How to retire early... or simply survive

[Skate]

Resurrected from an old thread from 21st February 2016 that is still relevant: "Why do Australian stocks provide higher dividends compared to rest of the world?"

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systematic posted:

Dividend imputation.

This is a nice brief paper
http://bettertax.gov.au/files/2015/06/Fidelity_Worldwide_Investment.pdf

Hope this helps...
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This PDF helps immensely: Myth-busting dividend imputation

I've listed just 2 of 11 myths published by 'Fidelity Worldwide Investment' that explains why Bill Shorten's plan to alter the Franking Credit Refund is fundamentally flawed.

Myth 7: Abolishing franking would boost government revenue.
Reality: Franking creates integrity in the corporate tax base. Removing franking would give rise to behavioural changes that could significantly erode the corporate tax base, leaving the national accounts – and retirees – worse off.

Myth 9: Franking creates a risky equity-market bias for retirees.
Reality: Franking does create a bias toward high-quality, well-managed, cash-generating equities; this will help keep self-funded retirees off the aged pension.

Skate

 

[sptrawler]

When inflation does come along
How would people here invest to avoid the erosion
of purchasing power if held in cash?

If inflation comes along, as VC says it is always with us, but fortunately due mainly to technology, some things have come down in real terms.
As inflation kicks in, so do interest rate rises, to keep a cap on the inflation.
10 or so years ago, interest rates on savings, were 10%. During the late 1980's interest rates were 18%, though I doubt we will ever see that again.
But I would expect, once the Financial Crisis fallout runs its course, interest will go back to about 7%, the long term average.

 

[sptrawler]

It was tongue in cheek, hence the smiley face afterwards.

I have no idea what the future rules will be with regard to the age pension. At a guess I would say the country couldn't afford it as it is now at some point in the future, as you say it will be reviewed and further means tested or the qualifying age most likely pushed out further, or they will need to raise more taxes and will probably go after the tax free Super pensions after age 60 for self funded retirees.

I can almost hear Shorten now, these self funded retirees with all this money in Superannuation are receiving a tax free income for the rest of their lives, this could be another 10-40 years of not paying income tax. This loop hole being rorted by the rich (Shortens term for anyone with assets of more than a $100k) needs to be stopped now. That will be Shortens next tax grab. I really hope he doesn't get into power.

The really scary thing is, Shorten will get a tax payer funded pension, that is indexed for the rest of his life.

Then he has the audacity to say, people who have saved to pay for their old age, without claiming an age pension need to be stripped of their savings.

Absolute FW, every working person who hopes to be an independent retiree, should tell him where to go.
He has absolutely no humility, just an outrageous, smug, deceitful person IMO.
Last election, it was tax superannuation incomes over $100k, now the pot has shrunk due to the new caps, it is take 30% of their earnings.
Nasty piece of work, who shows he doesn't give a rats ar$e, about workers who do it tough to get ahead.
Maybe he should say, I will lead by example, all Labor politicians past and present will get a pension linked to their final average salary as a lump sum.
No pensions indexed for life, then when they vote for that, I'll vote for him.
Untill then he is just another one in the trough, trying to tell everyone he is honest, with his mouth full.
Just my opinion.
Actually I thought Chris Bowen, may have been a glowing light for Labor, but seeing him in every picture being glared at by Shorten, indicates he has been brought to heal as I see it.
Shame really, in the past he did show some promise, as a moderate thinker.

 

[PZ99]

Oohh look... a contrary view.

A self funded retiree earning $1900 a week can't spare $72 a week to sponsor Australia's future?

Tax free super is a structural deficit burdened on future generations bequeathed by the Howard govt in a burning desire to stay in office for just one more term.

Spare me the entitlement eulogy, fabians

 

[SirRumpole]

Then he has the audacity to say, people who have saved to pay for their old age, without claiming an age pension need to be stripped of their savings.

Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?

