# Superannuation - a good thing?



## tothemax6 (6 March 2011)

Hi All,

Looking for some opinions on superannuation as a concept, rather than any specifics within superannuation itself. 
I personally disagree with the entire concept. I think people should be free to do with their money as they wish _now_, and not be forced by the government to have a specific amount of their money held for a certain amount of time. I think the whole superannuation industry is simply a big distortion of the market, a government protectionist racket, and that the whole industry would not exist in a free-market given their typical returns records (the government published an excel spreadsheet detailing this, hard to find it now so no link I'm afraid).

The whole premise of superannuation is that free men are not capable of taking care of themselves and their families, that they are base creatures with time-preferences that are too high for their own good, and who will simply starve to death when they can no longer work - or start begging for a pension from the government. On the face of it, whilst we all accept the existence of government enforced super, the entire thing is disgusting, immoral, patronizing, and dictates that the government is your guardian, and you, a grown man or otherwise, are one of its helpless little children. 

Thoughts...


----------



## moreld (6 March 2011)

tothemax6 said:


> The whole premise of superannuation is that free men are not capable of taking care of themselves and their families, that they are base creatures with time-preferences that are too high for their own good, and who will simply starve to death when they can no longer work - or start begging for a pension from the government.




As history almost 100% supports that statement as true, I see no option but to totally disagree with your premise that super is bad. 98%+ of people throughout Western history have shown they are incapable of saving for their retirement and that's from periods of time when the average life expectancy of people post work was considerably lower than it is now. 

Superannuation is one of the greatest thing Australia has to offer it's citizens. While it may not be perfect and is certainly susceptible to tampering and theft by future governments it will not only provide a better quality of retirement for the majority it will take the burden off the government and as importantly removes those funds from their direct control to waste. Super also provides a growing pool of funds to our corporate sector which as time progresses will be an engine of growth for Australia.

The only other feasible alternative is  Carousel from Logan Run ;-)


----------



## tommymac (6 March 2011)

I have to agree with moreld.  

While I personally would like to have the option to have the money in my hand at this point in life to help repay my mortgage, most people would choose to spend the money.  This is proven by the level of credit card debt we already have in Australia.

In addition, if people were not putting away for their retirement (most people only start thinking about retirement after the age of 40), our personal tax would increase by approx the same amount so the Government would have the money to support all those people who do not help themselves.


----------



## tothemax6 (6 March 2011)

moreld said:


> As history almost 100% supports that statement as true, I see no option but to totally disagree with your premise that super is bad. 98%+ of people throughout Western history have shown they are incapable of saving for their retirement and that's from periods of time when the average life expectancy of people post work was considerably lower than it is now.



Well, thankyou for providing a polar opposite point of view, it will certainly kickstart this debate . Firstly, is there a source for these numbers? 100%, 98%+!!??!  You aren't exactly building a case for your credibility .


moreld said:


> Superannuation is one of the greatest thing Australia has to offer it's citizens. While it may not be perfect and is certainly susceptible to tampering and theft by future governments it will not only provide a better quality of retirement for the majority it will take the burden off the government and as importantly removes those funds from their direct control to waste. Super also provides a growing pool of funds to our corporate sector which as time progresses will be an engine of growth for Australia.



Interesting definition manipulation - 'offer' its citizens? You consider "by law x% of your salary will be withheld from your possession until we see you reach an age we set" as an 'offer'? Would you include "give me your money or ill hit you" as an 'offer' . 

But I guess this pales in comparison to your monstrous idea that it is a good thing when "the government importantly removes peoples funds from our direct control to waste".

You are a monster , and I am keen to hear the rest of the forums opinions on super.


----------



## tothemax6 (6 March 2011)

tommymac said:


> I have to agree with moreld.
> 
> While I personally would like to have the option to have the money in my hand at this point in life to help repay my mortgage, most people would choose to spend the money.  This is proven by the level of credit card debt we already have in Australia.
> 
> In addition, if people were not putting away for their retirement (most people only start thinking about retirement after the age of 40), our personal tax would increase by approx the same amount so the Government would have the money to support all those people who do not help themselves.



Again, this follows the premise that the government needs to protect us from ourselves by force. So I ask you, what makes those people who comprise the government so special, that they should know better, that they may assume control of others and remove their rights?

I suppose it would be reasonable to say though, that the government is doing this so it doesn't end up stealing the money from those who have saved, and giving it to those who haven't in the future. But that is the same as a man saying "you better wear that veil miss, or I will be unable to prevent myself from raping you".
Not seeing much morality yet.


----------



## moreld (6 March 2011)

tothemax
Sorry that you misunderstood me, perhaps I could have been clearer. But to actually misquote me is it not acceptable. I never said "_the government importantly removes peoples funds from our direct control to waste_". You even put it in quotes. 

What I said is "_will take the burden off the government and as importantly removes those funds from their direct control to waste_." Like me it may have been a while since you studied English. As I recall "their" is a pronoun and is associated with the last noun, i.e. "their" referred to the government. That phrase meant that in Australia we control our super, rather than having a government taxing us further so they control our retirement and waste our money.

Lack of comprehension does not justify misquoting. 

If you are unable to look beyond your self and consider the greater community then we will seldom agree in discussions. What may be good for you or me is often not good for the greater good.

If the 9% didn't go into your super it would go in increased tax so the government could fund retirees. Would you prefer your % was split evenly among everyone?


----------



## Bill M (6 March 2011)

tothemax6 said:


> Hi All,
> 
> Looking for some opinions on superannuation as a concept, rather than any specifics within superannuation itself.
> I personally disagree with the entire concept. I think people should be free to do with their money as they wish _now_,




When I started working in the 70's there was no such thing as Super for ordinary people in ordinary jobs. My Mother often reminds me that women never got the same rights as men in pay and super well that was never on the table.

Then along came a government that finally stood up for the ordinary worker. For the first time in my life in the 90's we got 3% from our employer in addition to our salary. This is the point I want to stress, this was extra money in addition to your salary going into super for FREE. Yes I know we pay for it indirectly but you don't pay anything for it personally. How can that be a bad thing?

Believe you me, Australians are not real good savers, without super we would be a lot worse off. Sure some of us are traders and investors but the majority are not.

I have a mate that would not be worth a zac if it were not because of super. The last 20 years of superannuation guarantees and his 9% a year he puts in has built him up 400k in super. If there was no super he would have nothing.

I reckon Australia is world leader in Superannuation, we can thank both Labor and the Liberal governments for it. The rest of the world is way behind us. 

However there is one point negative, the money you put in yourself in addition to the guarantee is not accessible until 60. If that part worries you then don't put into it, as for the rest it's all good.


----------



## Slipperz (6 March 2011)

I guess the downside would be if you die before you get to collect it.  Heart attack at 59 FTL!


----------



## tothemax6 (6 March 2011)

moreld said:


> tothemax
> Sorry that you misunderstood me, perhaps I could have been clearer. But to actually misquote me is it not acceptable. I never said "_the government importantly removes peoples funds from our direct control to waste_". You even put it in quotes.
> 
> What I said is "_will take the burden off the government and as importantly removes those funds from their direct control to waste_." Like me it may have been a while since you studied English. As I recall "their" is a pronoun and is associated with the last noun, i.e. "their" referred to the government. That phrase meant that in Australia we control our super, rather than having a government taxing us further so they control our retirement and waste our money.
> ...



I actually use inverted commas to denote an idea all the time, but I always have the actual text above in a proper quoting box. Yes OK, I mistook you to mean 'their' as in the people rather than the government, and I retract the monster accusation. And I believe your understanding of the English language regarding pronouns is not entirely accurate. For instance, if one were to say "the government took their money", one would generally infer that 'their' referred to another entity revealed prior (i.e. 'in the context'), rather than the last mentioned entity as a rule, although it could conceivably refer to 'the government took their (the governments own) money (and did something with it)', for example.

Regarding the 9%, the implication is still that persons who retire, did not have the foresight to see something as basic as their approaching retirement, and failed to save in advance. And even then, on the occasion when this does happen, in other countries the burden is simply borne by their families - who put them up in their homes, or pay for them to live in a retirement home etc. 
People receiving money by force from others via the government simply because they declared 'I have retired', is just as immoral as forced superannuation savings.


----------



## tothemax6 (6 March 2011)

Bill M said:


> Then along came a government that finally stood up for the ordinary worker. For the first time in my life in the 90's we got 3% from our employer in addition to our salary. This is the point I want to stress, this was extra money in addition to your salary going into super for FREE. Yes I know we pay for it indirectly but you don't pay anything for it personally. How can that be a bad thing?



Unintended consequences, it was OK for you who kept your jobs, not those who didn't get a job because of the increased costs to the employer. Same reason simply enforcing a minimum wage simply leaves those at the bottom of the stack unemployed. No such thing as a free lunch, just one man going without his lunch so others can eat more.


Bill M said:


> Believe you me, Australians are not real good savers, without super we would be a lot worse off. Sure some of us are traders and investors but the majority are not.
> I have a mate that would not be worth a zac if it were not because of super. The last 20 years of superannuation guarantees and his 9% a year he puts in has built him up 400k in super. If there was no super he would have nothing.



Yes aussies are probably not good savers, but that doesn't mean men should be denied the freedom to do with their money as they wish, because other men are foolish. Men should not suffer simply because of the _existence _of lesser men. 


Bill M said:


> However there is one point negative, the money you put in yourself in addition to the guarantee is not accessible until 60. If that part worries you then don't put into it, as for the rest it's all good.



I don't . Because:


Slipperz said:


> I guess the downside would be if you die before you get to collect it.  Heart attack at 59 FTL!



Exactly, no man is guaranteed tomorrow.


----------



## Bill M (6 March 2011)

tothemax6 said:


> I don't . Because:



I didn't much either but believe me when you are 5 years away from retirement your attitude will change. Reason being is that you know it's not that far away and it will all be tax free. Tax Free........ very important.


> Exactly, no man is guaranteed tomorrow



I agree with that too. I repeat a true story of mine. Back in the late 80's I went into the big Colonial Mutual building in the Sydney CBD. I saw a pretty high up advisor who showed me how that if I put in regular money into super that by age 55 I would have a very nice sum of money waiting for me at the end. It was very substantial. Being a skeptic (as you are now) I declined and did nothing. A few years later the Government of the day changed the 55 year super retirement age. With the stroke of the pen it became 60 years of age. All those that were born after July 1960 were duped, now they have to wait 5 years longer to get their money. BLOODY DISGUSTING.


----------



## So_Cynical (6 March 2011)

tothemax6 said:


> The whole premise of superannuation is that free men are not capable of taking care of themselves and their families




That's pretty much the way i see it, at least for a substantial part of the population, so the Govt provides social security and compulsory super.


----------



## moreld (6 March 2011)

tothemax6 said:


> Men should not suffer simply because of the _existence _of lesser men.




I just want to keep that one for the record, it surely does not need any further comment!  




There are two keys dates for superannuation. July 1992 when it was introduced and 2002 when it raised from 3% to 9%. As you can see from above there was no unintended consequence of rising unemployment. In fact quite the reverse happened.

Australia now enjoys close to full employment and no massive retirement time bomb. While other Western countries struggle with unemployment and growing unfunded retirement debt.

Anyone who understands the time value of money would praise the Labour and then Liberal governments for their foresight in introducing superannuation and then raising the levy. I hope it gets raised to 12%.

As I said in my first post, the superannuation wealth in Australia is also a boon for our companies as those funds are in a large part funneled into their growth.

The greater man is one who recognises his position and fortune and wonders what he can do for others.


----------



## boofis (6 March 2011)

tothemax6 said:


> ....Exactly, no man is guaranteed tomorrow.....




lol, terrible idea regardless of how true it may be. Are you an advocate of term deposits, contracts, bonds etc.? I'm a student and I don't mind having super account, especially considering the government offers options like the co-contribution scheme for low income earners. I may not get to touch it till I'm 60 but a. if I die then my beneficiary gets it so it's still of value and b. it is a very, very long term investment but when I'm getting $1 for every $1 I put in voluntarily that's the surest investment with the largest returns I can participate in at this stage. My


----------



## tothemax6 (6 March 2011)

Bill M said:


> I didn't much either but believe me when you are 5 years away from retirement your attitude will change. Reason being is that you know it's not that far away and it will all be tax free. Tax Free........ very important.



I know, I guess its better now they have SMSF and you can manage the assets yourself.


So_Cynical said:


> That's pretty much the way i see it, at least for a substantial part of the population, so the Govt provides social security and compulsory super.



Well thats OK, we'll all just come into your house and tell you what you can and will do. You can't do it yourself after-all, so you have no rights. Long live the USSR! 
You are massaging your definitions - in this case 'provide'. There is no such thing as 'providing' someone with something that is compulsory or which involves theft and fencing of the stolen property. Its like saying 'I am going to provide you with burglary', and thinking you are giving them a service.
Again - what is it that makes those men in government so special, that they know how to control the lives of other men to those mens betterment? Why are they privileged to treat others like children, denying them rights, and taking their money and giving it to others? They are not. Such men belong in prison.


moreld said:


> I just want to keep that one for the record, it surely does not need any further comment!



Please do, and if you think that men have the right to steal from others, and that a man should not be allowed to _simply be_, we can add that to your record. Men should relate to each other in a civil manner - one man with property should not suffer because he is surrounded by thieves who have none.


----------



## tothemax6 (6 March 2011)

moreld said:


> There are two keys dates for superannuation. July 1992 when it was introduced and 2002 when it raised from 3% to 9%. As you can see from above there was no unintended consequence of rising unemployment. In fact quite the reverse happened.
> Australia now enjoys close to full employment and no massive retirement time bomb. While other Western countries struggle with unemployment and growing unfunded retirement debt.
> Anyone who understands the time value of money would praise the Labour and then Liberal governments for their foresight in introducing superannuation and then raising the levy. I hope it gets raised to 12%.



I agree - but I think we should raise it to 50%. We would then have zero unemployment! After all, the only factor involved in the employment level is the presence of superannuation, there are no other factors, correlation implies causation, increasing the minimum wage increases employment, black is white, and only the presence of a body of men called 'the government', who force men to do as they say, can raise men's time-preferences above that of a gorilla. 
I enjoy your morals - they are like watching a disaster on TV and enjoying the fact I'm not there.


moreld said:


> As I said in my first post, the superannuation wealth in Australia is also a boon for our companies as those funds are in a large part funneled into their growth.
> The greater man is one who recognises his position and fortune and wonders what he can do for others.



