next 30 years
so do a quick calculation, if you plan on having 500k to earn 5%
that is 25,000 income a year.....but over the next 30 years, the buying power will have reduced by one third, so half way thru the 30 year period, still earning 25,000 pa , will buy you about 12500.....and by the end it will be almost worthless
property, on the other hand should keep pace with inflation, and the rental income should match it...with growth

an easy way to check to see how much the dollar devalues...
just look at house prices....
back in the 80's you could buy a median house for about 100k's, the same house today is worth 450k's.....
compare that with a cash deposit...for the same period....you would be underwater by 350k's in buying power or earnings...

one needs to save at least 10% of their income, for life, to overcome the problem...even then I doubt too many today will have 500k's set aside


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## Bill M (6 April 2010)

tech/a said:


> Fine if there was no inflation.
> 
> 35 yrs ago my Father retired with enough to buy 12 houses.
> Say 12 x todays average of $350K so thats pretty substantial.
> ...



There is no doubt in my mind that 12 x houses would go a lot further than squirrelling away 4% of the income. Some people are just frightened about risk, any risk.  I would have thought though that with an average inflation of 4% p/a that the capital build up you are doing each year by reinvesting 40k of the income would take care of that. Potentially that $1 Million would be over $1.2 Million in 5 years time and in the mean time you are still living pretty well.

About your Father, there are plenty of Pensioners living in Million $ houses/properties and just won't sell up and downsize. I've asked a few about this from time to time and they usually say they want to leave something for the kids, their choice I guess.


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