Trembling Hand said:Thats the biggest mistake with super. Why grow something and make it your second or even first biggest investment with something so friggin restricted?
A cent hasn't gone into my super for 5 years now, from anywhere. And I cannot see that changing.
An additional risk is the requirement that much of the Super will be required to be taken as an annuity.
Makes considerable sense but would irritate many of those retiring who may want to pay off loans, travel etc.
It's probably reasonable to remember, TH and McLovin, that compulsory Super wasn't designed for people like you who will have the capacity and sense to provide for their own retirement.
It's for those who don't.
Funny thing is a few months ago a good friend who has just turned 40 told me that he was putting $250 a week into his super because it was their only way to save for retirement!! I slapped him in the head.
Can you imagine giving up $250 a week to not be able to control it for 20 years!!!
I told them they could actually put that into a broking account and buy a managed fund or ETF and then use it for whatever, whenever and however they wanted. They had never thought of it!!!
Agree. For anyone under 50, there's also the possibility that by the time you are able to tap your super the taxes may have significantly changed to the point that the reason you originally put so much in super is no longer relevant. I can definitely see means testing SMSF coming in over the next decade.
With super taxed at 15% while highest marginal tax rate at 49.5%... it's a pretty big incentive even for those under 50. Over 20 years, the same performance say 10% p.a. will yield 511% after tax within super but only 268% under personal name (assuming highest tax rate). Over 30 years, the numbers become 1156% vs 438%.
I often consider this difference to be the "control premium" one must pay. They have to tax super a fair bit more than they currently do to make this equation unattractive.
So I find myself putting a small amount in super as a hedge.
And aside from that, I'm not that interested in living like a pauper until I'm 60 and then a King.
This happens so often. Why??? Ex-husband of a relative has been earning around $200K for many years.. He's not exactly poor and would probably be pulling in $150k/year but he rarely has money left over at the end of the month..
You only pay 9% if you are a wage earner. Simple don't work for someone.
If I didn't work for anyone at all, I would still have to pay myself super to avoid tax thresholds above 32.5%.
I thought you did work for "someone"?
An additional risk is the requirement that much of the Super will be required to be taken as an annuity.
Makes considerable sense but would irritate many of those retiring who may want to pay off loans, travel etc.
It's probably reasonable to remember, TH and McLovin, that compulsory Super wasn't designed for people like you who will have the capacity and sense to provide for their own retirement.
It's for those who don't.
The problem is leaving access to super with few restrictions tends to mean those with the least ability to reduce their burden on the tax payer can fritter it away faster than they should.
I would argue that until your not entitle to any for of Govt pension you shouldn't really be able to tap int your super in a way that increases the pension you get. How we achieve that goal I'm not sure. I just don't think it's fair to allow someone to take a lump sum from their super to pay off private debt, which then allows them access to a pension, or increase the pension they're entitled to.
Maybe a simple way is to only allow a 10% lump sum, and the rest needs to be taken as some form of annuity??
Maybe it would be fairer to restrict access to the % of capital contributed by employers, but not get in the way of retirees accessing lump sums from additional contributions they've made voluntarily. If person X has only a small super balance due to only the compulsory contributions having been made, and person Y has a large super balance as they've put in extra themselves over many years - why should person Y be unable to take a lump sum to repay any remaining private debt, buy a caravan, take a holiday etc if it's essentially their own money they want to get their grubby little hands on!
Huh?
What are you talking about. My income comes from my company dividends. NO Superannuation guarantee on them.
http://calculators.ato.gov.au/SGCalculatorWeb/help/Amount.aspx?ms=Businesses
No my company does work for many.
Brainfart, I had forgotten about dividends.
I hope that is typical for those in your line of work
Can you imagine giving up $250 a week to not be able to control it for 20 years!!!
It is if you own a business and decide not to draw a wage or Director fees. Or if you are a sole trader. You just pay yourself and thats it. No Super.
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