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Superannuation - a good thing?

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A good follow-up Judd and something I did not make clear. For a measly ~$500 anyone can setup one and even if you have no assets, but sensibly have large insurance policies for your family protection, how can you not afford not to have one if you have dependents?

It is all about your financial intelligence and it does not take too much effort to gain that over time.
 
I was where you are now 25 years ago. What I did was invested outside of super, there is nothing preventing you from not putting in. At the time I did put in my 9% on top of the SG level as it wasn't all that much and I thought a bit of extra super for the future is better than none. So the 9% aside everything else went into my own investments outside of super. I retired many years prior to my preservation age, you can do this too just don't put in.

Fast forward to preservation age and now I am moving assets into super in order to set up a long term allocated pension with tax benefits.

Can we agree that at least the Superannuation Guarantee should remain. It's better for those that don't, can't and never will save that something remains, these are the very people it was introduced for, cheers.
 
Garpal Gumnut said:
Although still many decades away from it, can the nursing home get their hands on your super like they can make you sell your home? when its time to join the club.

gg
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This is probably a whole separate subject.

I'd suggest our aged care should be regarded in the same light as our provision for our active retirement years, and therefore that the level of care one can access is dependent on what we're prepared to pay.

In other words, more of a user pays system than applies at present.

What we have now is a vastly underfunded age care sector and as a result poor care with too few staff and resources.

If it were to come down to the choice between accepting the currently available level of care, i.e. potentially lying injured without help, sitting in your own excrement, and starving because no one can help to feed you, wouldn't you pretty happily apply the proceeds of some of the sale of your home to ensure you don't endure such misery?


Aged care is like mental health. The consumers are not in a position to make much noise so it's convenient for governments to ignore the woeful level of care.

We are all going to get old, some of us will be physically feeble and helpless, and others will be demented. Surely we should be prepared to expend some of what we have accumulated over so many years to ensure our final years are spent with as much dignity and comfort as possible.
 
Garpal Gumnut said:
Although still many decades away from it, can the nursing home get their hands on your super like they can make you sell your home? when its time to join the club.

gg
Click to expand...

The short answer is yes and every other asset you may have.

Presently the Accommodation bond applies to low care. This would mean your SMSF superannuation pension income would cease and you would have to make do with the aged pension and the earnings on about $35,000. On your death the bond would be paid to your estate. There is a proposal to also apply the Accommodation bond to high-care.

An aged care bond is an interest free loan to the accommodation provider. The provider can invest it and is supposedly required to use the interest to improve the buildings or provision of care. There is apparently no upper limit on the amount of the bond - I have seen demands of over $2M in bond money.

The accommodation provider can lawfully dip into the bond to the tune of a maximum $280 per month for 5 years.

As far as I can find out there is no integrity checking that the accommodation provider actually uses the interest for building improvements or care and not to fund their daughter's university education. Nor does there to be any real checks preventing the provider actually dipping into the bond itself beyond the legal amount. Have seen cases where over $10m of bond money in one aged-care facility has gone. Not the first and it will not be the last.

Also, what is not spelt out in a lot of documentation is that you can pay the bond by installments (have a close read of the legislation and related material.) Of course, you do not spring this one until after you agree to the amount of the bond because, parasites being parasites, the offer of accommodation may be withdrawn.
 
Hey all, just a question I had after looking at some super documents...I noticed that the average return for the investment option of "safe" was like 2 or 3%...how can this be? Why can't the fund just put our money into an account like ING or Ubank and earn the normal 5%???
 
Mostly likely because they are taking their cut from the interest.
 
Tyler Durden said:
Oh I didn't think about that
But why should I pay for them to put my money in the bank~~~
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Both my wife and I have Industry Super funds. Both are earning about 4.7% on the cash fund for the last 12 Months. In my own account out of Super I am getting 6.51% for my cash. It is poor really that they can't do a bit better, however the funds figures are after tax and management fees. You can choose your fund, safe means mostly cash or bonds, bonds have been going backwards in the last few Months. You might need to check out exactly which fund you are in and you might need to change, you could go 100% shares and watch it drop 50% like it did in 2009.
 
That's a realistic summary of what's available and the best possible recommendation for building up enough capital to have your own SMSF.

A friend of mine about midway through the GFC switched to the most conservative option in her fund, cash, and unbelievably didn't even ask what interest rate it would be earning. When she told me she had done this I suggested she find out. It was earning 2%!!!!

This is an otherwise sensible, well educated person.
******* unbelievable that people can be so careless and unconcerned, especially when they have nowhere near enough in Super to fund their retirement.