Superannuation funds do not have a track record of high performance compared to normal funds, the government even published an excel spreadsheet containing the performance figures. For most - you'd have done better putting your money in the bank. Which is, of course, where peoples money would be going were it not forced into super, and which would, of course, increase the supply of credit to businesses. Or it would be spent. Which is bad, so again, we should increase contributions to 50%, as these funds would be funneled into business growth. 

And why is this man greater? The quote sounded wise, but what moral argument actually underpins this? 'Others' live forever, he does not. He has no right to steal from them, nor them from him, and there is no virtue in him living for them, nor them for him.


boofis said:


> I may not get to touch it till I'm 60 but a. if I die then my beneficiary gets it so it's still of value and b. it is a very, very long term investment but when I'm getting $1 for every $1 I put in voluntarily that's the surest investment with the largest returns I can participate in at this stage. My



Sure, unless the fund goes bust, like my granddads fund did just before he retired. And he lives somewhere where you don't even _have _to have a retirement fund. And by the way - what use is that extra money when you are old and grey haired and heading for death? Food for thought.


----------



## AlexG1 (6 March 2011)

tothemax6 said:


> Again - what is it that makes those men in government so special, that they know how to control the lives of other men to those mens betterment? Why are they privileged to treat others like children, denying them rights, and taking their money and giving it to others?




It's called a democracy....

We vote them in to make decisions about how to best manage our society as a whole.  Generally it works pretty well I think...  Travelled a lot and I think we live in a pretty good place..

You can take your same arguments and apply them to roads, hospitals etc etc etc.   The government took a position that the entire society would be in a better position if people were forced to save money for when they stopped working.  If you don't do that then you have 2 options to address those that were unable to do so (through hardship, laziness, lack of education or many other reasons)

a) up taxes to pay for a pension that can support people in a reasonable life.
b) allow a large underclass to develop.

Plenty of evidence exists that having massive gaps in societal living standards leads to higher crime rates and other undesirable things...

There wasn't a vote in the USSR.  Go stand for the house of reps if you feel so strongly about it...

Alex.


----------



## tothemax6 (6 March 2011)

AlexG1 said:


> It's called a democracy....
> We vote them in to make decisions about how to best manage our society as a whole.  Generally it works pretty well I think...  Travelled a lot and I think we live in a pretty good place..



Slavery, so long as the slave class is a minority, is entirely democratic. De


AlexG1 said:


> You can take your same arguments and apply them to roads, hospitals etc etc etc.



I do. Either central planning by force works or it doesn't. It doesn't. 


AlexG1 said:


> a) up taxes to pay for a pension that can support people in a reasonable life.
> b) allow a large underclass to develop.
> Plenty of evidence exists that having massive gaps in societal living standards leads to higher crime rates and other undesirable things...



a) - tax comes from people, not just too people. b) in the end you might be right, but I hope you are wrong. This would imply that a large number of people are stupid apes who can't take care of themselves, and the only way we can protect ourselves from democratic 'redistribution of wealth' (theft), and other crime, is by forcing these stupid masses to do whats best for themselves. Needless to say, I consider such a claim to be disgusting.


----------



## AlexG1 (6 March 2011)

tothemax6 said:


> Slavery, so long as the slave class is a minority, is entirely democratic. De




Indeed - and fortunately we don't have it here - which says something.  I guess you agree with me on that as you state on a different part of your post



tothemax6 said:


> This would imply that a large number of people are stupid apes who can't take care of themselves, and the only way we can protect ourselves from democratic 'redistribution of wealth' (theft), and other crime, is by forcing these stupid masses to do whats best for themselves. Needless to say, I consider such a claim to be disgusting.




And so you clearly consider that the Government elected (and past governments) were elected by thinking men and thus have indeed acted with some form of social consensus...

Anyway - I guess we'll agree to disagree on this one.  I'd rather spend my time on some research on how best to make use of the AWESOME 15% tax rate I get on my SMSF fund.  Even better - only 7.5% on CG after 12 months.....  Not to mention fully franked dividends (company tax is 30%.....  my tax rate is 15% ....)  hang on the government OWES me 15% for those!  

I reckon you need to save at least 9% per year to have enough later on (and have that money growing).  The government lets me choose to salary sacrifice extra contributions if I want to and why wouldn't I???  Instead of paying tax in bracket X I only have to pay 15% on that as well).  Super is a fantastic way to save money.

Alex


----------



## Julia (6 March 2011)

tothemax6 said:


> The whole premise of superannuation is that free men are not capable of taking care of themselves and their families, that they are base creatures with time-preferences that are too high for their own good, and who will simply starve to death when they can no longer work - or start begging for a pension from the government.



Although rather colourfully described, this is essentially what has happened until the introduction of compulsory super.
Previous generations simply believed that their day to day taxes entitled them to a generous pension in retirement which would allow them to continue the same standard of living they enjoyed whilst working.
Hence the pension bill blew out.

We are facing increasing numbers of retirees from when the baby boomers start to retire.  It doesn't take too much intelligence to imagine the tax impost on the general population if these numbers are not at least partly self funded.

Tothemax:  I wonder if you are simply stirring with this thread?  A bit bored on a Sunday evening?
You have shown yourself to be pretty bright and intelligent, so to demonstrate as you have in this thread so far such a lack of appreciation for why super contributions are necessary seems disingenuous imo.

Let's consider the alternative, i.e. if there is no compulsory super and no incentive to save for our own retirement via government co-contributions etc.
Inevitably way more people will need a government pension.  This will have to continue to rise with the CPI or there will be a political outcry.
Obviously to fund this, *you will have to pay more tax*
You personally will therefore be subsidising all those people who spend their wages on the pokies and other gambling, and god knows what else, and who have not even the vaguest thought that they should be attempting to provide for their own retirement.

If they had just $1000 in the bank, they'd find a reason to spend it.

What you are doing in this thread (if indeed you are serious and not just agitating) is imagining that what drives and motivates you translates to the rest of the population.

It simply does not.
Therefore responsible governments need to, yes, essentially protect the masses from themselves or face the totally unpalatable alternative of increasing taxes to look after those people who haven't been bothered to look after themselves.

I'm totally in favour of Super and would like to see the compulsory contribution increased to 12 or 15%.


----------



## Tysonboss1 (6 March 2011)

tothemax6 said:


> I personally disagree with the entire concept. I think people should be free to do with their money as they wish _now_, and not be forced by the government to have a specific amount of their money held for a certain amount of time.




Just a quick note,

Super is contributed by the employer, It doen't come from "Your" money.


----------



## tothemax6 (8 March 2011)

Well this thread has all been very depressing, not quite what I expected at all. It seems that every other topic, no matter how right or wrong, always has opposing views, except super. Oh well, we could be living in North Korea I guess, then one would _really _have cause to complain about freedom and free markets. 


Julia said:


> Tothemax:  I wonder if you are simply stirring with this thread?  A bit bored on a Sunday evening?
> You have shown yourself to be pretty bright and intelligent, so to demonstrate as you have in this thread so far such a lack of appreciation for why super contributions are necessary seems disingenuous imo.
> Let's consider the alternative, i.e. if there is no compulsory super and no incentive to save for our own retirement via government co-contributions etc.
> Inevitably way more people will need a government pension.  This will have to continue to rise with the CPI or there will be a political outcry.
> ...



Regarding the funding/taxing, this is still has the presupposition of the need to protect the savers from future theft by the non savers (via the government), by controlling everyone's lives. I would personally rather see thieves jailed and everyone else free - lest 1984 be considered the ideal, crime free, freedom-free society.

Well, on asf at least, tothemax6 has never stated a viewpoint that he did not whole-heartedly believe in. I *do* consider superannuation plainly immoral, based on the same rules that dictate when other things are immoral, and I am not going to make an exception for superannuation because it is a popular 'norm', if you will. Actually, if you must know, rather than as a stir, this thread was triggered by me filling in a super-form on said sunday-evening, actually reading the nonsense, and having a bit of a think about the whole thing. 


Tysonboss1 said:


> Just a quick note,
> Super is contributed by the employer, It doen't come from "Your" money.



There are two sides to every trade. You exert labour, the boss spends money. The rate at which this occurs, we shall call the 'market rate'. It doesn't matter to him where the money actually goes - the boss simply gauges what money will leave his pocket as a result of your being employed by him, and what labour he will get in return.
Whether or not he pays that money into a hole in the ground, your bank account, or a super account from which you cannot withdraw, does not affect the market rate. That is to say, were there no super, you would simply be being paid that extra amount anyway in your normal salary.


----------



## jbocker (8 March 2011)

I dont find this superannuation thread depressing tothemax6, in fact I consider superannuation a good thing, it is a form of 'insurance' that pays a return, where the govt encourages me to particpate. 

How do you rank welfare by comparison, is it worse?
What of death insurance? (I have heard people argue 'you are gambling on your own death')
General insurance? (Now this something I dont rate highly!)


----------



## Bill M (8 March 2011)

tothemax6 said:


> Whether or not he pays that money into a hole in the ground, your bank account, or a super account from which you cannot withdraw, does not affect the market rate. *That is to say, were there no super, you would simply be being paid that extra amount anyway in your normal salary*.




That is nonsense! I was around before the superannuation guarantee was introduced and I can tell you for sure, if the employers were not forced to contribute into the fund then you would get *NOTHING* extra in your pay. The best decision ever was the introduction of National Superannuation Guarantee. Many many millions of people would have nothing if it were not for it.


----------



## johenmo (8 March 2011)

Bill M said:


> That is nonsense! I was around before the superannuation guarantee was introduced and I can tell you for sure, if the employers were not forced to contribute into the fund then you would get *NOTHING* extra in your pay. The best decision ever was the introduction of National Superannuation Guarantee. Many many millions of people would have nothing if it were not for it.




Says it all.  And I agree with Julia.  People need to be saved from themselves.  And we can not rely on lots of people to save, especially when they jobs paying at the bottom end of the income scale.  There is NO discretionary income when it all goes on living, eating, etc.  To believe otherwise is delusional.


----------



## white_goodman (8 March 2011)

sorry I wasnt here to back you up OP

superannuation morally is bad, and is a form of theft and impedes on individual freedom. Superannuation policy is just a bandaid for a welfare state.

The question is who is paying for superannuation, a few have argued its the employer which may be the case book keeping wise but in actuality is employees. If all was required to guarantee peoples retirement was to have super, lets make it 20, 30 or 60%, it wont work unless you want to drop your current wage rate significantly. People love a free lunch, but Im afraid in economics there is no such thing. its the same logic as applied to minimum wage laws. If all it took for a country to be wealthy was to have social protection via minimum wage, we could solve poverty in the third world. "Great success"

The only way you can get paid the same is if production goes up significantly higher to 9% or above, employers engage in charity whereby the employer gives an extra 9% at no cost to the employee. If you removed superannuation wages would go up (provided society is run on free enterprise with competition and no wage controls).

Now admittedly superannuation is better then welfare, but is still morally wrong as it requires govt to steal your own money away from you under the guise that they are smarter and morally superior and society is dumb. (Which begs the question, how smart are they if they are elected by such a dumb horde?) May I ask, who spends my money better, someone spending someones elses money on myself, or me spending my own money on myself?

The comments in this thread just show how far society has degenerated towards socialism. It would be nice if we could go back to a society where the expectations of govt were to umpire and be in charge of police, national defence, property rights, individual rights and ensuring contract law etc. Unfortunately the movement since the great depression is for govt to provide cradle to grave, big brother control of society to take care of us as we are too stupid to look after ourselves.

It always amazes me how people are quite willing to give up individual freedoms to government. Look at the track record of government and the type of people it promotes.

The problem is you cant absolve superannuation unless you absolve the welfare system, but hey more bureaucracy the better right?


----------



## boofhead (8 March 2011)

Super is good.

It also gives the economy a pool of investment funds that can invest for much longer term than many other companies/people would invest in.

If you look at census demographics you see many people that wouldn't save for retirment if optional - people on lower incomes or people where various costs are higher.


----------



## tothemax6 (8 March 2011)

So basically, apart from white_goodman, the stance of those on this forum is "people need to be protected from themselves by the government for their own good". The funniest thing about this is that there where claims in the NBN thread about ASF being 'right-wing' . This stance is the most extreme, totalitarian, fascist, GDR, 1984-esque stance that anyone can possibly take. You lot believe you are being morally righteous, whereas you are being anti-freedom hypocrites. 
Amazing.


boofhead said:


> Super is good.
> It also gives the economy a pool of investment funds that can invest for much longer term than many other companies/people would invest in.
> If you look at census demographics you see many people that wouldn't save for retirment if optional - people on lower incomes or people where various costs are higher.



Super is bad, you could just as soon argue that the government should take an extra 50% of peoples pay from them - so it can used as a 'pool of investment funds'. How about I take all of your money boofhead? I need to invest it in something . LOL, people should be free to invest as they see fit with their own money, everything else is a violation of rights.


Bill M said:


> That is nonsense! I was around before the superannuation guarantee was introduced and I can tell you for sure, if the employers were not forced to contribute into the fund then you would get *NOTHING* extra in your pay. The best decision ever was the introduction of National Superannuation Guarantee. Many many millions of people would have nothing if it were not for it.



Jesus Christ, it just gets worse. 'Millions of people would have nothing', if it weren't for the government withholding it from them until they are 60 - YES, and that's FINE. Who says people aren't allowed to spend their money when they want? I accumulate money, but that is not to say everyone else has to - is it? And we will extent your counter-argument as such: If we *force* (because that's OK of course) employers to pay their employees twice as much, the only effect will be that all workers get twice as much money, and there will be no other effects (such as the employer hiring less people).
Buy a book on economics, you clearly do not know even the basics.


----------



## johenmo (8 March 2011)

white_goodman said:


> The question is who is paying for superannuation...




Govt doesn't, it's paid by employees.  The super is counted as part of the package/rate, as are other on-costs.  WG is right.



white_goodman said:


> Now admittedly superannuation is better then welfare




If people who can't save don't have something forced onto them then welfare will be the alternative, and those who do save will end up paying (some of) the cost.  You may argue that super is a deferred form of welfare. Pay now, get later!

I don't like the Govt telling us where to invest our money but neither do I want to work and then pay some of it to someone who didn't.  Lots of parables/stories exists to this point.

Compulsory super is a lesser evil than taxing for welfare.


----------



## Bill M (8 March 2011)

tothemax6 said:


> you clearly do not know even the basics.




I must be doing something right, I'm already retired, not on super or the gov pension, how are your economics going?


----------



## tech/a (8 March 2011)

I'm self employed and the ONLY reasons I put MY money in Super is
(1) Its controlled by me SMSF
(2) Initial Massive tax breaks---which since I started are less than massive.

It lessens my cash flow for other investment opportunities.


