While home ownership makes for potentially better retirement, withdrawing some money from super reduces the super balance long term, will push prices of housing up. Australia needs a property pricing reset. Increasing demand will increase pricing. The various grants only provide short term relief then pricing adjusts to factor in the grants. Using super will be a short term help then property pricing will increase to factor in people using super so because less affordable.
While longer term in the major cities property shows it probably will outperform super, property locks up wealth and less liquid. All it takes is under-insurance and some disaster and wealth is lost.
Pausing super increases previously hasn't led to wage growth accommodating the delayed super increase.
Most people I know that earn less than the national average will would not use any delayed super increases to better their own financial future. Any potential increase in wages would be a part of their regular disposable income spent on various vices or increased subscription services.
I would love to see Keating vs Frydenberg live debate.
That is very true, Australia has doubled its population in the last 50 years mainly by immigration, with that being stalled due to the corona virus there will be a lot of excess capacity in the pipeline IMO.THis is a very silly argument. Since when has anyone cared about property prices increasing ? They will increase anyway with or without super. WHat people are worried about is a dwindling supply of tenants.
Statistics don't account for much, a 65 year old friend who still works changed to cash in March, he lost $5k on a $230k balance, he is now well in positive territory because of contributions since.Last Weekend Afr's "Chanticleer " reports,$2.7Billion of the high performing $90Billion Uni Super was switched(by its supposedly highly educated members) into the cash option at the worst possible time, the bottom of the market in March.Same deal for Australian Super,$65 Billion from the $200 Billion fund switched into cash.Talk about bad timing!Equity markets were to then rebound 35-40% in just the following 3 months.
Since when has anyone cared about property prices increasing ?
isn't your friend not telling you the full story, unless he was already nearly fully in cash during the feb march period, he would have been hit by the full crash, nowhere near as low as a5% loss.....unless the super fund really screwed up and exchanged his units at an non updated price??Statistics don't account for much, a 65 year old friend who still works changed to cash in March, he lost $5k on a $230k balance, he is now well in positive territory because of contributions since.
Would he have been better leaving the money in the market? Risk and reward is just that IMO.
Equity markets have rebounded, but aren't back to what they were, so it is all subjective IMO.
here in the sunshine coast, with people moving in from Brisbane and the southern states, there is a real tenancy issue: no rental available anywhere and the RE market is booming. Families are living in tents or sheds.I would think a lot of people.
No, they are exact figures, we talked about the virus as soon as it was common knowledge and we on the forum were discussing it I had just read your post of the virus analysis.isn't your friend not telling you the full story, unless he was already nearly fully in cash during the feb march period, he would have been hit by the full crash, nowhere near as low as a5% loss.....unless the super fund really screwed up and exchanged his units at an non updated price??
Ok, i thought jump to cash at the low....No, they are exact figures, we talked about the virus as soon as it was common knowledge and we on the forum were discussing it I had just read your post of the virus analysis.
He has been my best mate for 50 years, all true figures, we talked he jumped to cash, that was the loss.
I doubt very much he would be in the same position, if he had riden it through, but I could be wrong.
Just gave him a quick call and he is up $2k on where he was, he said a mate at the same workplace is still down on where he was, so might not be apples for apples, but a big loss at 65 takes a lot of recovery.
The other thing that comes into the equation is, the snapshot on my SMSF, was taken at 30/6/2020.Ok, i thought jump to cash at the low....
If he jumped to cash before the crash he won imho as he broke even with zero Risk
As an adjunct to super being a cash cow got government, some may be interested in the indexation arrangements applying to the balance cap.
Indexation of Transfer balance cap
How indexation of the general transfer balance cap impacts your personal transfer balance cap.www.ato.gov.au
It will of course depend on the CPI variations applicable.
Note if you have already reached the balance cap and it is increased that does not mean you can add more because of it as your personal balance cap is calculated at a particular point in time. And if you have reached the cap but it's gone down since then, you're out of luck.
For those in pension phase, a proportional aspect will apply but if you're already at the $1.6m tax free, zero will apply.
The whole thing is going to become a dog's breakfast, as you say Belli.The cap will be increased to $1.7m from 1 July 2021 as the December CPI was 117.2.
It's going to be a dog's breakfast in my view with the arrangements for accumulation balances before and after that date as well as income stream where the cap was or is less than $1.6m.
Even a cursory reading of the ATO web-site on the issue will indicate that.
Just remember universal income is in the Reset program. Everyone receive a fixed set amount, be free to work if you want and can, but you will be taxed on the whole.a program wider than super in utsreachThe whole thing is going to become a dog's breakfast, as you say Belli.
I have been saying for years the only way you can fix super and the pension, is to make it a universal pension.
It still rewards people who work and contribute to super, but they are taxed on it when it is withdrawn, so people can put away extra for a better retirement. But it doesn't overly reward the super rich and doesn't punish those who work hard and save for a better retirement.
The way it is at the moment, as happened last election, they are only looking at hitting the middle income earner who saves hard all their working lives and actually get less that the pension.
Trying to fiddle away at the edges with more complexity, just stuffs it all up more, super was introduced on a promise of a better retirement.
Now that has changed to super is there to replace your pension, that isn't going to work ever, why would people want to lose wages to save up so that they can lose the pension. Blind Freddy can see that wont work.
All that will happen will be less and less people will want to work, welfare for life will become rampant. IMO
Very true, but the present program is, work if you like we will just tax you more for those who can't or don't want to work, so tell me the difference?Just remember universal income is in the Reset program. Everyone receive a fixed set amount, be free to work if you want and can, but you will be taxed on the whole.a program wider than super in utsreach
I'll put it another way, the pension and superannuation system, as they currently are set up, aren't fit for purpose.Just remember universal income is in the Reset program. Everyone receive a fixed set amount, be free to work if you want and can, but you will be taxed on the whole.a program wider than super in utsreach
fully agree, the NZ system: a minimum pension, taxable for everyone is the way to go, in time of low return, and I do not mention risk, seeing people on the pension getting so much is absolutely gutting, but in a way, I am all for this universal income, it is timed well, I have stopped working and so will we all until the stupidity in the very idea makes it all collapse in a big mess with an economy a la venuzuela and big mining and China holding our corrupt puppet leaders .I'll put it another way, the pension and superannuation system, as they currently are set up, aren't fit for purpose.
Let's take a simple example using round figures, for ease of working out, rather than for precision.
1. At the moment, someone on $300k who puts money into super, gets a 35% reduction on tax, because instead of paying 50% tax they pay 15%.
Whereas someone on $40K gets no tax break, because instead of paying 15% tax on their income, they paid 15% tax on their contributions.
Wouldn't it be better to just give everyone the pension, give a 15% tax reduction on the marginal tax rate for contributions and tax the earnings at 15%, then tax the pension as normal income or at flat rate e.g 15,20 even 30%.
It has to be easier than what both parties are trying to do at the moment.
Super shouldn't be seen as a rich persons perk, just the same as the pension shouldn't be seen as a lazy persons perk.
Super should be there as it was intended, to enhance a workers retirement not as another indirect tax on workers, to prop up a pizz poor pension system.
Just my opinion.
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