Has anyone figured out the mentality happening here?
Is it that their Super balance is so low that they realise they will have little other than the government pension to rely on in retirement anyway, so there seems not much point in trying to maximise investment options?
 

Perhaps Occam's Razor can explain it (the simplest answers are the most likely). Financially lazy and denial.

Easier to trust/blame someone else with/about your future wealth status so you don't have to take responsibility, live within nasty things like budgets and learn how to invest.

Remain in denial that eventually you get older and wait until a week before you retire to ask an advisor if the maximum Govt. pension at $364.65 for singles and $549.70 per week for a couple can afford you the required jet-setting lifestyle at 65, thereby conclusively confirming it was your Super fund manager and the Fed Govt.'s fault.
 
Sounds about right to me, Reasons.

The bit that puzzles me, though, is that this person is in all other ways diligent, thoughtful, hard working, and very savvy about most things.
It's as though a screen comes down over her brain when money and how to acquire and keep it is the issue.
 
Tyler Durden said:
Oh I didn't think about that
But why should I pay for them to put my money in the bank~~~
Click to expand...
Like I say, super is a bad thing. Its not really your money, its a future promise to receive some money.

At the very least people should refuse to do extra super contributions. 0% contribution will be fine thanks.
 
tothemax6 said:
Like I say, super is a bad thing. Its not really your money, its a future promise to receive some money.
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I think you are just bored, but in case you somehow actually believe what you wrote, take an interest, accumulate some dollars, get an SMSF and then you will most surely have control (and take responsibility) for every cent through your own bank accounts, shares, real property, etc. Hell, you can even take it all out of your fund and roll around in it if you want; probably just before you get fined and lose it all to the tax man. It's definitely not a future promise and doesn't get more real than that.
 
You don't need a SMSF to take more control of your super. Like many of you my super was going no where fast in an industry super fund. I had a review done and rolled my super out and on to a platform that allows me to trade direct shares. It also gives me access to managed funds & term deposits.
 
Mavis said:
I had a review done and rolled my super out and on to a platform that allows me to trade direct shares. It also gives me access to managed funds & term deposits.
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Who did the review and who offers this platform? What is the catch? You got to pay for this type of access somewhere somehow.
 

Hi Bill

I can empathise with the high majority that think it is a waste of time, etc. It took my ol' man from my mid/late teens to mid 20's to totally knock the benefits of Super and other finance stuff into my head. Knowing what it took to get my head around it, I am patiently doing the same with my own kids. They are getting the idea and in the case of Super using the $1K co-contribution every year (all still at uni and working part time).

I actually hadn't done the calcs on the Super Guarantee for them, so when I did it for some response on a thread here somewhere, it is brilliant for Gen Y's at 60 and a lot lower effort compared to the BB's . As per what you would have seen over your life time, 90% will generally ignore Super and so miss the potential dollar targets accordingly by not contributing enough (and then it will be someone else's fault). The way I look at it is that I got taught some good tricks early and have taught myself a lot more over time and met my targets. If I can impart that to my own kids early in life and have them financially smarter than me at a much earlier age with short, medium and long-term goals, hopefully they will do well themselves and teach their own kids better again. You can but try, but it seems to be going OK so far.

You are close to self-funded retirement by the sounds of it so also now know that Gen Y's are going to get to 60 in the blink of an eye and even the very few that achieve ~$1.5m (today's money) in their Super will be kicking themselves that they did not put in that bit extra to increase it much higher. All things being equal, they are going to live a lot longer than the BB's and 60 might be middle aged. As you indicated, too much is not enough in Super at 60.

I always associate Super with life insurance; you are betting on dying and they are betting that you don't ('cause they have the stats to back themselves). Based on their stats, my chances to live and collect on Super were acceptable and some delayed gratification by salary sacrificing into Super was warranted. Like you, my health is really good, so now get to go travel OS, etc, and will keep doing so whilst healthy - lots more of the world to see yet. If I had lost the bet, it wasn't bad fun anyway. But there is no doubt about it, delayed gratification takes some effort and self-discipline, as you would well understand. I wish you well with your targets and hope you exceed them early.

Cheers
 
Bill M said:
Who did the review and who offers this platform? What is the catch? You got to pay for this type of access somewhere somehow.
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JB Global. Of course there is a cost, control doesn't come for free. The fee is 0.98% p.a. which wasn't much more than my industry fund and alot less than the establishment and ongoing costs of a SMSF.
 
Thanks for your quick response Mavis, I will look into that, sounds ok.
 
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