----------



## againsthegrain (8 March 2011)

I have always been set on the same mindset as the OP, its my money why does somebody take it away and tell me what to do, im not 10, your not my mum or dad maybye I won't live to be 60! etc etc

I see it exactly from the centre line. People that are money wise, invest and are good at managing their savings (I like to think I am one of those) could always find alot better opportunities and returns for their super then those that are good at racking up debts.

It is no lie that probably the western society is split up somwhere around 80/20 or 90/10 in favour of those that like to spend now and worry about the future, well in the future at the last moment beyond the point of no return.

Then I put myself on the side line and think what can the govt do? How do you go about deducting who is responsible enough to get their super paid out and who will be forced to stay on it? A very big double standard to impose on society!

I guess as close as we can get is trying to manage our own super, a very hard thing to do. I have looked into it and I am nowhere near elegible to do it.

So my deductions and personal conclusion, we live in a society and have to be part of it and contribute to it. I guess for the greater good the smaller portion of the people that would be responsible taking charge of their own super have to be handicapped so that the general population can benefit and survive without taking the economy down.

Mentally I have written my super off, locked in the most aggressive plan that my provider lets me chose and close the book on it. I am only 28 so a few life times ahead of me, who knows if ill be around at 60 or if such a thing as super will exist, maybye we will be all living under the rule of China!

 Life goes on other investments and opportunities await - we can't win them all.


----------



## Julia (8 March 2011)

white_goodman said:


> The question is who is paying for superannuation, a few have argued its the employer which may be the case book keeping wise but in actuality is employees. If all was required to guarantee peoples retirement was to have super, lets make it 20, 30 or 60%, it wont work unless you want to drop your current wage rate significantly. People love a free lunch, but Im afraid in economics there is no such thing. its the same logic as applied to minimum wage laws. If all it took for a country to be wealthy was to have social protection via minimum wage, we could solve poverty in the third world. "Great success"



If you are half as competent as you suggest, then you will have no trouble negotiating a package with your employer which sees you receiving the salary you deserve plus your employer contributing the superannuation levy.

In that case, how would you be even slightly disadvantaged?
I'm sure if you were to explain to your employer your moral objections to even 1% of your salary being withheld until retirement age, if that employer values your services, he/she will quickly meet your demands.



> Now admittedly superannuation is better then welfare, but is still morally wrong as it requires govt to steal your own money away from you under the guise that they are smarter and morally superior and society is dumb. (Which begs the question, how smart are they if they are elected by such a dumb horde?) May I ask, who spends my money better, someone spending someones elses money on myself, or me spending my own money on myself?



You are in the paragraph above totally contradicting yourself.  1.  you concede super is better than welfare (and here we are talking about paying out the age pension), and then 2.  you want the right not to be part of a scheme which will one day ensure no ordinary taxpayer has a higher tax burden in order to pay non-savers the age pension.
You can't have it both ways.  Either you negotiate an appropriate package with your employer to meet your Super obligations, i.e. having the employer pay this, or you are happy to pay for ever after more general tax into consolidated revenue in order that irresponsible people can receive the benefits of your higher earning capacity in the form of an age pension.  
Just get real about it.  Perhaps just simply tell us whether you would rather your employer came up with the Super levy on your behalf or you happily agree to pay increased tax?



> The comments in this thread just show how far society has degenerated towards socialism. It would be nice if we could go back to a society where the expectations of govt were to umpire and be in charge of police, national defence, property rights, individual rights and ensuring contract law etc. Unfortunately the movement since the great depression is for govt to provide cradle to grave, big brother control of society to take care of us as we are too stupid to look after ourselves.



Yes, you're quite right about this.  It is simply an unfortunate fact of life that the overall society has to be geared to be as fair as possible to as many people as possible.  This will never be anywhere near approaching perfect.



> It always amazes me how people are quite willing to give up individual freedoms to government. Look at the track record of government and the type of people it promotes.



Again, I agree.  But there is a difference between people willingly giving up their autonomy and governments removing it.  Think about it.



johenmo said:


> Compulsory super is a lesser evil than taxing for welfare.



Exactly.



againsthegrain said:


> So my deductions and personal conclusion, we live in a society and have to be part of it and contribute to it. I guess for the greater good the smaller portion of the people that would be responsible taking charge of their own super have to be handicapped so that the general population can benefit and survive without taking the economy down.



Yes, sums it up well.


----------



## burglar (8 March 2011)

johenmo said:


> ... Compulsory super is a lesser evil than taxing for welfare.




Call me a bloody weirdo, but I cannot see the subtle differences.

In A.) You put money away for Ron

In B.) You put money away for Ron


----------



## tothemax6 (8 March 2011)

johenmo said:


> I don't like the Govt telling us where to invest our money but neither do I want to work and then pay some of it to someone who didn't.  Lots of parables/stories exists to this point.
> 
> Compulsory super is a lesser evil than taxing for welfare.



Totally agree.


tech/a said:


> I'm self employed and the ONLY reasons I put MY money in Super is
> (1) Its controlled by me SMSF
> (2) Initial Massive tax breaks---which since I started are less than massive.
> It lessens my cash flow for other investment opportunities.



Pretty much how I see it, will definitely use SMSF when I actually have substantial funds in super.


burglar said:


> Call me a bloody weirdo, but I cannot see the subtle differences.
> In A.) You put money away for Ron
> In B.) You put money away for Ron



Well, actually in A, You put money away for You. Super isn't a social security ponzi-type scheme (which is much worse).


Bill M said:


> I must be doing something right, I'm already retired, not on super or the gov pension, how are your economics going?



Young and earning pittance, is how I'm doing  . Probably doesn't have much to do with economics though, you'd agree that an individuals position doesn't actually have bearing on economic theory in general. Economic science is 'given, and being discovered' if you will, rather than 'being argued into reality' .


----------



## white_goodman (9 March 2011)

Julia said:


> If you are half as competent as you suggest, then you will have no trouble negotiating a package with your employer which sees you receiving the salary you deserve plus your employer contributing the superannuation levy.
> 
> In that case, how would you be even slightly disadvantaged?
> I'm sure if you were to explain to your employer your moral objections to even 1% of your salary being withheld until retirement age, if that employer values your services, he/she will quickly meet your demands.
> ...




- I am paid very well for a young tacker, and yes I would rather have my super in my regular pay, but as you know its illegal not to pay it, so i feel negotiation will fall on deaf ears.
- you obviously dont read, what I clearly said is super is a bandaid for a welfare system/state. Super is necessary because of welfare, if you remove both I fail to see how I will be paying increase tax. Then as welfare burden will not be around our necks we could move to a tax system a little more promoting of individual freedom, perhaps a negative income tax.
But yes I accept your notion that to remove super but not welfare we will have increased tax burden and age pension will drain us economically. 
Also think of the growth in industry and production as there would be no need for immigration restriction.. no welfare = free immigration


----------



## Sir Osisofliver (9 March 2011)

Sorry I wasn't around to back you up as well Tothemax. Don't be disheartened from all those that drink the cool-aid that super is the ultimate form of investment. My views on super (especially super under a managed fund structure) are well known - for the majority of people it's not wealth creating, it's the reverse.

I won't have time over the next couple of days to wade into the discussion and give it the attention it deserves, but will come back and happily discuss it.

Cheers

Sir O


----------



## Julia (9 March 2011)

white_goodman said:


> - I am paid very well for a young tacker, and yes I would rather have my super in my regular pay, but as you know its illegal not to pay it, so i feel negotiation will fall on deaf ears.
> - you obviously dont read, what I clearly said is super is a bandaid for a welfare system/state. Super is necessary because of welfare, if you remove both I fail to see how I will be paying increase tax. Then as welfare burden will not be around our necks we could move to a tax system a little more promoting of individual freedom, perhaps a negative income tax.
> But yes I accept your notion that to remove super but not welfare we will have increased tax burden and age pension will drain us economically.
> Also think of the growth in industry and production as there would be no need for immigration restriction.. no welfare = free immigration



1.   If you think our society will ever be without welfare, you're dreaming.

2.   Would you really like to live in such a society?  Aren't you assuming you will never, ever have need of any assistance yourself?   Would you be just okey dokey if you had a catastrophic accident, or a major illness which precluded you from working?




Sir Osisofliver said:


> Sorry I wasn't around to back you up as well Tothemax. Don't be disheartened from all those that drink the cool-aid that super is the ultimate form of investment.



Hello Sir O:  yes, we know you are against Super.  But in all our discussions about this, you've not managed to offer an alternative for all those who fail to otherwise save for their retirement.

And it's a bit disingenuous to suggest that anyone feeling Super is better than increased taxation in order to fund age pensions regards this as "the ultimate form of investment".   

However, to hold within a SMSF most investments you can hold outside of Super in such a tax advantaged environment (15% for those who don't know) is hardly a miserable option for many.


----------



## sinner (9 March 2011)

The cognitive dissonance of this thread is massive.

To me the argument is the same as speed cameras in Australia.

In countries like Germany, if you receive a driving infraction the fine is minimal and the punishment is in the form of driver education mandates.

Meanwhile in Australia, if you receive a driving infraction the fine is maximal and this is the punishment in and of itself.

If you are going to force a society to do something, which is better? To force them to be educated (and therefore act in the most beneficial manner), or force them to contribute to extremely ineffective hedges against their own alleged lack of foresight.
Which one actually contributes to a healthier happier society and which one is merely an exercise in arbitrary revenue raising? 
What's 15% of 9% of the annual income of every man and woman in the workforce and where do those billions go? Invested wisely into our futures? HAH!


----------



## Intrinsic Value (9 March 2011)

Superannuation is a good idea and a good concept but unfortunately in Australia successive governments have played around with the laws so many times that many have lost confidence in the system.

Additionally super has been very good to the super providers and their affiliated financial advisors. This is my biggest gripe with super. Most contributors have been ripped off mercilessly for years and the governments both past and present have been complicit in this rip off by failing to protect the contributors from the hidden fees and charges that have decimated many a super fund.

Still I think the concept is good and if you take control of your own investments thru a SMSF then all the better. The caveat is you never know when those greedy politicians eyeing the super honey pot will try and get their greedy hands on it.

I can't see any rational argument agains the concept in principle thou. We have health insurance thru medicare levy and we have many other forms of insurance and super really is a  form of insurance that you have enough money when you get older to exist on. The reality is that many people would not save anything if they weren't forced too so super provides a safety net if you will to protect those people retiring who may have limited assets otherwise.


----------



## Knobby22 (9 March 2011)

Julia has argued the case extremely well. 

One additional good thing about super, and if you look at Singapore, they have been experts at it, is that the forced saving creates huge pools of money that can buy major long term assets. As Australia's super builds, it helps the balnce of trade and provides capital for projects within Australia such as mines which may not get up without it. All adding to the wealth of Australians. 

Secondly, it also creates an interest in society to have the economy operating well i.e. people want to see their investments grow which is anti-communism. This change in mindset is also good for Australia.

White Goodmen, about getting rid of pensions, healthcare etc. Some people struggle! If it happened to you (i.e. you got MS) what would happen? or do you have a rich Daddy?


----------



## burglar (9 March 2011)

Intrinsic Value said:


> ... The reality is that many people would not save anything if they weren't forced too so super provides a safety net ...




Safety Net??

What will idiots do with their super when it matures?
Will drunks be on the wagon?
Will gamblers stop betting?


----------



## sinner (9 March 2011)

Knobby22 said:


> One additional good thing about super, and if you look at Singapore, they have been experts at it, is that the forced saving creates huge pools of money that can buy major long term assets. As Australia's super builds, it helps the balnce of trade and provides capital for projects within Australia such as mines which may not get up without it. All adding to the wealth of Australians.






Surely...surely...you don't actually believe this statement?

My understanding of investment was that capital goes where it is treated well. You obviously see it that capital must be directed, even if it doesn't want to go there, you are misusing the word investment when what you actually mean is mandated subsidy for business and Government.


----------



## Knobby22 (9 March 2011)

sinner said:


> Surely...surely...you don't actually believe this statement?
> 
> My understanding of investment was that capital goes where it is treated well. You obviously see it that capital must be directed, even if it doesn't want to go there, you are misusing the word investment when what you actually mean is mandated subsidy for business and Government.




I do.

The enforced savings creats opportunities worldwide but particuarly in Australia.
Obviously Australian capital can see and understand better investments in Australia as they are on the ground. Also Australias dividend system favours Australian residents.

Investing overseas obviously also occurs, creating income for Australia. 
You can say that this would occur if Australians were not forced to save in super, but the reality is that most wage earners will not invest in such concerns but will spend the money instead. 

You are saying it is a mandated subsidy for business-I disagree,  give me an example.


----------



## Tysonboss1 (9 March 2011)

burglar said:


> Safety Net??
> 
> What will idiots do with their super when it matures?
> Will drunks be on the wagon?
> Will gamblers stop betting?




Hopfully the money gets put into annuities


----------



## Sir Osisofliver (9 March 2011)

Julia said:


> Hello Sir O:  yes, we know you are against Super.  But in all our discussions about this, you've not managed to offer an alternative for all those who fail to otherwise save for their retirement.




Hi Julia, we've spoken before about the need for financial education for all Australians, and I have said that for the *vast majority* super is not good. I do see education being a long-term change solution, but those that are unable to take control of their own investments for whatever reason need to be accomodated for - if that is through a mandated system - so be it. For me it is an issue of control. When you give your hard earned to someone else to manage on your behalf you have no control. So *obviously* SMSF (if you are going to have any form of super) is the way to go - That's what I have. I know you can lead a horse to water but cannot make him drink, similarly you can educate people about the importance of investing for their future but cannot force them to do so...unless you take it from them. Like tothemax I object to being *forced* to invest into what is for the vast majority who do not know how to work the system to their advantage, a poorly performing asset. 







> And it's a bit disingenuous to suggest that anyone feeling Super is better than increased taxation in order to fund age pensions regards this as "the ultimate form of investment".




Er...I think you are reading something into my post I didn't put there. I don't remember mentioning the word taxation. A lot of people have been told that you need to provide for your future. Great! I agree wholeheartedly. However then they get told that super is the only way to do it...and so they believe it and defend it because the people advising them wouldn't lie to them at all would they?  /sarcasm.  It's been mentioned in the thread before that the superannuation industry tends to act for the benefit of people providing the product rather than the client. Isn't this why *you* have a SMSF?







> However, to hold within a SMSF most investments you can hold outside of Super in such a tax advantaged environment (15% for those who don't know) is hardly a miserable option for many.