A free income for doing nothing is not what built Australia.

 

[tech/a]

Why should someone getting $100k super pay no tax on it when a tradie getting the same pays $24,000 ?

A free income for doing nothing is not what built Australia.

Because they won’t be a burden on the tax payer claiming a pension.
The tradie can also take advantage of the same situation as I did back
In the day —— tradie with Property ——- .I and my company pay Tax plenty of tax.
Personal tax
Company tax
Payroll tax
Fringe benefits tax
GST
PAYE tax
Plus a number of Duties
Just paid $12000 Stamp duty on a truck
Which my staff use as a tool of trade.

Bugger all help for business
The guys who employ everyone. We aren’t the enemy we are the guys who put EVERYTHING on the line
We stuff it up and we go Broke. Everyone we employ get another job!
Who’s got most at risk?
Oh all my staff are $ 3-8 per hr above the award because I want to keep the best
8 of 26 employees have been with me for 6+years
And I’m pretty dumb only passed year 10 after repeating it!

End of rant.

 

[SirRumpole]

Because they won’t be a burden on the tax payer claiming a pension.

OK so they can get a tax free threshold equivalent to the pension.

 

[PZ99]

Because they won’t be a burden on the tax payer claiming a pension.
The tradie can also take advantage of the same situation as I did back
In the day —— tradie with Property ——- .I and my company pay Tax plenty of tax.
Personal tax
Company tax
Payroll tax
Fringe benefits tax
GST
PAYE tax
Plus a number of Duties
Just paid $12000 Stamp duty on a truck
Which my staff use as a tool of trade.

Bugger all help for business
The guys who employ everyone. We aren’t the enemy we are the guys who put EVERYTHING on the line
We stuff it up and we go Broke. Everyone we employ get another job!
Who’s got most at risk?
Oh all my staff are $ 3-8 per hr above the award because I want to keep the best
8 of 26 employees have been with me for 6+years
And I’m pretty dumb only passed year 10 after repeating it!

End of rant.

Sounds to me like you are supporting the notion that Australia is not a free ride.

Exactly what I've been saying.

How about a retiree on $100k p/a pays $4K a year tax to help eliminate your payroll tax ?

Gotta be good for business, yeah ?

 

[tech/a]

OK so they can get a tax free threshold equivalent to the pension.

So am I going to last 70 yrs or 95 yrs are my savings going to be eroded by inflation at 1% or at times
4%.
So I'm not able to take all this risk look for a better lifestyle.
According to you and others like you I should just be no more comfortable than any PAYE.
Your entirely happy with the two major parties gouging all of us of $1,000,000s and mis appropriating funds with hair brained stupidity like the NBN which would have gone broke 10x in private enterprise or the Pink Bat rubbish.

Give me a break people get off your ARSE and take a risk
DO SOMETHING to better your life.
Don't wait for some hand out and dont complain when others who do ---take advantage of whats available.

Stir me up ---Love it!

 

[tech/a]

How about a retiree on $100k p/a pays $4K a year tax to help eliminate your payroll tax ?

Gotta be good for business, yeah ?

How about pay roll tax is eliminated and I use it to pay my staff better wages
or employ more people
or purchase more equipment
How about I'm NOT PENALIZED for employing MORE staff!

How about you drop Fuel tax on my Trucks,Excavators and company utes
So I can pay my staff better wages
or employ more people
or purchase more equipment.
How about I'm NOT PENALIZED for building this Country --Literally!

 

[SirRumpole]

The NBN has nothing to do with superannuation.

I'm a self funded retiree myself, but I see no difference from earning $X from a superannuation account vs earning the same from personal exertion from a taxation point of view.

If more people who can afford it pay tax , the rates for everyone can be reduced.

 

[SirRumpole]

How about I'm NOT PENALIZED for building this Country --Literally!

How about I'm not penalised for buying the goods and services that people like you produce ?

