I was just simplying analysing the return. In terms of volatility, I imagine HostPlus will be a lot more stable but in terms of the amount of revenue generated, if hypothetically the return is the same for the next 30 years then it seems I'll make more money from my index fund. Unless I'm missing something here?
My strategy/plan going forward
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I'll take a look at that articleExtending performance tests to retirement super is a bad idea
Extending performance tests to retirement super is a bad idea
Most superannuation products offered to working-age Australians are now performance-tested, and there are calls to extend these tests to account-based pensions. It's likely to result in more pain than gain, though.www.firstlinks.com.au
I'm assuming that the index fund will continue to outperform my super, I will still do salary sacrificing, but I'm not going to put all my money into super regardless of the tax advantages when the overall return will be higher investing outside of super (this is a hypothetical of course assuming the same rate of return) Let me know if I'm missing anything though. Didn't make sense to me to save money on tax when I can make more money elsewhere, sort of reminds me of the obsession with negative gearing on properties.
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some of them ( the fine print documents ) take me a week to read and think about , the differences might sound like cents but that is cents compounded by every div. payout over 10 or 20 years ( and subject to change from time to time ... so far those changes have been a good thing in most ETFs but NOT always )
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fee-wise almost certainly (but not guaranteed )
some ETFs will be unsuccessful , normally they are small niche-focused ones , but then some super funds are absorbed by bigger players as well ( with those accompanying complications
now one thing i did learn ( very late in my investment adventure ) is the benefit of a full health-check for you ( and your partner ) so you can see any health-related issues coming and plan to reduce the impact of them , the risk might look trivial now , but even knowing which pile of savings to dig into first , or an early application for benefits can keep your savings plan smoother .
also with your formal super fund , research carefully what you are insured for inside that fund , early applications to claim can make life smoother as well ( and find yourself a GREAT lawyer in advance , put him/her on speed-dial ) ( some deliberately try to stall and delay so time to litigate runs out .. i have seen that happen to two friends )
ALSO keep AT least two copies of all claim documents in at least two different 'safe places' insurance companies seem to have a habit of 'losing your documents ' sometimes by frequently changing case managers .
Thanks will take a look at it.
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Not necessarily. As I mentioned before compare apples with apples. Majority of super funds will allow you to specify which fund type your money is invested in. Look at high growth or international shares returns in your super fund and compare that to your etf return.
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You're missing something big.
In general, you can make identical or very similar investments inside of super to those you can make outside of super. This could be through a SMSF, although these have added compliance costs that mean they are not recommended for small balances.
The other way (and the way I have chosen) is through an industry fund that allows direct investment in shares and ETFs of your choice. Each super fund is different, but many funds will let you invest 50% or more of your super in shares you choose from the ASX200 or ASX300 or LICs or ETFs. As well as getting the super tax breaks, all the hassle of including your investment income in tax returns, CGT record keeping and compliance are done for you.
rolly1 is totally on the money. Your investments inside super can perform just as well as those outside, but will then have the bonus of the generous tax breaks that investments in super get.
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Some light reading.
idadvice.com.au
The Tax Problem with Industry Super Funds - ID Advice
The superannuation of most Australians sits within an industry fund. There are numerous benefits to this; low fees, generally great returns and access to multiple investment options. However, they have a problem. It’s a problem that is relatively unknown but could have a large impact on the...
idadvice.com.au
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Off topic a bit but have you ever used the mob that wrote that article? ThxSome light reading.
The Tax Problem with Industry Super Funds - ID Advice
The superannuation of most Australians sits within an industry fund. There are numerous benefits to this; low fees, generally great returns and access to multiple investment options. However, they have a problem. It’s a problem that is relatively unknown but could have a large impact on the...
No. I use a financial firm which also provides accountancy services.
Can I just say, as superannuation is personal, while it's good to read various information, never take it at face value. Always check with the particular superannuation fund or adviser if you have one. For example, some funds may not be able to accept an in specie transfer in total. If a person is the accumulation phase and has, say, $2.2m, the fund may only allow the Balance Cap amount to be transferred to commence an account-based pension. I think it is best to contact the fund, ask the questions to which you need answers and get it in writing.