No it's not a miserable option. It's certainly better than doing nothing, but you don't know what you don't know. What a lot of people don't know is that there are far far better ways of providing for your financial future over the longer term *outside* of super, tax advantages included. Without this knowledge they are happy and content to not change what they are doing. If the government in their wisdom decided that super would perpetually be a zero tax environment, and remove the restrictions that in place that limit the effectiveness of the asset class, that might change the equation and make super a better proposition - but I can't see them doing this. 

Cheers

Sir O


----------



## burglar (9 March 2011)

Tysonboss1 said:


> Hopfully the money gets put into annuities




And p!ssed against the wall in spurts?


----------



## Intrinsic Value (9 March 2011)

Tysonboss1 said:


> Hopfully the money gets put into annuities




I reckon this is likely to be the next big super change. i.e. you cannot take a lumpsum you have to take some form of annuity. 

The government thinks that everyone will blow their lumpsum in a few years mad spending and then go on the govt pension so to avoid that they will legislate that you have to take some form of annuity.


----------



## Julia (9 March 2011)

sinner said:


> If you are going to force a society to do something, which is better? To force them to be educated (and therefore act in the most beneficial manner), or force them to contribute to extremely ineffective hedges against their own alleged lack of foresight.
> Which one actually contributes to a healthier happier society and which one is merely an exercise in arbitrary revenue raising?
> What's 15% of 9% of the annual income of every man and woman in the workforce and where do those billions go? Invested wisely into our futures? HAH!



Sinner, I think most of us here on ASF will agree with the principle of what you're saying, and Sir O is saying the same thing.  But it's just a sad fact of life that many people simply do not want to be educated and/or are incapable of absorbing and using the offered information.

I'm constantly blown away by the numbers of my own friends, intelligent, well educated women with good careers who - when I suggest they need to get some financial education instead of relying on their public super fund, and even offer to get them started - just mumble 'yes, I know I should', but *never actually do anything about it*.

What you're doing is assuming everyone has the same capacity for becoming financially literate as yourself.  That's sadly just not so.

Therefore, given it would be impractical to have one system for some people and an exemption from such a system for others, we have the compulsory Super scheme in the hope (?) that eventually most people will be at least partly self funded when they retire.

As I've pointed out earlier, the alternative is that we all pay more tax to provide age pensions for those too improvident or unable to provide for themselves.

Yes, I know it's irritating and yes I know it offends your sense of autonomy and I agree.  I just don't think there's a practical alternative.





Intrinsic Value said:


> Superannuation is a good idea and a good concept but unfortunately in Australia successive governments have played around with the laws so many times that many have lost confidence in the system.



Good point and quite true.



> Additionally super has been very good to the super providers and their affiliated financial advisors. This is my biggest gripe with super. Most contributors have been ripped off mercilessly for years and the governments both past and present have been complicit in this rip off by failing to protect the contributors from the hidden fees and charges that have decimated many a super fund.



Agree entirely.  However, don't you think there is emerging a greater awareness amongst the general public that this is the case so maybe, just maybe they might ask a few more questions and be a bit more discerning?




> Still I think the concept is good and if you take control of your own investments thru a SMSF then all the better. The caveat is you never know when those greedy politicians eyeing the super honey pot will try and get their greedy hands on it.



Again, so true.  At the very least I'll be surprised if compulsory annuities are not a reality before too long.




Sir Osisofliver said:


> Hi Julia, we've spoken before about the need for financial education for all Australians, and I have said that for the *vast majority* super is not good. I do see education being a long-term change solution, but those that are unable to take control of their own investments for whatever reason need to be accomodated for - if that is through a mandated system - so be it. For me it is an issue of control. When you give your hard earned to someone else to manage on your behalf you have no control. So *obviously* SMSF (if you are going to have any form of super) is the way to go - That's what I have.



Yes, as I do.  And I should acknowledge that I've never been involved in any sort of compulsory super scheme.  It wasn't compulsory in NZ and I always rejected the option offered by employers for the very reasons you outline.



> I know you can lead a horse to water but cannot make him drink, similarly you can educate people about the importance of investing for their future but cannot force them to do so...unless you take it from them. Like tothemax I object to being *forced* to invest into what is for the vast majority who do not know how to work the system to their advantage, a poorly performing asset.



OK, so what do you think would happen if Super were no longer compulsory but optional.  Do you believe the average Australian, the type of person who has no interest in becoming personally financially literate, will elect to participate in a Super scheme?

The government would have to a much better sales job than they have done thus far on behalf of Super for this to happen, imo.  
That would be the ideal, of course, i.e. for those who are capable of adequately providing for themselves to do so without the imposition of participating in any outside scheme, and the rest to accept the option of the supa dupa fund managers continuing to enjoy the healthy commissions from investors that they do at present.





> Er...I think you are reading something into my post I didn't put there. I don't remember mentioning the word taxation.



You didn't.  But if people are not contributing to Super and therefore will need 'the gummint' to provide them with an age pension, you will be paying more tax to provide this.



Intrinsic Value said:


> I reckon this is likely to be the next big super change. i.e. you cannot take a lumpsum you have to take some form of annuity.
> 
> The government thinks that everyone will blow their lumpsum in a few years mad spending and then go on the govt pension so to avoid that they will legislate that you have to take some form of annuity.



 Yep, agree.  Do you think this is a good idea?


----------



## sinner (9 March 2011)

Julia said:


> Sinner, I think most of us here on ASF will agree with the principle of what you're saying, and Sir O is saying the same thing.  But it's just a sad fact of life that many people simply do not want to be educated and/or are incapable of absorbing and using the offered information.
> 
> I'm constantly blown away by the numbers of my own friends, intelligent, well educated women with good careers who - when I suggest they need to get some financial education instead of relying on their public super fund, and even offer to get them started - just mumble 'yes, I know I should', but *never actually do anything about it*.
> 
> ...




Julia this is specifically why I raised the issue of speeding cameras/driving infractions in Germany vs Australia.

Yes, people know they shouldn't speed or drive dangerously. I'm constantly blown away by those that risk their lives, the lives of their loved ones friends and community to such behaviour but when I suggest they slow down they mumble something about getting to work on time because they slept in.

So should we fine them, again and again while we continue to let them drive? Or do as the Germans, and mandate bad drivers take driver education before they are allowed to drive again?

What *you* are assuming is
a. The current situation is actually practical and actually provides even a semblance of partial self funding for retirement. This is patently absurd if you take a look at the performance of the super industry (http://www.abc.net.au/pm/content/2010/s2973486.htm)! Most of those in my peer group come to me for financial advice, when I look at their super statements I see $0 or close to it after 10+ years of contributing to society through taking on the lowest rungs of social labour that nobody but the young will touch. 
All contributions eaten up by malinvestment (by supposed professionals) and the management fees those so called pros take despite their consistently shoddy performance. 
b. The only alternative is mandated contributions into superannuation. This is just as absurd an assumption, and some sort of nanny-state cognitive dissonance you are displaying here. 
I bring you back to the driving example: Which idea actually makes sense to progress and increase the prosperity of society? To educate drivers with poor driving skills, or to fine them up the wazoo every time they break the law? To me it seems you would fine them over and over again, just assuming their stupidity will never change no matter what you do. Exactly the same logical thought process should be applied to future savings? We are *already* mandating the people do something. Why don't we mandate something useful instead of something as blatantly and audaciously wasteful as superannuation? 
We are literally talking about the transfer of massive, huge, insanely huge amounts of wealth out of the pockets of the productive classes of society into the hands of fund managers and the companies they choose to invest in. How much of the result of Australias working class productive capacity was wiped out by idiot fund managers in 2007 and 2008 never to return even though those fund managers probably took home great paypackets week in week out all through the GFC - literally to the tune of $50mil per day?


> JEFF BRESNAHAN: Quite simply, almost $47/$48 million a day coming out of our superannuation accounts to pay suppliers for managing that money.




Everyone should watch this short 30 second clip:


----------



## Knobby22 (9 March 2011)

So Sinner, you are saying that all people will act rationally if taught correctly.
Greenspan was the last person to fall for that with people with degrees from Harvard.


----------



## sinner (9 March 2011)

Knobby22 said:


> So Sinner, you are saying that all people will act rationally if taught correctly.
> Greenspan was the last person to fall for that with people with degrees from Harvard.




Mate all I am saying is that this is a big brother or nanny state solution that will fail just as badly as any other poorly concocted ponzi scheme, with the usual result being that those of productive capacity who trusted will not get what they have been promised in the end while those that promised it will be making sure they and theirs are setup very well for retirement.

As for your previous request to me, to provide an example of mandated business subsidy, your own post makes it perfectly clear. Investments which would have otherwise been unable to attract capital due to poor treatment of that capital, suddenly found themselves awash in an ocean of liquidity shortly after John Howard mandated that every man and woman of working age must put 9% of his productive capacity into the top 200 of the index. This is the very definition of a subsidy by taxpayers for business mandated by the government. In this way, banks and miners and all sorts of companies are receiving cash inflows that they almost certainly would not have otherwise, yet they can continue to count on year after year day after day new money will be pouring into their listed shares.


----------



## sinner (9 March 2011)

For the curious, here is 

Sinners Simple Superannuation Solution:

1. Dissolve the super industry, and force those working within it to get real jobs.
2. Provide simple options for future investment. Off the top of my head: term deposits, govt and corporate bonds hedged for inflation, gold bullion, low risk stocks of unlevered companies (if you want to invest in levered companies then just buy shares in the bank providing the loan) at a maximum cap of 50% of total net savings, PPOR. Yes, PPOR (*not IP*). Let people use their super to buy a house, and pay themselves rent. Any fees on all investment should be capped at 0.5% or less especially in the modern era where most investments are made with the click of a mouse.
3. Dissolve tax on the principal, and only apply tax to earnings on investments a flat rate of 5%, and 0% tax rate for those investments in term deposits or govt bonds.


----------



## burglar (9 March 2011)

Sir Osisofliver said:


> ...
> Cheers
> 
> Sir O




I so look forward to a sensible view on this topic. 
Please, please, please, find time to illuminate us.


----------



## Tysonboss1 (9 March 2011)

sinner said:


> For the curious, here is
> 
> Sinners Simple Superannuation Solution:
> 
> ...




1, Aren't these the people that would have to be doing the paper work behind your "simple options" in your second point, or would they have to be reemployed into government bureaucracy to enable it.

3, Only earnings ( profits) are taxed in the current system aren't they? which tax targets principle.


----------



## Tysonboss1 (9 March 2011)

Intrinsic Value said:


> I reckon this is likely to be the next big super change. i.e. you cannot take a lumpsum you have to take some form of annuity.
> 
> The government thinks that everyone will blow their lumpsum in a few years mad spending and then go on the govt pension so to avoid that they will legislate that you have to take some form of annuity.




Makes sense to me, The point of super is to fund your retirement, So to me it would make sense if the funds are paid out over time.


----------



## Julia (9 March 2011)

Knobby22 said:


> So Sinner, you are saying that all people will act rationally if taught correctly.
> Greenspan was the last person to fall for that with people with degrees from Harvard.



This is the fundamental point I've been trying to make.  It is simply not so.



sinner said:


> For the curious, here is
> 
> Sinners Simple Superannuation Solution:
> 
> ...



OK, goodonya Sinner.  At least you are putting up an alternative.
At first glance it looks feasible.
As long as those of us who choose to have a SMSF never have that option removed.

To be honest, if I were dependent on some dodgy fund manager I'd accept pretty much anything as an alternative.


----------



## Julia (9 March 2011)

Tysonboss1 said:


> Makes sense to me, The point of super is to fund your retirement, So to me it would make sense if the funds are paid out over time.



Much as I dislike generalisations, I agree that for the majority this does make good sense.


----------



## basilio (10 March 2011)

I have to say I have big reservations about how superannuation funds are managed in Australia. As I see it the premise that far too much money is simply shuffled between managers, wrap accounts, administration, profits and whatever fees are dreamt up after a Friday afternoon drink is basically true.  In fact it was the unions who fought "tooth and nail" to at least establish industry funds which have a significantly lower set of costs than the Bank, Insurance and other ticket clippers in the system.

What alternatives could be offered? How is this for one  possibility.  As I understand it the long term goal of super funds is to achieve a 3% real return per year for their members. That is Inflation plus 3%. If members were to achieve this result the actuaries would say it was a successful fund.  (If you think this to modest check out what the net figures are for any super fund you care to mention. I'd bet very, very few if any could boast such a return over the last 20 yeaars).

So why not have the Government stand in the market place and offer a simple passbook system where they offer inflation plus 2.8% (.2% for admin) and then invest the money as they see fit either in the market place or national infrastructure.  People don't have to invest here - it is their option but in this case it offers the Government long term funds that hopefully could be used for nation building either through private companies or  government projects.

So what sort of projects ? How about freeways that are built on a cost plus basis rather than financial gouging models. Renewable power plants owned and run by an integrated  national public power company. Or perhaps a national publicly owned bank that ran on a cost plus basis rather than maximising profits at every turn. 

Yes pipe dreams I suppose. After all  if we actually focused on  doing something useful with our savings what would happen to the rich layers of sophisticated financial wizards who keep our wealthiest suburbs bubbling along ?


----------



## basilio (10 March 2011)

Just reviewing this thread in more detail and noticed the conversation about esuperfund.  I had a look at their website and it seems extremely simple, cost effective and impressive.

Can anyone on this forum offer personal comments on the scheme? Are there any hidden traps we should know about ?  I'm excited !!


----------



## Bill M (10 March 2011)

Sir Osisofliver said:


> What a lot of people don't know is that there are far far better ways of providing for your financial future over the longer term *outside* of super, tax advantages included. Without this knowledge they are happy and content to not change what they are doing.




The only thing I know of that is better than being taxed at 15% in Super is the Family Home which is totally tax free. Could you help us out a bit here and if you are reposting something you have written before could you provide the link? I'm very interested in this.


----------



## white_goodman (10 March 2011)

basilio said:


> I have to say I have big reservations about how superannuation funds are managed in Australia. As I see it the premise that far too much money is simply shuffled between managers, wrap accounts, administration, profits and whatever fees are dreamt up after a Friday afternoon drink is basically true.  In fact it was the unions who fought "tooth and nail" to at least establish industry funds which have a significantly lower set of costs than the Bank, Insurance and other ticket clippers in the system.
> 
> What alternatives could be offered? How is this for one  possibility.  As I understand it the long term goal of super funds is to achieve a 3% real return per year for their members. That is Inflation plus 3%. If members were to achieve this result the actuaries would say it was a successful fund.  (If you think this to modest check out what the net figures are for any super fund you care to mention. I'd bet very, very few if any could boast such a return over the last 20 yeaars).
> 
> ...




yes sounds well on paper, but your assuming govt know how to spend peoples money effectively which has been anything but the case, all I see is waste and a bankrupt govt...

imagine the bureaucracy with that pool of funds


----------



## Julia (10 March 2011)

white_goodman said:


> yes sounds well on paper, but your assuming govt know how to spend peoples money effectively which has been anything but the case, all I see is waste and a bankrupt govt...
> 
> imagine the bureaucracy with that pool of funds



Yep, that was exactly my thought when I read that, basilio.  
Not only would they mess up any investment, but the funds would be at risk of being plundered.