 

[PZ99]

How about pay roll tax is eliminated and I use it to pay my staff better wages
or employ more people
or purchase more equipment
How about I'm NOT PENALIZED for employing MORE staff!

How about you drop Fuel tax on my Trucks,Excavators and company utes
So I can pay my staff better wages
or employ more people
or purchase more equipment.
How about I'm NOT PENALIZED for building this Country --Literally!

Great ideas - all of them.

Of course, your $100k p/a super retiree would have to be taxed @ $40k a year instead of $4k

At the moment... they pay ZERO

 

[tech/a]

The NBN has nothing to do with superannuation.

I'm a self funded retiree myself, but I see no difference from earning $X from a superannuation account vs earning the same from personal exertion from a taxation point of view.

If more people who can afford it pay tax , the rates for everyone can be reduced.

It has everything to do with Govt mis using the funds I GIVE them.

How about I'm not penalised for buying the goods and services that people like you produce ?

How so.

Great ideas - all of them.

Of course, your $100k p/a super retiree would have to be taxed @ $40k a year instead of $4k

At the moment... they pay ZERO

Why?

 

[PZ99]

You mean why do they pay zero ?

Or why should they pay tax?

Either way, the money has to come from somewhere.

BTW, the NBN is off budget. It isn't payed for by taxpayers.

 

[SirRumpole]

https://www.aussiestockforums.com/goto/post?id=985864#post-985864

How about I'm not penalised for buying the goods and services that people like you produce ?
How so.

I pay gst on everything I buy, if that was eliminated I would probably buy more which increases the profits of businesses.

 

[tech/a]

You mean why do they pay zero ?

Or why should they pay tax?

Either way, the money has to come from somewhere.

BTW, the NBN is off budget. It isn't payed for by taxpayers.

Why 40% tax
Money comes from more people employed, higher wages.

Where do the Funds come from then?

I pay gst on everything I buy, if that was eliminated I would probably buy more which increases the profits of businesses.

Other than food.
Imagine a royal Commission into the Government parties of Australia.
Would make the Bank Royal Commission look like Prep school.

The waste is Phenomenal.

 

[PZ99]

Why 40% tax
Money comes from more people employed, higher wages.

Because there aren't enough taxpayers to fund the welfare state Australia has put itself into.

Because more people employed doesn't translate to higher wages anymore and even if it did, with 5.5% unemployment, there are only a finite number of jobs.

Where do the Funds come from? They come from more tax revenue and less cash handouts.

Then they come from more budget surpluses and less deficits.

That's what's happening in NSW. They are running ridiculous surpluses and spending it on employment with infrastructure. Which is what they should be doing. Not splashing it on deadwood.

If you've built up a business to the point of enjoying a comfortable retirement then that's great. It's something for others to inspire to. But it's not a ticket for a free ride on the back of taxpayers in a country running up debt and deficits and mortgaging our future.

 

[Junior]

Imagine a royal Commission into the Government parties of Australia.
Would make the Bank Royal Commission look like Prep school.

The waste is Phenomenal.

Agreed. The stories from RC are like watching A Current Affair. Might make a few people feel better but it won't change much.

RC into the Healthcare industry would be far more revealing IMO.

 

[tech/a]

Where do the Funds come from? They come from more tax revenue and less cash handouts.

Sorry I meant where are the funds for the NBN coming from.

Because there aren't enough taxpayers to fund the welfare state Australia has put itself into.

Waste.
If the Govt were serious about eliminating a great deal of the pension debt they would make payments to the pension better and easier with less tax burden for everyone. Rather than 3% being self funded get that to 50%.

Stop handing our welfare to people who wont work for it.
Put them into the armed forces
or
Building infrastructure.
There are 1000s of ways.
or business pays 70% and Govt pay 30%
for an extended period.
Better 30% drain than 100%
and they get the tax.
How competitive would manufacturing be then!
How much un employment would you have?