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.
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.
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.
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?