----------



## Julia (10 March 2011)

basilio said:


> Just reviewing this thread in more detail and noticed the conversation about esuperfund.  I had a look at their website and it seems extremely simple, cost effective and impressive.
> 
> Can anyone on this forum offer personal comments on the scheme? Are there any hidden traps we should know about ?  I'm excited !!



 Basilio, here is a whole thread about them and other options:
https://www.aussiestockforums.com/forums/showthread.php?t=7558&highlight=SMSF


----------



## Intrinsic Value (10 March 2011)

Julia said:


> Sinner, I think most of us here on ASF will agree with the principle of what you're saying, and Sir O is saying the same thing.  But it's just a sad fact of life that many people simply do not want to be educated and/or are incapable of absorbing and using the offered information.
> 
> I'm constantly blown away by the numbers of my own friends, intelligent, well educated women with good careers who - when I suggest they need to get some financial education instead of relying on their public super fund, and even offer to get them started - just mumble 'yes, I know I should', but *never actually do anything about it*.
> 
> ...




Well it is certainly a good idea from the government's perspective. They can ensure that lumpsum payments aren't squandered and that guarantees less reliance on government pensions and handouts.

How it would be administered is again the issue. The track records of governments is far from reassuring in that repsect. 

If history is any guidline it will be another bonanza to the super industry and their affiliated financial advisors to further gouge the retirment savings of Australians. Hopefully I can get a hold of mine before this happens. 

The deadlocked parliament might be a blessing when it comes to super as it might just stop any changes in the short term. 

However in the long term there is no doubt that annuities will figure high on the political agenda and of course the tax free income from super after 60 must go at some stage as well.
This is grossly unfair to the rest of working Australians who are supposed to subsidy older Australians with this most too generous of schemes and of course a drain on the governments bottom line.


----------



## basilio (10 March 2011)

> yes sounds well on paper, but your assuming govt know how to spend peoples money effectively which has been anything but the case, all I see is waste and a bankrupt govt...
> 
> imagine the bureaucracy with that pool of funds






> Yep, that was exactly my thought when I read that, basilio.
> Not only would they mess up any investment, but the funds would be at risk of being plundered.





I was slightly tongue in cheek when I opened the concept of  a government super fund. I won't spend huge energies defending the idea but equally I don't believe the "government" has any monopoly on wasting money or plundering it for the benefit of a few versus the majority.

The issue of how well an investment fund works is largely good governance. Does one have  thoughtful , imaginative and honest people at the top? Are there effective mechanisms to ensure transparency of operations and prevent rip offs? And in the larger picture is the actual investment into  intrinsically worthwhile projects?  

I think these questions should be applied to all funds that take our money and promise we will get a pot of gold at the end of the rainbow. As I see it an honest accountable government has a better chance of achieving a balanced , good final outcome. On the other hand we can from widespread experience be far more certain that left to themselves for-profit superannuation funds will benefit the owners the agents and the industry long before the people who have invested their life savings. - us. 

__________________________________________________

Julia, Thanks for the link to the esuperfund.


----------



## R35 (10 March 2011)

basilio said:


> I was slightly tongue in cheek when I opened the concept of  a government super fund. I won't spend huge energies defending the idea but equally I don't believe the "government" has any monopoly on wasting money or plundering it for the benefit of a few versus the majority.
> 
> The issue of how well an investment fund works is largely good governance. Does one have  thoughtful , imaginative and honest people at the top? Are there effective mechanisms to ensure transparency of operations and prevent rip offs? And in the larger picture is the actual investment into  intrinsically worthwhile projects?
> 
> ...





Honestly, the Aussie system is world class - you have options.
In a country like Japan you have zero choice and the return on your funds is under 1% with no option to manage yourself, you can only draw it down if you live in the country. no flexibility.

There is a growing class of younger folks in Japan who are refusing to pay into the system as they know it will be bankrupt by the time they retire...hence ballooning underfunded obligations..in the same vein I heard the US are about to allow States to declare bankruptcy so that all legacy pension obligations can be reset lower.
You work your whole life then get screwed in the end...


----------



## burglar (10 March 2011)

R35 said:


> Honestly, the Aussie system is world class - ...




World class?
You could not have bought the same one as me!!

Hi Julia,
 Thanks for the hot tip!


----------



## doctorj (11 March 2011)

burglar said:


> World class?
> You could not have bought the same one as me!!



 The Australian system is far from perfect, but having worked with pension funds in Australia and a dozen or so other countries, it's one of the better ones in the world.  Tax deductible contributions, mandatory employer contributions at a meaningful rate, separate accounts for individuals, relatively low fees, defined contribution schemes, broad investment options, good governance, flexibility to have a smsf...
None of these things should be taken for granted. A lot of countries that are pretty well developed don't have a superannuation programme at all - and many of those that do are pretty rubbish (think 2-3% contributions, no tax impact, no separate accounts, limited to a very small range of investment instruments etc etc).


----------



## burglar (12 March 2011)

doctorj said:


> The Australian system is far from perfect, ...




Ok. I admit this is my all time, biggest whinge (grizzle, gripe whatever)

Let me explain: 

I did not choose the worst Super in Australia.

I chose "Scottish Eagle Australia" 
They chose to sell to a third party.
Eventually it ended up with MLC.
MLC was in turn swallowed whole by NAB.

Now I have the worst Super in Australia.


----------



## awg (12 March 2011)

A neccesary evil

a replacement for age pension

make no mistake, simple maths expain what will happen to the real value of the pension within a generation.

I anticipate regulations will be put in place to cap the tax-free amount for income and withdrawls.

nothing is sure, so who knows what will happen with investment returns, but I continue to run my SMSF with a view to being non-qualified for pension, due to assets and income.

I dont believe that this ( mucking about every damm year) would offer sufficient incentive for people under 50 to contribute as much as they need.

I took a big risk placing my money in super, even though it was an obvious decision, legislative risk is very real.

The saving grace afaic is, as I mentioned, it is a defacto pension, and were the govt to undermine it too much, that would be couterproductive for the budget.

I reiterate that if you are reliant on welfare in twenty years, you will be in the poorhouse


----------



## Julia (12 March 2011)

awg said:


> A neccesary evil
> 
> a replacement for age pension
> 
> make no mistake, simple maths expain what will happen to the real value of the pension within a generation.



But politically simple maths isn't going to cut it, is it?   The government old age pension has to continually be adjusted to provide the most basic safety net or the government of the day will be leaving themselves wide open to charges of ignoring our much valued elderly who have paid into the tax system all their lives, yada yada.
There are important votes here, not just with the aged, but with their children who do not want to be subsidising their parents.



> I anticipate regulations will be put in place to cap the tax-free amount for income and withdrawls.



Probably right.  It's very generous at present, especially with the 50% reduction in the obligatory amount drawn annually since the GFC.



> nothing is sure, so who knows what will happen with investment returns, but I continue to run my SMSF with a view to being non-qualified for pension, due to assets and income.



Yes, and I'd say most people who have SMSF's will be in this position.
But unless the compulsory levy is increased, at least in the next couple of generations, many will still not be self funded.



> I took a big risk placing my money in super, even though it was an obvious decision, legislative risk is very real.



Yes it is, especially with a government such as the present one who - the way they're going - could be desperate enough to plunder Super savings.
You'd have to hope having a SMSF would be some protection, but even then it is not impossible that e.g. taking out a government based annuity will be a requirement at some stage.



> The saving grace afaic is, as I mentioned, it is a defacto pension, and were the govt to undermine it too much, that would be couterproductive for the budget.



Exactly and this is all the more reason to increase the levy.



> I reiterate that if you are reliant on welfare in twenty years, you will be in the poorhouse



Not quite sure about this for reason offered above but I'm interested in the views of others on this, i.e. does the political outweigh the financial here?


----------



## Intrinsic Value (13 March 2011)

Predicting what might happen in twenty years time is too hard for me. 

However I think it is almost impossible to live on the government pension right now.

It is probably only going to get more difficult with time.

Many people will inevitably have to work longer  and personally i dont think this is such a bad thing.

THere is too much of a dependence mentality by too many in the Australian community.

There needs to be a shift to more personal accountability about retirement savings and investments.

Of course I think we will always have a sort of safety net for those that fall through the cracks and that is fair and just as I would not like to see society degenerate where those that are unfortunate are not take care of to some extent. 

But far too many people in the past have seen it as their god given right to not plan for retirement and then expect the taxpayer to foot the bill for their retirement and of course for all their health care costs.

This is not sustainable in the long run especially with the growing aged population and of course a younger generation forced to work harder and longer to support them.


----------



## c-unit (13 March 2011)

I don't particularly like super either because I don't trust governments and am expecting one day to find that the Gov are raiding our super to pay for their splending splurges.

Unfortunately however, we are stuck with it unless pensions no longer exist. I would agree entirely with a no pension, no superannuation environment because I am responsible enough to save for my retirement myself. However, most people are idiots and would end up broke, unemployed, and starving by 60 and forced into crime or begging on the street. 

It is a system catered for the lowest common denominator, but it is necessary. Just look at the US.


----------



## awg (13 March 2011)

There is an article today p30 Sunday Telegraph detailing costings for Age Pension and Aged Care out till 2030..costs to more than double, due to baby boomers retiring.

Points out immigration and tax policy would need to radically change to sustain this.

There will inevitably be huge generational/political friction on this matter.

I dont have the figures to hand, but the cost of tax concessions for super contributions alone is a very high figure that periodically is mentioned as being an area that could be trimmed.

imo, it was politics by John Howard that allowed an entirely tax-free environment for over a 60s, a ludicrous situation that makes no sense to me whatsoever 
( nothwithstanding consumption taxes)..but very hard to reverse from a political perspective.

my    one real change,  introduce a 
" reasonable"  indexed threshold/cap for tax free status.

I do think we have a good system, compared to almost every other country

to me the biggest concern is "black swan" events, that can really mess with your super,  ie long-term systemic issues based upon drawing down against your diminuishing capital (natural resources) but using an expansionary monetary system.

I cant figure a way around that one, in the meantime, keep ticking away


----------



## Knobby22 (13 March 2011)

awg said:


> imo, it was politics by John Howard that allowed an entirely tax-free environment for over a 60s, a ludicrous situation that makes no sense to me whatsoever
> ( nothwithstanding consumption taxes)..but very hard to reverse from a political perspective.




You can expect the baby boomers to keep screwing us, they have too many votes and governments listen to that.


----------



## Julia (13 March 2011)

Knobby22 said:


> You can expect the baby boomers to keep screwing us, they have too many votes and governments listen to that.



 Ah, of course.  We baby boomers are the cause of everything bad.  
Ignore, naturally, that the majority of baby boomers have made the most of their times and saved and invested so as to be able to be as self sufficient as possible.

I so hate these total generalisations of whole generations.

Take your dislike out on governments who make the rules, not the individuals.
I personally resent the suggestion that I'm 'screwing' you or anyone else.


----------



## Bill M (13 March 2011)

Knobby22 said:


> You can expect the baby boomers to keep screwing us, they have too many votes and governments listen to that.




My wife and I are baby boomers and we aren't screwing anybody! We provide for ourselves through all of our investments, we get nothing from the government or from our super yet and pay our taxes. How can that be a bad thing


----------



## Bill M (13 March 2011)

awg said:


> my    one real change,  introduce a
> " reasonable"  indexed threshold/cap for tax free status.



How much brother???

If they start tinkering with it too much people will just stop putting in. That is what we have to be careful of as we could end up at square 1. Some will not want to contribute and they could blow their money same as before and end up on the gov pension.


----------



## GumbyLearner (20 March 2011)

*We pay billions for no benefit
*
by Terry McCrann
Sunday Herald Sun
March 20, 2011 12:00AM

http://www.heraldsun.com.au/busines...s-for-no-benefit/story-e6frfig6-1226024688609

INVESTORS got hit by two bombshells last week. The one they almost certainly didn't notice was actually far more - damagingly - significant to their financial health.

The obvious bombshell was the plunge in the market as a result of the disaster in Japan. That topped off a slide that has taken over $100 billion off the value of Australian shares and set back the long slow recovery in superannuation balances.

Unpleasant as that might be, it's just another part of the ups and downs in the life of any investor in the share market. Arguably, the worst of the news and so its impact on share values is now priced into the market.

Further, Down Under investors should take comfort in the fact that whatever happens going forward they will be in better shape than the shattered communities in Japan.

The other bombshell was more like a silent thief in the night. The disclosure that most Australian savers are paying the investment management community billions of dollars in fees every year to lose them, the investors, money!

Disturbing. And a stunning and irrefutable endorsement of Jeremy Cooper's proposed reforms to super management.

Unsurprisingly, the disclosure came not from the investment management community, but S&P (Standard and Poor's), which among other things runs the indices for the Australian Securities Exchange.

What S&P does is measure the change in the S&P/ASX 200 Accumulation Index over various periods against the performance of active Australian Equity General Funds.

That's to say, what you would have got if you had just put your money passively "into the index" (and paid very minor fees) -- against what you got from having your superannuation or other savings actively managed by a professional manager.

Answer: over the past five years, the index "outperformed" about 71 per cent of fund managers. That's to say, with one not exactly unimportant qualification, you would have more money in your superannuation now if you simply put it into the index than if you'd paid a professional to make the choices. The difference in many cases, probably being the fees paid. Unless you happened to be someone who had one of those 29 per cent of fund managers who did outperform the index. Problem is, they are only pickable after the event.

No, that wasn't my qualification. It goes to what's called asset allocation. This S&P exercise is comparing only share performance against share performance and only local shares at that. Any, indeed, every investment portfolio should have a mix of assets -- shares, foreign and local, cash, maybe property etc.

Most ordinary investors are incapable of doing so properly. So an investment professional should add value with asset allocation and could produce a better bottom line even if underperforming on the simple share-to-index comparison.

Even so, the comparison does raise the very real question of what value do both investment managers and financial planners really deliver for their fees.

Investment managers managing the money and planners directing the money to them. I should note that on the positive side, a select group of managers did outperform the index. Those investing in so-called "small-cap" stocks. At least 70 per cent of those managers beat the index over the latest five-year period.