Forums are just a waffle house and do not represent any superannuation fund. So no matter who on a forum posts info, it is basically of no value as it may not be what the fund will allow. Each has its own Trust Deed and policies and that determines what it will or will not do.
Yeah that's a good point actually, I was just comparing it to my regular super balanced fund because the high growth one hasn't been tested so bit more risky as there isn't much historical data.
If I can get just as good performance then yeah it makes more sense to invest inside super but it's a gamble I guess whichever way I look at it in terms of the return in 30+ years time. But if my super lets me invest in shares or etfs then I'm 100% going to invest inside super I just thought it wasn't an option based on my research but I haven't called up hostplus to check.
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I repeat something i wrote before, and has been basically written in a way by most:
There is no: should i get into a super fund or outside super in an ETF issue
If you prefer etf to a super fund option, invest in an ETF WITHIN your super..you should be able to fo this with all the basic ETFs you mentioned.
That gives you the super tax advantages.
The only REAL question is : how much in super vs outside super saving
This is a very personal question with no universal answer
Do you want to have savings to allow for early retirement, for a private surgery if you need it, a new car or new RE investment, bridging loan.
Or even a trip around the world if you learn you have a terminal disease at 50
And what if you want to move overseas.
The government entices you toward super via lower taxes , but then control it.
How, how much and when you can access it...with rules changing at EVERY government change for the last 30y or so
I started my smsf this year at 58 and not before for that reason as i can stand the risk for 2 years
But for the 90% who want to work till they drop, paying a mortgage and basking on the super balance they will leave to their kids..minus the death duty by then
Super is the way
There is no super fund return vs ETF, that is not an issue, you go the way you want ETF within super if you want.
But there is a critical decision whose right answer will vary hugely based on your circonstances and future roadmap.
Only one thing to remember, once your money is in super, it is a one way only until the government decides otherwise.
Hope it helps
There is no: should i get into a super fund or outside super in an ETF issue
If you prefer etf to a super fund option, invest in an ETF WITHIN your super..you should be able to fo this with all the basic ETFs you mentioned.
That gives you the super tax advantages.
The only REAL question is : how much in super vs outside super saving
This is a very personal question with no universal answer
Do you want to have savings to allow for early retirement, for a private surgery if you need it, a new car or new RE investment, bridging loan.
Or even a trip around the world if you learn you have a terminal disease at 50
And what if you want to move overseas.
The government entices you toward super via lower taxes , but then control it.
How, how much and when you can access it...with rules changing at EVERY government change for the last 30y or so
I started my smsf this year at 58 and not before for that reason as i can stand the risk for 2 years
But for the 90% who want to work till they drop, paying a mortgage and basking on the super balance they will leave to their kids..minus the death duty by then
Super is the way
There is no super fund return vs ETF, that is not an issue, you go the way you want ETF within super if you want.
But there is a critical decision whose right answer will vary hugely based on your circonstances and future roadmap.
Only one thing to remember, once your money is in super, it is a one way only until the government decides otherwise.
Hope it helps
Great points there, I'm glad you and any others in this thread mentioned this and similar points, important to consider. I'm gonna call up my super company next week and see what options I have.
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All the best, between all the posts, i think you got all the data to stat forming your answer.this is the true spirit of this forum.
Learning, facts/data and exchange of opinions.
Thanks as always! Everyone's help is always appreciated.All the best, between all the posts, i think you got all the data to stat forming your answer.this is the true spirit of this forum.
Learning, facts/data and exchange of opinions.
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yes fully informed decisions should be the optimal outcome
highlighting the traps ( and inconveniences ) members have encountered on the way
the wealth management industry made some classic errors in trying to simplify the information and documentation they provided , but then the retail customer failed to grasp the concept of educating themselves in this area first , this can get very complex while the outcomes are very individual
one solution does NOT fit all in this area
