Australian (ASX) Stock Market Forum

Maintain the current dividend imputation system

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Smurf1976 said:
There's an awful lot of people out there who involuntarily retired in their 50's before they could access super or the pension. Plenty of blue collar workers end up in that situation but it affects white collar too to some extent. The smart ones thought they were doing the sensible thing by investing additional funds outside super to cover themselves if that day comes.
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Yes , that seems to be an issue.

I wonder if anyone has pointed this out to the ALP, it would be interesting to get their response.
 
Smurf1976 said:
Super isn't the biggest issue since there seem to be workarounds to that one via industry funds and super is, of course, a tax favoured environment as a concept in the first place.

It's investments outside of super which are more of a concern. Anyone who plans to retire prior to the age arbitrarily set by government or who simply saved and invested for the proverbial rainy day seems to be a target the moment their incomes drops - and protecting themselves in that scenario is the very reason they invested in the first place.

There's an awful lot of people out there who involuntarily retired in their 50's before they could access super or the pension. Plenty of blue collar workers end up in that situation but it affects white collar too to some extent. The smart ones thought they were doing the sensible thing by investing additional funds outside super to cover themselves if that day comes.

Given that the stereotypical person in that situation would be a tradie or manual worker, I'd have thought Labor would be on their side. Seems not.
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I think that is a possibly valid point Smurf. Of all the scenarios being thrown around the issue of people who have relatively modest investments and find themselves out of work in their 50'/60/s and trying to rely on such dividends seems most plausible.

I think in the bigger picture the question is the issue of unemployment benefits that are real and accessible. I think it is pretty terrifying that a 55 year old factory/white collar worker who is retrenched and unlikely to get a job has to practically be on the bread line to be eligible for benefits. In effect they have to use all their savings and investments before being able to get income support. (there goes their shares)

But lets take your case. As I see it this person needs to have at least $400k of shares earning 5% yields to have any chance of surviving. That's $20k divs plus say $6k franking credits. Honestly which person would have that type of portfolio outside his/her super fund ? I could see $50/100/150k but this figure seems unusual.

I suggest this is a different problem which is not helped by continuing a rort that takes $5b a year from tax payers and gives it overwhelmingly to the very well off.
 
SirRumpole said:
Not many government pensioners can afford to take overseas holidays.
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Don't kid yourself Rumpy, there are plenty of pension couples on cruises, $35kP/A plus $300k in savings, I've been on cruises and there are plenty of pensioners on there.:xyxthumbs
$900k saved up, gives $27k in interest, don't tell me $35k + perks, for FA isn't good.
 
Just read this pretty much sums it up
encourages “lazy investing” in “dinosaur” companies whose only virtue is that they pay fat, full-franked dividends.
 
Humid said:
Just read this pretty much sums it up
encourages “lazy investing” in “dinosaur” companies whose only virtue is that they pay fat, full-franked dividends.
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You should be reading up on RBL's and maximum, minimum drawdowns, pre the current account based pensions.
It will help you think about your future.;)
 
Humid said:
Anyway your mob have to lose an election yet
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I really think that is a foregone conclusion, it is just scary the changes labor are promising, on the back of an electoral mandate.
I really just hope, people think carefully on what they are proposing and the ramifications.
If they do that and Labor are voted in so be it, my motto, "allow for the worst, hope for the best", will see me through o.k. lol:xyxthumbs
 
basilio said:
I think that is a possibly valid point Smurf. Of all the scenarios being thrown around the issue of people who have relatively modest investments and find themselves out of work in their 50'/60/s and trying to rely on such dividends seems most plausible.
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I've made a more detailed post in the other thread on this subject but ultimately that's my main concern yes.

Ordinary people who put some money aside for the proverbial rainy day ending up paying a 30% tax rate when they suffer the misfortune of forced early retirement.

I've seen rather a lot of people end up involuntarily retired prior to pension / superannuation age so it's the first and foremost point in my mind when it comes to investing. It could happen to anyone.....

I don't particularly mind how it's fixed but I do think it would be morally wrong and against whatever the underlying intent of Labor's policy is to not address this aspect of it.

From a voting perspective, well I'm no fan of the Liberals but likewise I see this policy of Labor's as morally very wrong.
 
If this policy was introduced by the Howard government I can assure you it wasn’t aimed at the people your concerned about.
What did people do prior to this?
It’s not like it’s been around forever.
Maybe invest in insurance.......not from the banks!
 
as a taxpayer .......

i am happy to pay income tax on the income that goes into my pocket (tax on gross income minus deductions), but the the new policy means that some will pay income tax on income that NEVER gets into their pocket.

how can it be fair that income tax is paid on money that is NEVER paid to a person?
 
HelloU said:
but the the new policy means that some will pay income tax on income that NEVER gets into their pocket.
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All people over 60 are paying absolutely no tax on superannuation income that could be $100k or more.

Try explaining that to people working for a living that they are subsidising people not contributing to the services that others have to pay for.
 
well lets take newstart allowance and public housing off people too then, 150Billion given to them

what are they contributing? anything at any stage of their life
 
HelloU said:
as a taxpayer .......

i am happy to pay income tax on the income that goes into my pocket (tax on gross income minus deductions), but the the new policy means that some will pay income tax on income that NEVER gets into their pocket.

how can it be fair that income tax is paid on money that is NEVER paid to a person?
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As a taxpayer couldn’t you use the credits?
 
Smurf1976 said:
I've made a more detailed post in the other thread on this subject but ultimately that's my main concern yes.

Ordinary people who put some money aside for the proverbial rainy day ending up paying a 30% tax rate when they suffer the misfortune of forced early retirement.

I've seen rather a lot of people end up involuntarily retired prior to pension / superannuation age so it's the first and foremost point in my mind when it comes to investing. It could happen to anyone.....

I don't particularly mind how it's fixed but I do think it would be morally wrong and against whatever the underlying intent of Labor's policy is to not address this aspect of it.

From a voting perspective, well I'm no fan of the Liberals but likewise I see this policy of Labor's as morally very wrong.
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That certainly happened to me, when Kwinana shut down, seven years later I still have 3 1/2 years to pension age.
 

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