S&P noted that a high proportion of (underperforming) funds continued to "survive" over lengthy time periods. Investors didn't punish bad performance.

All this aside one very big thing is undeniable. Australians overall are paying billions of dollars every year for, in aggregate, absolutely no benefit.


----------



## Reasons (24 March 2011)

I have had access to and contributed to Super for about 30 years; in the early days because I worked for the government. My father taught me about the rudimentary benefits as he had been paying into it successfully for considerably longer prior to that.

Super rules have provided an opportunity over the years to undertake some extremely effective tax minimization strategies if you put your mind to it. I had a great mentor in Kerry Packer (even though he didn’t know it) once I stopped getting angry about how he paid very little tax legally, yet as a PAYE employee, I theoretically had no similar options.

In the last decade or so, I have treated it as a wonderful low tax environment for building assets for retirement. If you are an employee, you have limited (legal) tax minimization strategies compared to someone who owns a business (pay all business bills and then pay your tax on the remainder).

I have friends who derided me over the years for being involved in Super for all the reasons and more stated in this thread; they will change the rules, you could be dead by 55, you will be too old to use the money, they will take your money, the managers will rip you off, property is better, I want to use the money how I see fit (consume crap), etc, etc. Like others have indicated here, the vast majority are still working and will be for years. 

I fortunately learned very early that, sure, they change the rules, but not retrospectively. They provided occasional one-off opportunities to put in huge amounts of cash, allow you to put in $450K over 3 years of ‘undeducted’ amounts of capital into it, enabled you to salary sacrifice up to $100K p.a., etc. There have been many incentives provided and then withdrawn, but when the opportunity was there, anyone who paid the required attention to the rules of the Super system and utilized it to the ‘nth’ degree got the legal tax minimisation benefits from it. And no doubt will into the future.

People don’t plan to fail, they just fail to plan and undertake the required hard yards when necessary. I worked out many years ago how much capital I needed to fund our lifestyle and at what age, took responsibility for the outcome and used an SMSF to effect the required outcome. If you have made plans to be self-sufficient by the time you are ~55 and can get access to your Super, you are fairly bullet-proof job-wise if you don’t feel like continuing as an employee, or would rather just share trade because managing your assets have actually now become your main business. If you have to wait longer than 55, you just need to plan for the gap to be filled with cashflow outside Super.

A low tax environment is great for trading in and compounding your capital more rapidly over the years. I am now teaching my own kids about the benefits and getting them to think long-term about when they want to be generating enough passive income to be self-sufficient and how much they need in today’s money. I don’t want to ever have to rely on the government and I am teaching my kids the same. And like others in this thread, I am here to tell you at 55 you don’t feel too dead and are confident you still have a few months left to travel and spend some money. 

My experience is that those that deride Super, who don’t plan and ignore the tax benefits offered, do so at their financial peril.


----------



## Bill M (24 March 2011)

Reasons said:


> A low tax environment is great for trading in and compounding your capital more rapidly over the years. I am now teaching my own kids about the benefits and getting them to think long-term about when they want to be generating enough passive income to be self-sufficient and how much they need in today’s money. I don’t want to ever have to rely on the government and I am teaching my kids the same. And like others in this thread, I am here to tell you at 55 you don’t feel too dead and are confident you still have a few months left to travel and spend some money.
> 
> *My experience is that those that deride Super, who don’t plan and ignore the tax benefits offered, do so at their financial peril*.



That was an excellent post Reasons. I too had my doubts about Super when I first started contributing over 20 years ago but I forced myself to put extra in from my salary. This is now paying off big time and I will soon be able to collect and in the mean time I am pumping all surplus cash into it. I like the comment about *"at 55 you don’t feel too dead"* , I feel pretty fit too right now and can still do back packing adventures and go anywhere I like. 55 and 60 years old isn't as far away as some think, it does creep up on you and who the hell wants to be without that pool of of money that you have putting away for all those years when you need it most? Good luck to you.


----------



## awg (24 March 2011)

Bill M said:


> How much brother???
> 
> If they start tinkering with it too much people will just stop putting in. That is what we have to be careful of as we could end up at square 1. Some will not want to contribute and they could blow their money same as before and end up on the gov pension.




That is the question cuz!   agreed on the tinkering though

My reasoning would be assets and income above the threshold for what any govt pension was available.

To pluck a figure from the air, somewhat over $1m per person, indexed.

If you dont: a) your national tax base will erode, b) it becomes an inheritance situation, c) are the assets working effectivly for the national economic good 





Knobby22 said:


> You can expect the baby boomers to keep screwing us, they have too many votes and governments listen to that.




mate, do u like it slow or fast?

my mantra was always to accept every $ of legal entitlement, not  more or less. Anything else does yr head in.

One reason I dont object if people drink, smoke and gamble..they are voluntarily paying big tax on my behalf.


Good post by Reasons..I am really surprised how ignorant/lazy most people are about super, it is a very efficient investment vehicle. Within my SMSF, I can trade with no capital gains, income tax, use leverage for options and CFDs..Imagine giving your returns a 30%+ very low risk boost, and not have to worry about holding for 12 months etc etc


----------



## tothemax6 (24 March 2011)

Reasons said:


> My experience is that those that deride Super, who don’t plan and ignore the tax benefits offered, do so at their financial peril.



As a derider of Super, its more that pay-day is a looong way away, and I would rather 'have' the money, than 'be given it in the distant future'. It is *my* money, and should not taken out of my hand and into government enforced escrow until my hairs are grey. 

Regarding tax, that presupposes that normal tax levels are acceptable. They are not. Tax should simply be low, not low in special circumstances. The ideal (but unrealistic) tax level is 0%.


----------



## jbocker (26 March 2011)

tothemax6 said:


> As a derider of Super, its more that pay-day is a looong way away, and I would rather 'have' the money, than 'be given it in the distant future'. It is *my* money, and should not taken out of my hand and into government enforced escrow until my hairs are grey.
> ...




Just so long as you appreciate the magic of compounding returns, dont lose sight of that, those few bucks put away in your early years will return buckets of money when you have only grey hairs. Just run a simple Excel, with different rates of 'interest' returns to remind you.
It dont need to be in Super but it does need to be put away, a consistent small % of what ever you earn. It is a stupidly simple principle of paying yourself first.
That loooong away pay day, will be surprisingly sooner than you think.


----------



## basilio (26 March 2011)

I like the idea of Superannuation.  I can see the point of having systematic savings into investments that will eventually provide a pension when we have retired.

But I still have some nagging doubts and outright concern on the whole picture.

1)* I think that far too many superannuation plans have costs and fees which take too much of the gains being made.* In particular the for profit schemes and the insurance and bank super plans. The rise of the Industry super schemes which try to ensure that  profits are made for members not the providers is a big step in the right direction here.

2) *Even inside the industry super schemes I feel the ticket clippers managing the myriad  share funds are taking too much of the value*. Of even more concern is  the fact that the opportunity of charging high fees encourages financial advisers to push dishonest projects. Look at Westpoint, Pine plantations, agricultural schemes.

3)* I'm not convinced that the super schemes will be able to handle  the payout of pensions adequately*. As I see it we are still in the relatively early stages of national super schemes and  we have not seen how they will work when they are required to make continual payments to members. This will require  the paying of actual cash and probably from dividends and share sales  as distinct from simply pointing to higher paper share value to show growth.

4) *I have misgivings about the proposition that the markets and therefore the investors have been as profitable as claimed*. For instance  just because the ASX 200 is rising doesn't mean all shares are doing well. In fact The ASX 200 is always changing as  failing companies are removed and newer ones take their place. This it is an index of winners whereas funds will have the winners *and the losers *in their  portfolios. 

5)* I don't trust the financial services industry as a whole. *When I look at the whole picture of large investment banks, deal making, betting on the minute by minute rise and fall of shares, indexes, futures, derivatives etc I can't see how  this is helping the longer term investment in industrial development. When I look at the stupendous profits taken out as cash by  participants in these institutions I can't see  how there will be sufficient left behind to actually deliver the  longer term pensions we are looking for. It seems to me that much of  the industry is a big casino with the house taking the lions share of the  profits.

And our superannuation savings are intrinsically tied up with this game. Any thoughts ?


----------



## Reasons (26 March 2011)

basilio said:


> 1)* I think that far too many superannuation plans have costs and fees which take too much of the gains being made.*
> 
> 2) *Even inside the industry super schemes I feel the ticket clippers managing the myriad  share funds are taking too much of the value*.




Then take control, do your research and find a good one that minimises fees, and then pay them until you have enough assets to sack them and start your own SMSF. I have watched people all my life procrastinate and find reasons not to start. There are heaps in this thread. Most use all the reasons you have indicated and more to do very little until it is too late. Go and talk to a pensioner about how how much they get paid from the Govt. and about their lifestyle. If constantly struggling to pay bills and a short bus trip per year sounds good to you, do nothing; my money is on you rapidly adjusting your ideas about planning for your financial future if you had that conversation.



basilio said:


> 3)* I'm not convinced that the super schemes will be able to handle  the payout of pensions adequately*.




That is not your problem if you take control of your finances instead of acting like a victim of some phantom force. That is why there are so many SMSF's out there, lots of people reaslise they have total control if they want it in an excellent low tax environment. Once you have accumulated ~$100-200K, setup your own SMSF and then invest as you see fit to ensure you get the amount of capital you want for when you retire.



basilio said:


> 4) *I have misgivings about the proposition that the markets and therefore the investors have been as profitable as claimed*.




Therefore learn about trading or investing, develop a plan and strategy that works and compound your assets over time so you meet your wealth goal at some age down the track, and have some fun spending it while you are young enough to do so. Once again, you are only a victim if you do not learn and take control. The majority of the population are victims and procrastinators by choice as they don't work on their financial intelligence. The Super industry is full of these victims; the choice is yours.



basilio said:


> 5)* I don't trust the financial services industry as a whole. *




As above, then do somethig about it; you have the power, or pay someone to show you how. I have paid finance advisors lots of money over time directly or through fees. I always used their skills to learn from them and then sacked them once they had taught me all they knew. It is a bit like share trading courses, most people pick the wrong ones or are too tight to pay for good ones. If you do your research, be prepared to kiss a few frogs to find what you want, it pays high dividends over time. You won't learn what you need to know from the majority of people on these types of forums. I mean that nicely, but look at your odds. There are only ~174K high net worth individuals in Australia (0.8% of the population), and as successful investors they are the sources of info that, I personally, would like to tap into as they have a track record in managing and making money and learning from. Your chances of one of them responding to you here is therefore low.



basilio said:


> And our superannuation savings are intrinsically tied up with this game. Any thoughts ?




Yep - do little or nothing like the majority of the population and then become an 'If only' in your 50's and 60's and broke like them, or do something about it now by planning and executing that financial plan to achieve you goal. 

Your financial and life choice - Victim or Self-Controlled Outcome?


----------



## Garpal Gumnut (26 March 2011)

Although still many decades away from it, can the nursing home get their hands on your super like they can make you sell your home? when its time to join the club.

gg


----------



## Julia (26 March 2011)

Reasons, I agree with everything you've suggested.  On the whole the population is way too passive and unwilling to take responsibility for their own outcomes.

However, I didn't take from Basilio's post that he personally was feeling unable to take charge of his own investing, rather that he was reflecting on the industry as a whole.

Basilio, you might like to comment further here?


----------



## tothemax6 (26 March 2011)

jbocker said:


> Just so long as you appreciate the magic of compounding returns, dont lose sight of that, those few bucks put away in your early years will return buckets of money when you have only grey hairs. Just run a simple Excel, with different rates of 'interest' returns to remind you.
> It dont need to be in Super but it does need to be put away, a consistent small % of what ever you earn. It is a stupidly simple principle of paying yourself first.



Well this is more or less why I started this thread. I'm just saying that I am more than capable of saving, without the fist of the government demanding I save for my own good. I probably save more than most anyway, but not for when I am 40 years older, but for when I am 5 years older, and 5 years older after that etc etc. 

Also, regarding the compounding returns: yes people are always keen to point out the size of the end-sum. However, people always miss out the end-age. The situation of '10k when you are 20' is arguably more valuable than '1mill when you are 70'. There's always a balance. Or as my old man would say 'you can't take it to your grave'.


----------



## Reasons (26 March 2011)

Garpal Gumnut said:


> Although still many decades away from it, can the nursing home get their hands on your super like they can make you sell your home? when its time to join the club.
> 
> gg




I don't know the answer, (hoping to avoid for quite a few years), but I will not leave it at that until it is too late. There will be ways to minimise any exposure prior to that time and a bit like planning for Super years ahead, there will be trusts or other financial mechanisms that I can invoke well prior to the time that will minimise exposure if that becomes the logical option.


----------



## Garpal Gumnut (26 March 2011)

Reasons said:


> I don't know the answer, (hoping to avoid for quite a few years), but I will not leave it at that until it is too late. There will be ways to minimise any exposure prior to that time and a bit like planning for Super years ahead, there will be trusts or other financial mechanisms that I can invoke well prior to the time that will minimise exposure if that becomes the logical option.




I don't think it's that easy to avoid losing dough when the time comes to go to a home.

gg


----------



## Reasons (26 March 2011)

tothemax6 said:


> Well this is more or less why I started this thread. I'm just saying that I am more than capable of saving, without the fist of the government demanding I save for my own good. I probably save more than most anyway, but not for when I am 40 years older, but for when I am 5 years older, and 5 years older after that etc etc. .




 Unfortunately you are one of the few who can and the Govt. knows it. Gerry Harvey has most people's money by the time they are 50 as they have still not done any financial planning and consider the pension a gold mine.



tothemax6 said:


> Also, regarding the compounding returns: yes people are always keen to point out the size of the end-sum. However, people always miss out the end-age. The situation of '10k when you are 20' is arguably more valuable than '1mill when you are 70'. There's always a balance.




Think of it this way, for every $100K you have, if you can get 10% interest, it will generate $10K of passive income. So someone is giving you that $10K without getting out of bed fairly early in your life and the more $100K's the better. Your can use it when you are younger, but you might live to 80+ and I know some fairly active 70+ year olds who appreciate having significant capital to enable them to maintain their active aged lifestyle and those nasty medical requirements.



tothemax6 said:


> 'you can't take it to your grave'.




I often hear this saying, but interestingly it only comes from those who have few assets.


----------



## Reasons (26 March 2011)

Garpal Gumnut said:


> I don't think it's that easy to avoid losing dough when the time comes to go to a home.
> 
> gg




My guess, is that if you just guess, you will most certainly lose dough. My experience is that if you ask questions, go talk to accountants and then lawyers if necessary, and do your due dilligence, there most certainly will be a way.


