SUPER ---- Is it THE answer??

Re: SUPER ---- Is it THE answer ??

I don't think it makes sense to generalise on super. Whilst I can't see many advantages in a 20 year old committing to tie up most spare funds in super which then can't be accessed until 55, it is quite a different matter to have a self managed super fund with its favourable tax environment for, say, ten or so years prior to retirement.

I like not being dependent on any fund manager and knowing exactly where my money is and what growth and income it is generating.

Agree with BSD's comments.

Julia

Re: SUPER ---- Is it THE answer ??

BSD said:

Oh - and I would be very careful thinking that living in an 'investment' property for twelve months before sale makes it CGT free.

The ATO may prefer you apportion the investment gain between 'taxable' and 'tax free' when you sell.

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Yes BSD, that is exactly what they will do!

I didnt want to know about Super when I was in my thirties as we had a mortgage, 2 young children to educate and well, we needed the money now not when we were 60! Goodness, that was a lifetime away. Eventually our accountant dragged us kicking and screaming into a SMSF, where we were able to put in excess profits from our business so our tax position was better (why should the tax office get it :swear: )

We let it drift for a while, not convinced as we were having to pay the surcharge, tax on this, tax on that etc etc! I wasnt active in trading shares at the time, so was paying huge commissions to a large stockbroking firm for what I now know to be garbage decisions.

Then came online trading. I was hooked Suddenly we had access to information, which is power. Kicked the stockbrokers off the team and have never looked back!

Super is never THE answer, but it is part of an investment strategy. And now as we head towards 50 well, the end is in sight. I do love the new rules which allow us to contribute as well as draw down once we hit 55! I dont think my DH will ever stop working at least on a casual basis (he writes books, which he will do until he cant see anymore ), which is just as well coz I think I would go crazy if he stayed at home with me And I would banish him from the supermarket, I always feel so sorry for both husband and wife (or whatever combination suits you!) going shopping together!

Re: SUPER ---- Is it THE answer ??

BSD said:

Super is not an asset class, it is a tax haven.

The whole addiction to leverage in this country is a recipe for disastor at
Is super THE answer? No

The argument around the government 'changing the rules' is a little weak too. For the last decade the changes have made super increasingly lucrative.

The horrible life insurance salesman of the last two decade have a lot to answer for - but the wealthy Australian have grown to love super.

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I agree BSD.

Super is still caught in the stigma of nasty rule changes in the late 80's early 90's. Over the past 5 years most of the legislative changes have been for the better.

The Government have tried to assist small business with superannuation through capital gain rollover relief strategies for those selling active/business assets. In fact the Government like to boast that a person can start out in business at aged 18 and build up and sell and continue to buy and sell businesses to retirement age - put money into superannuation and not pay a cent in capital gains tax (subject to upper assets test limits).

While they haven't exactly set the world on fire with serious tax reform the Government have made some taxpayer friendly legislative changes. Obviously passive investor of shares and rental property's would like more tax exemptions. Personally I think the 50% tax free 12 month exemption is enough. There should be some additional perks for the entrepreneurs that are actually the life blood of the economy.

Duckman

tech/a said:

Tax is my cost of the freedom to create a standard of living MY WAY.

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Everyone has different financial goals and income to meet them. The 15% tax environment (50% of capital gains if held for > 12 months) is the key incentive as designed. My compulsory super fund has increased to date 212% (two hundred and twelve %) in 4 years and 4 months. Really is incredible the growth potential with smart investment options, consistent contributions and don't chop and change.

Wysiwyg said:

Everyone has different financial goals and income to meet them. The 15% tax environment (50% of capital gains if held for > 12 months) is the key incentive as designed. My compulsory super fund has increased to date 212% (two hundred and twelve %) in 4 years and 4 months. Really is incredible the growth potential with smart investment options, consistent contributions and don't chop and change.

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So can you imagine how wealthy this country would be with a flat 15% tax rate, and no exemption/special regime...

qldfrog said:

So can you imagine how wealthy this country would be with a flat 15% tax rate, and no exemption/special regime...

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The way the world works though is the cost of everything would rise to what people are willing to pay and can afford. Businesses charge higher and higher to the point where people stop buying and start complaining. That is the ceiling, then place some 'discounts' and 'specials' to get the customers back in. Harvey Norman classic.

Julia said:

Re: SUPER ---- Is it THE answer ??

I don't think it makes sense to generalise on super.

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Everybody's situation is different. My case and Tech's are very different so it really does depend on the circumstances. My businesses were not easy to put under management as our plans were to move away and do a lot of travelling. We were fortunate that we retired in 2006 and could make arrangements under the 15 year rule and the more than generous super concessions over the next couple of years.

We were able to liquidate all the assets of the companies at the right time because of the considerable concessions in contributing very large amounts into super during 2007 and 2008 which made the super option the best investment for us.

We have been travelling extensively full time taking a more than adequate pension from the super funds and the balances are consistently increasing, currently the highest they have been. The sharetrading is now a hobby and the cream on top.

I do worry about the current and next generation while the increasingly bad government economic decisions will make their future more difficult.

The Senate has rejected the Treasurer's attempt to crack down on 'proxy advisors' in the superannuation industry.

It means little to me, maybe others can comment on the effects on the ordinary investor.

SirRumpole said:

The Senate has rejected the Treasurer's attempt to crack down on 'proxy advisors' in the superannuation industry.

It means little to me, maybe others can comment on the effects on the ordinary investor.

Why the Senate vetoed Josh Frydenberg's super sting

As the ruckus over the religious discrimination bill dominated the headlines last week, another decision in the Senate — to reject draconian new regulations over superannuation — is likely to have far wider implications for the majority of Australians.

www.abc.net.au

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I am glad the senate rejected it.

I can see both sides though, I can understand why the directors and execs want to make it harder for nuisance class actions, but it’s important for the owners of the company to be able to hold them accountable.

With more and more investment going towards passive index funds, it’s important for the super funds and operators of the index funds to be able to vote their shares in the best interest of their investors, and that will require independent advice from investors groups, which I am happy for them to use.