----------



## basilio (26 March 2011)

Julia said:


> Reasons, I agree with everything you've suggested.  On the whole the population is way too passive and unwilling to take responsibility for their own outcomes.
> 
> However, I didn't take from Basilio's post that he personally was feeling unable to take charge of his own investing, rather that he was reflecting on the industry as a whole.
> 
> Basilio, you might like to comment further here?




Spot on Julia. It is well and good to take charge of ones finances, find the right investments and advisers  and so on.  But that is simply not practical for  most people. They either don't have the skills, the time or the inclination to go through the whole box and dice. (And frankly if we are not careful those of us who do focus our attention on securing our financial future can become too obsessive - to the detriment of living more rounded lives...)

The concept of a well run superannuation scheme is that it should be effective at providing a worthwhile savings vehicle for people without them personally having to sweat over the details.

My observations still stand. In effect our superannuation funds look like a bucket we are always filling with water but with a number of holes  that just continually reduce the amount of water we save and the  overall risk that a clumsy person, a corporate crook or a black swan event will knock the whole thing over.

The answers?  I threw up a proposition earlier in this discussion where I suggested that the government should offer a simple  super account with a guaranteed return of 3% real (above inflation) .  It wouldn't be compulsory - simply an option.  I see this as  providing a choice in the market place that would act as a powerful incentive for private superannuation providers to keep their fees low and offer at least as good a result. 

Of course the entire industry would go apoplectic at such an idea screaming that the government must stay out of the marketplace, government waste BS,BS.  But in fact guaranteeing such a modest return shouldn't be hard to equal or better if the industry was honest and didn't see super as simply a milk cow for their own financial future.

And  back to thinking about government ownership of financial institutions.. When we had government owned State and Commonwealth banks, the industry made good profits but were unable to  charge the fees or pay themselves the wages they currently get away with.

Having seen how private enterprise works I just can't see how more rules, inquiries or regulations will work better than establishing a simple competitor that sets a realistic benchmark for the players.


----------



## basilio (26 March 2011)

Reasons said:


> My guess, is that if you just guess, you will most certainly lose dough. My experience is that if you ask questions, go talk to accountants and then lawyers if necessary, and do your due dilligence, there most certainly will be a way.




I have now seen a number of relatives go into homes. It is very, very hard to avoid being stripped of as much of your assets as they can possibly get away with.  

Could you get the right lawyers and accountants to come up with a scheme that will reduce this?  Perhaps but I suspect you might be just diverting the money from one shark to another.


----------



## Reasons (26 March 2011)

Garpal Gumnut said:


> I don't think it's that easy to avoid losing dough when the time comes to go to a home.
> 
> gg




I will give you an example of how the Kerry Packers of this world plan ahead, but the rest of us are too stupid to do it because we don't think like they do, or simply assume it can't be done without researching.

They are always thinking about tax implications, the legal minimisation of the same, and maximising the benefits of any capital they have now or when they are dead.

The mainstream person has a will that when they die the assets go to the designated recipients. If they have life insurance it gets paid to the estate and distributed as the will directs. If there are dependents in that will and they are under 18, any interest or other return on the money invested gets taxed at high rates once they earn over ~$460 p.a. If the recipient is an adult in a relationship that is rocky, the money is now within legal reach of your child's partner. If money is assigned to grandchildren it is not necessarily safe from abuse.

The rich often use something called a Testamentary Trust which is a will with all the bells and whistles. The trust does not exist until a person is dead. When the assets are divided they go into the now existing Testamentary Trust and are isolated from outside partners or relations until that money is moved out of the trust by the recipient.

Any dependent under 18 child’s assets in the trust is now treated like an adult for taxation purposes, complete with the tax free threshold of ~$6K. So the environment now affords a much better income to the remaining carer that most of the population (who can less afford it) don't take advantage of. The money is isolated from any feral outlaws until moved and grandchildren can be more safely accommodated through timed access in the future. Who said you can't control your money from the grave.

These trusts cost the huge sum of about $500 to setup. But who ever told you about them? It is one of the tricks I learnt from paying for advice many years ago. (and NO I am not a finance advisor or anything close to it before some brainiac suggests it )

Over time I have learnt that there are many financial things most of us don’t know about, but if you ask questions early enough of the right people, there is always a way, because someone with money has no doubt done it.


----------



## awg (26 March 2011)

Reasons, agreed with every word.

Also utilise binding death nominations in conjunction with Corporate trustee.


with respect to retirement home prospects, save properly, or live like a mangy dog

dont expect someone else will wanna pay

In Australia, a sense of entitlement exists that is entirely out of kilter to not only 
most of the world, but flies in the face of history and reality imo.

No criticism intended to anyone in particular, I am as greedy a hypocrite as the next


----------



## Reasons (26 March 2011)

basilio said:


> Spot on Julia. ...They either don't have the skills, the time or the inclination to go through the whole box and dice.




A good description of most financial advisors and managed funds and probably Super, but I now see where you are coming from and going to in that you have no interest in taking control. I can identify with your position as I have been there, I just made a decision many years ago that assuming the position by grabbing my ankles with advisors and managed funds was not pleasant and decided to take corrective action. It has taken some time and effort to do it and I can (almost) understand why most don’t do the same. You definitely have to have an interest in doing it.



basilio said:


> The concept of a well run superannuation scheme is that it should be effective at providing a worthwhile savings vehicle for people without them personally having to sweat over the details.
> My observations still stand. In effect our superannuation funds look like a bucket we are always filling with water but with a number of holes that just continually reduce the amount of water we save and the  overall risk that a clumsy person, a corporate crook or a black swan event will knock the whole thing over.




The tough call on this one is the proverbial; can you have your cake and eat it? We want someone else to do our financial management for us so that we can just go and have fun, but want to can their fees and low performance and likely risk to our capital, and want to change/add to the system yet again. I always think about all the people I have paid over the years to assist me learn and why they were not retired or share trading on some tropical island. The upshot is that the majority of advisors/fund/Super managers have about as much idea as you do (or less if that scares you more) about beating the index (70% didn’t last year I believe) and making money.



basilio said:


> The answers?  I threw up a proposition earlier in this discussion where I suggested that the government should offer a simple  super account with a guaranteed return of 3% real (above inflation) …But in fact guaranteeing such a modest return shouldn't be hard to equal or better if the industry was honest and didn't see super as simply a milk cow for their own financial future.




Unfortunately inflation is central bank (RBA etc) subjective in that it is based on core items, not irrelevant and variably priced trivia like food and energy, so your official 3% (or whatever) is not bullet proof. The Govt. also has age-based drawdown rules of percentages of how much you MUST take out per year, so that will have some effect on the amount you need saved against your proposed longevity (see latest drawdown % below). 

Under 65
 4% (2% until 30 June 2011)
65-74
 5% (2.5% until 30 June 2011)
75-79
 6% (3% until 30 June 2011)
80-84
 7% (3.5% until 30 June 2011)
85-89
 9% (4.5% until 30 June 2011)
90-94
 11% (5.5% until 30 June 2011)
95 and over
14% (7% until 30 June 2011)



basilio said:


> (And frankly if we are not careful those of us who do focus our attention on securing our financial future can become too obsessive - to the detriment of living more rounded lives...)




Yep, that is so very true and needs careful monitoring; one is a long time dead I am informed. I think you do sacrifice some things for the independence, but there's that damn cake again, in a different form, eh?


----------



## Judd (26 March 2011)

Reasons said:


> The rich often use something called a Testamentary Trust which is a will with all the bells and whistles.




You don't have to be that rich.  Consider how much your residence may be worth at sale for a start.  The full term is a Beneficiary Testimonial Trust Will  - I know cause I have one.  Also give consideration to making the Executor anyone but a relative, eg, an accounting firm and legal firm.  Sure they will charge hourly rates but (a) it keeps the Public Trustee out of the equation and they charge way over the odds, (b) they are impartial and (c) both need to agree.  If you have super consider a non-binding death nomination for its flexibility.

Also consider a Corporate Trustee arrangement for your Will.  As the CT can act as trustee of multiple wills and estates, it can accommodate various family members, eg where the wife or husband dies first and the remaining partner is not only named as executor but also trustee and beneficiary of the deceased persons estate.

And $500 is not even a rounding error if you have a residence alone valued at $600k+

Just my


----------



## Reasons (26 March 2011)

Judd said:


> You don't have to be that rich.  Consider how much your residence may be worth at sale for a start.  The full term is a Beneficiary Testimonial Trust Will  - I know cause I have one.  Also give consideration to making the Executor anyone but a relative, eg, an accounting firm and legal firm.  Sure they will charge hourly rates but (a) it keeps the Public Trustee out of the equation and they charge way over the odds, (b) they are impartial and (c) both need to agree.  If you have super consider a non-binding death nomination for its flexibility.
> 
> Also consider a Corporate Trustee arrangement for your Will.  As the CT can act as trustee of multiple wills and estates, it can accommodate various family members, eg where the wife or husband dies first and the remaining partner is not only named as executor but also trustee and beneficiary of the deceased persons estate.
> 
> ...




A good follow-up Judd and something I did not make clear. For a measly ~$500 anyone can setup one and even if you have no assets, but sensibly have large insurance policies for your family protection, how can you not afford not to have one if you have dependents?

It is all about your financial intelligence and it does not take too much effort to gain that over time.


----------



## Bill M (26 March 2011)

tothemax6 said:


> Well this is more or less why I started this thread. I'm just saying that I am more than capable of saving, without the fist of the government demanding I save for my own good. I probably save more than most anyway, but not for when I am 40 years older, but for when I am 5 years older, and 5 years older after that etc etc.



I was where you are now 25 years ago. What I did was invested outside of super, there is nothing preventing you from not putting in. At the time I did put in my 9% on top of the SG level as it wasn't all that much and I thought a bit of extra super for the future is better than none. So the 9% aside everything else went into my own investments outside of super. I retired many years prior to my preservation age, you can do this too just don't put in.

Fast forward to preservation age and now I am moving assets into super in order to set up a long term allocated pension with tax benefits.

Can we agree that at least the Superannuation Guarantee should remain. It's better for those that don't, can't and never will save that something remains, these are the very people it was introduced for, cheers.


----------



## Julia (26 March 2011)

Garpal Gumnut said:


> Although still many decades away from it, can the nursing home get their hands on your super like they can make you sell your home? when its time to join the club.
> 
> gg



This is probably a whole separate subject.

I'd suggest our aged care should be regarded in the same light as our provision for our active retirement years, and therefore that the level of care one can access is dependent on what we're prepared to pay.

In other words, more of a user pays system than applies at present.

What we have now is a vastly underfunded age care sector and as a result poor care with too few staff and resources.

If it were to come down to the choice between accepting the currently available level of care, i.e. potentially lying injured without help, sitting in your own excrement, and starving because no one can help to feed you, wouldn't you pretty happily apply the proceeds of some of the sale of your home to ensure you don't endure such misery?


Aged care is like mental health.  The consumers are not in a position to make much noise so it's convenient for governments to ignore the woeful level of care.

We are all going to get old, some of us will be physically feeble and helpless, and others will be demented.   Surely we should be prepared to expend some of what we have accumulated over so many years to ensure our final years are spent with as much dignity and comfort as possible.


----------



## Judd (27 March 2011)

Garpal Gumnut said:


> Although still many decades away from it, can the nursing home get their hands on your super like they can make you sell your home? when its time to join the club.
> 
> gg




The short answer is yes and every other asset you may have.

Presently the Accommodation bond applies to low care. This would mean your SMSF superannuation pension income would cease and you would have to make do with the aged pension and the earnings on about $35,000. On your death the bond would be paid to your estate.  There is a proposal to also apply the Accommodation bond to high-care.

An aged care bond is an interest free loan to the accommodation provider. The provider can invest it and is supposedly required to use the interest to improve the buildings or provision of care.  There is apparently no upper limit on the amount of the bond - I have seen demands of over $2M in bond money.

The accommodation provider can lawfully dip into the bond to the tune of a maximum $280 per month for 5 years.

As far as I can find out there is no integrity checking that the accommodation provider actually uses the interest for building improvements or care and not to fund their daughter's university education. Nor does there to be any real checks preventing the provider actually dipping into the bond itself beyond the legal amount.  Have seen cases where over $10m of bond money in one aged-care facility has gone.  Not the first and it will not be the last. 

Also, what is not spelt out in a lot of documentation is that you can pay the bond by installments (have a close read of the legislation and related material.)  Of course, you do not spring this one until *after* you agree to the amount of the bond because, parasites being parasites, the offer of accommodation may be withdrawn.


----------



## Tyler Durden (29 March 2011)

Hey all, just a question I had after looking at some super documents...I noticed that the average return for the investment option of "safe" was like 2 or 3%...how can this be? Why can't the fund just put our money into an account like ING or Ubank and earn the normal 5%???


----------



## tothemax6 (29 March 2011)

Tyler Durden said:


> Hey all, just a question I had after looking at some super documents...I noticed that the average return for the investment option of "safe" was like 2 or 3%...how can this be? Why can't the fund just put our money into an account like ING or Ubank and earn the normal 5%???



Mostly likely because they are taking their cut from the interest.


----------



## Tyler Durden (29 March 2011)

tothemax6 said:


> Mostly likely because they are taking their cut from the interest.




Oh I didn't think about that 
But why should I pay for them to put my money in the bank~~~


----------



## Bill M (29 March 2011)

Tyler Durden said:


> Oh I didn't think about that
> But why should I pay for them to put my money in the bank~~~




Both my wife and I have Industry Super funds. Both are earning about 4.7% on the cash fund for the last 12 Months. In my own account out of Super I am getting 6.51% for my cash. It is poor really that they can't do a bit better, however the funds figures are after tax and management fees. You can choose your fund, safe means mostly cash or bonds, bonds have been going backwards in the last few Months. You might need to check out exactly which fund you are in and you might need to change, you could go 100% shares and watch it drop 50% like it did in 2009.


----------



## konkon (29 March 2011)

Superannuation is a good thing for a year or so until the money runs-out!


----------



## Julia (29 March 2011)

Bill M said:


> It is poor really that they can't do a bit better, however the funds figures are after tax and management fees. You can choose your fund, safe means mostly cash or bonds, bonds have been going backwards in the last few Months. You might need to check out exactly which fund you are in and you might need to change, you could go 100% shares and watch it drop 50% like it did in 2009.



That's a realistic summary of what's available and the best possible recommendation for building up enough capital to have your own SMSF.

A friend of mine about midway through the GFC switched to the most conservative option in her fund, cash, and unbelievably didn't even ask what interest rate it would be earning.  When she told me she had done this I suggested she find out.  It was earning 2%!!!!  

This is an otherwise sensible, well educated person.
******* unbelievable that people can be so careless and unconcerned, especially when they have nowhere near enough in Super to fund their retirement.

Has anyone figured out the mentality happening here?
Is it that their Super balance is so low that they realise they will have little other than the government pension to rely on in retirement anyway, so there seems not much point in trying to maximise investment options?


----------



## Reasons (30 March 2011)

Julia said:


> A friend of mine about midway through the GFC switched to the most conservative option in her fund, cash, and unbelievably didn't even ask what interest rate it would be earning...It was earning 2%!!!!
> 
> This is an otherwise sensible, well educated person.
> 
> ...




Perhaps Occam's Razor can explain it (the simplest answers are the most likely). Financially lazy and denial. 

Easier to trust/blame someone else with/about your future wealth status so you don't have to take responsibility, live within nasty things like budgets and learn how to invest. 

Remain in denial that eventually you get older and wait until a week before you retire to ask an advisor if the maximum Govt. pension at $364.65 for singles and $549.70 per week for a couple can afford you the required jet-setting lifestyle at 65, thereby conclusively confirming it was your Super fund manager and the Fed Govt.'s fault.


----------



## Julia (30 March 2011)

Sounds about right to me, Reasons.

The bit that puzzles me, though, is that this person is in all other ways diligent, thoughtful, hard working, and very savvy about most things.
It's as though a screen comes down over her brain when money and how to acquire and keep it is the issue.


----------



## tothemax6 (30 March 2011)

Tyler Durden said:


> Oh I didn't think about that
> But why should I pay for them to put my money in the bank~~~



Like I say, super is a bad thing. Its not really your money, its a future promise to receive some money.

At the very least people should refuse to do extra super contributions. 0% contribution will be fine thanks.


----------



## Reasons (30 March 2011)

tothemax6 said:


> Like I say, super is a bad thing. Its not really your money, its a future promise to receive some money.




I think you are just bored, but in case you somehow actually believe what you wrote, take an interest, accumulate some dollars, get an SMSF and then you will most surely have control (and take responsibility) for every cent through your own bank accounts, shares, real property, etc. Hell, you can even take it all out of your fund and roll around in it if you want; probably just before you get fined and lose it all to the tax man. It's definitely not a future promise and doesn't get more real than that.


----------



## Mavis (3 April 2011)

You don't need a SMSF to take more control of your super. Like many of you my super was going no where fast in an industry super fund. I had a review done and rolled my super out and on to a platform that allows me to trade direct shares. It also gives me access to managed funds & term deposits.


----------



## Bill M (3 April 2011)

Mavis said:


> I had a review done and rolled my super out and on to a platform that allows me to trade direct shares. It also gives me access to managed funds & term deposits.




Who did the review and who offers this platform? What is the catch? You got to pay for this type of access somewhere somehow.


----------



## Reasons (4 April 2011)

Bill M said:


> That was an excellent post Reasons. I too had my doubts about Super when I first started contributing over 20 years ago but I forced myself to put extra in from my salary. This is now paying off big time and I will soon be able to collect and in the mean time I am pumping all surplus cash into it. I like the comment about *"at 55 you don’t feel too dead"* , I feel pretty fit too right now and can still do back packing adventures and go anywhere I like. 55 and 60 years old isn't as far away as some think, it does creep up on you and who the hell wants to be without that pool of of money that you have putting away for all those years when you need it most? Good luck to you.




Hi Bill

I can empathise with the high majority that think it is a waste of time, etc. It took my ol' man from my mid/late teens to mid 20's to totally knock the benefits of Super and other finance stuff into my head. Knowing what it took to get my head around it, I am patiently doing the same with my own kids. They are getting the idea and in the case of Super using the $1K co-contribution every year (all still at uni and working part time).

I actually hadn't done the calcs on the Super Guarantee for them, so when I did it for some response on a thread here somewhere, it is brilliant for Gen Y's at 60 and a lot lower effort compared to the BB's . As per what you would have seen over your life time, 90% will generally ignore Super and so miss the potential dollar targets accordingly by not contributing enough (and then it will be someone else's fault). The way I look at it is that I got taught some good tricks early and have taught myself a lot more over time and met my targets. If I can impart that to my own kids early in life and have them financially smarter than me at a much earlier age with short, medium and long-term goals, hopefully they will do well themselves and teach their own kids better again. You can but try, but it seems to be going OK so far.

You are close to self-funded retirement by the sounds of it so also now know that Gen Y's are going to get to 60 in the blink of an eye and even the very few that achieve ~$1.5m (today's money) in their Super will be kicking themselves that they did not put in that bit extra to increase it much higher. All things being equal, they are going to live a lot longer than the BB's and 60 might be middle aged. As you indicated, too much is not enough in Super at 60.

I always associate Super with life insurance; you are betting on dying and they are betting that you don't ('cause they have the stats to back themselves). Based on their stats, my chances to live and collect on Super were acceptable and some delayed gratification by salary sacrificing into Super was warranted. Like you, my health is really good, so now get to go travel OS, etc, and will keep doing so whilst healthy - lots more of the world to see yet. If I had lost the bet, it wasn't bad fun anyway. But there is no doubt about it, delayed gratification takes some effort and self-discipline, as you would well understand. I wish you well with your targets and hope you exceed them early. 

Cheers


----------



## Mavis (4 April 2011)

Bill M said:


> Who did the review and who offers this platform? What is the catch? You got to pay for this type of access somewhere somehow.





JB Global. Of course there is a cost, control doesn't come for free. The fee is 0.98% p.a. which wasn't much more than my industry fund and alot less than the establishment and ongoing costs of a SMSF.


----------



## Bill M (4 April 2011)

Thanks for your quick response Mavis, I will look into that, sounds ok.


----------



## sptrawler (7 November 2011)

There is allways someone wanting to move the goalposts.

http://www.adelaidenow.com.au/money...ash-for-retirees/story-e6fredku-1226187437152


----------



## Julia (7 November 2011)

I gather from the article that this is just a suggestion at this stage.  Why can't the funds adequately plan to be able to support X number of members taking out lump sums at retirement?  Surely they've done the demographic research which tells them how many will be retiring and when?

However, there's a simple answer.  Make sure you are financially literate and open your own SMSF.  Then you can be the architect of your own retirement.

Not much point in whining about the public funds if you're not prepared to take responsibility yourself.


----------



## Starcraftmazter (8 November 2011)

IMO super was put in place by boomer politicians as a way to deal with the demographic phenomena of baby boomers retiring and pulling their money out of the market - ie. forcefully dump it on all the younger generations, so that they get to keep their loot. Bastards.


----------



## SuperGlue (9 June 2013)

Front page article in MarketWatch website this morning about superannuation in the US.

"To retire securely, save like an Aussie"

http://blogs.marketwatch.com/encore/2013/06/06/to-retire-securely-save-like-an-aussie/

Quite surprising that they don't have it over in the US.

As usual comments & debates about the pros and cons. Where the money is coming from & the govt. will try to get hold of it, we have social security already......etc. interesting times for US


----------



## SuperGlue (9 June 2013)

Finally we can teach US a lesson................... on savings.


Anyone a member of Marketwatch, maybe post a link to this website.


----------



## FxTrader (12 June 2013)

SuperGlue said:


> Front page article in MarketWatch website this morning about superannuation in the US.
> 
> "To retire securely, save like an Aussie"
> 
> ...




The foundation article is here... http://www.businessweek.com/articles/2013-05-30/in-australia-retirement-saving-done-right

The contents of the article are mostly correct but our super system has it's faults.  For one thing it has created a parasitic class of super fund managers that skim hundreds of millions of dollars in fees for doing next to nothing in return other than administration and compliance (their packaged investment strategies are simple and mechanical).  For SMSF I have to pay around 2K every year for just accountancy and auditing.

The problem with glorification of the current system is that, given current life expectancy, the sums accumulating in super in most cases are not adequate to fund retirement, government assistance will be required at some stage.

It seems highly probably that a future government will be compelled at some point to start taxing income for super in pension phase for those over 60+.  While I accept this may be necessary, it seems far more sensible now to let baby boomers plough more that 35K a year concessionaly into super so they will be less of a drain on the public pension system in the future.  This was the case previously.


----------



## Julia (12 June 2013)

Agree 100%.


----------



## Intrinsic Value (12 June 2013)

FxTrader said:


> The foundation article is here... http://www.businessweek.com/articles/2013-05-30/in-australia-retirement-saving-done-right
> 
> The contents of the article are mostly correct but our super system has it's faults.  For one thing it has created a parasitic class of super fund managers that skim hundreds of millions of dollars in fees for doing next to nothing in return other than administration and compliance (their packaged investment strategies are simple and mechanical).  For SMSF I have to pay around 2K every year for just accountancy and auditing.
> 
> ...




Agree with everything written here.

And especially agree with letting people salary sacrifice larger amounts at the lower tax thresholds as a way to boost super rather than having the income in the retirement phase tax free. This would be much more revenue positive for the govt as well. 



I really dont understand this bit at all.


----------



## sptrawler (13 June 2013)

Julia said:


> I gather from the article that this is just a suggestion at this stage.  Why can't the funds adequately plan to be able to support X number of members taking out lump sums at retirement?  Surely they've done the demographic research which tells them how many will be retiring and when?
> 
> However, there's a simple answer.  Make sure you are financially literate and open your own SMSF.  Then you can be the architect of your own retirement.
> 
> Not much point in whining about the public funds if you're not prepared to take responsibility yourself.




Talking about SMSF, here is a bit of news. 


When the new penalty system was first proposed the value of a penalty unit was $110. In December 2012 the value of penalty units was increased to $170. This means the lowest fine payable by trustees of an SMSF have increased from $550 to $850. The maximum has increased from $6600 to $10,200

Read more: http://www.smh.com.au/business/smsf...hefty-price-20130613-2o6xc.html#ixzz2W645vGRS


----------



## sptrawler (14 June 2013)

It is poignant, that there is a resurgence, when super funds have to report returns.

http://www.smh.com.au/business/markets/shackles-released--stocks-jump-20130614-2o7r7.html

Don't want a negative this year, when they have been talking it up all year.


----------



## MrBurns (28 June 2015)

Anyone have any advice re good Super Funds ?


----------



## Bill M (28 June 2015)

MrBurns said:


> Anyone have any advice re good Super Funds ?




Yes I do MrBurns, it is ING Living Super, I have an account with them.

It is almost like having your own SMSF, you can pick and choose where you want your money to go. You can also open the shares option as well.

From their website "Trade shares real-time online. Choose from the S&P/ASX 200 index, selected Exchange Traded Funds and Listed Investment Companies." Link: http://www.ingdirect.com.au/superannuation/living-super.html

You can not invest in everything, for example I can't buy hybrids.  Otherwise I don't go outside the top 200 stocks anyway so it suits me well.

The best part is they do everything for you accounting and tax wise. You do not have to do anything but allocate capital where you see fit. It is classed a normal super fund but you get to make the decisions.

I've had 6 or so different funds in my lifetime but this one is the best. Check it out.


----------



## MrBurns (28 June 2015)

Bill M said:


> Yes I do MrBurns, it is ING Living Super, I have an account with them.
> 
> It is almost like having your own SMSF, you can pick and choose where you want your money to go. You can also open the shares option as well.
> 
> ...




Thanks Bill, I'll check it out.
It's for a relative who cant choose shares for themselves, they just want the money to be somewhere safe and earning a little better than a TD so this may not suit.


----------



## sptrawler (28 June 2015)

MrBurns said:


> Anyone have any advice re good Super Funds ?




I helped my MIL join Australian Super, she was 74 at the time, she hasn't complained and now is 82.

She may well be just holding her tonque, but that would be unusual.

They may be worth checking out, but I have no personal knowledge.


----------



## systematic (28 June 2015)

sptrawler said:


> I helped my MIL join Australian Super, she was 74 at the time, she hasn't complained and now is 82.
> 
> She may well be just holding her tonque, but that would be unusual.
> 
> They may be worth checking out, but I have no personal knowledge.





Australian Super are huge (I think they are still the biggest).  Due to size and the fact that they're an industry fund, you're going to get good rates on things like insurance along with the Super fees.  They have options for those who want to be more active, but they also have the usual ready-to-go options (balanced, high growth etc).


----------



## Wysiwyg (28 June 2015)

Yes the Super Funds with self managed options are the go for investors with market experience I reckon. Took that option myself last year.


----------



## MrBurns (28 June 2015)

sptrawler said:


> I helped my MIL join Australian Super, she was 74 at the time, she hasn't complained and now is 82.
> 
> She may well be just holding her tonque, but that would be unusual.
> 
> They may be worth checking out, but I have no personal knowledge.




Sounds like what is needed from what you and systematic have said, thanks.


----------



## dyna (12 July 2021)

Can't find the regular super thread so this one will have to do. (Why do there have to be so many?)

Treasury's latest 5 yearly Intergenerational Report (IGR) of 28th of June, predicts super will be worth  10 times the $3 Trillion value now, in 40 years time.
The ASX, according to the RBA has grown at the GDP rate, of 5 % for the past 20 years, so that could be worth $14 Trillion by then, too.
Already, super is bigger than the ASX by about $ 1 Trillion, but could be 20 times bigger in 40 years. That future super pile could become like Norway's sovereign wealth fund. That is, too big for it's own domestic market and forced to invest in other world markets.
For those lefties, fretting about overseas investors taking their mining dividends back home , as at December 2020, Australian foreign investment has  exceeded the incoming capital by $1/4 Trillion.
Our super is going to get really big. Certainly bigger than piddly Norway . Maybe one of the biggest in the world.


----------



## Dona Ferentes (10 November 2021)

Superannuation ... Yep. A good thing. Great even? Perhaps not for members, though!



> Cbus has told the NSW Supreme Court it could become insolvent if it is not allowed to use members’ money to build a multimillion-dollar war chest to pay fines.



better give some attribution:

_Industry funds may slug members with a fee increase of close to $1 billion to bail out badly behaving directors, as the sector grapples with a new law that threatens to render non-profit boards insolvent.









						Super fee hikes could near $1b
					

Cbus has told the NSW Supreme Court it could become insolvent if it is not allowed to use members’ money to build a multimillion-dollar war chest to pay fines.




					www.afr.com
				



_
(haven't seen anything on ABC; Baz, what about The New Daily?)


----------



## sptrawler (11 November 2021)

Dona Ferentes said:


> Superannuation ... Yep. A good thing. Great even? Perhaps not for members, though!
> 
> 
> better give some attribution:
> ...



Yep super funds similar snouts, in different troughs.


----------

