Not entirely true.
A friend of mine took out the maximum $20k allowed and used it to trade the market. Current balance is $26k. That is a 30% return in 11 months, far better than the super fund would have provided.
The 3 million workers who partook of the Liberal government's "Early Access To Your Super" scheme, sadly sold out at the worst possible time ,from the 20th April,last year,with the ASX trading 25% below its pre pandemic peak.
According to (left-leaning) Mckell Institute, that $36.4 Billion would now be worth $41.1 Billion."And that loss only compounds over time" says Mckell's executive director.
Same happened with a friend her niece who is in her 20's pulled out some super and bought NAB at around $15, so it isn't all doom and gloom.Not entirely true.
A friend of mine took out the maximum $20k allowed and used it to trade the market. Current balance is $26k. That is a 30% return in 11 months, far better than the super fund would have provided.
Just a guess, you were providing your daughter food and accomodation, maybe even a car, paying her internet and power and maybe even uni fees.and yet... from 16 to 23 years old, my daughter worked at a waitress. These SG slips started turning up; dribbles of $20 here, $30 there.. So what did we do?
Apart from the obvious one of consolidating accounts, because there was no default apart from the whim of the owner, every year I dropped $1000 in her fund as a co-contribution. Government matched it, $1500 for a few years, then $1000 then (too good to be true) dropping to $500. When she finished uni and entered the fulltime workforce, she had a balance of $56K for the 8 years of effort (and my 8 Grand). And now, she's still under 35, the balance is close to $300K.
(no she doesn't have a credit card debt; just bought a house to follow from the modest apartment she initially purchased)
Wouldn't it be great if she could take the $300k, pay the house off and then contribute some of the house payment into her super?and yet... from 16 to 23 years old, my daughter worked at a waitress. These SG slips started turning up; dribbles of $20 here, $30 there.. So what did we do?
Apart from the obvious one of consolidating accounts, because there was no default apart from the whim of the owner, every year I dropped $1000 in her fund as a co-contribution. Government matched it, $1500 for a few years, then $1000 then (too good to be true) dropping to $500. When she finished uni and entered the fulltime workforce, she had a balance of $56K for the 8 years of effort (and my 8 Grand). And now, she's still under 35, the balance is close to $300K.
(no she doesn't have a credit card debt; just bought a house to follow from the modest apartment she initially purchased)
Must be kind to those who went to cash
if not reversed, then reversion to the mean?While many probably had to do that and some who didn't need to did, they must be gnashing their teeth at the returns from last FY. The FP sent me a quick snap shot at EoFY for the SMSF and it returned 36% (I'm sure other funds did better than that but I'm OK with it.) The best performers were MLT (no surprise there) at 54% and MIR at 62%. Even sleepy WHF cracked 44%. Having said that this FY it'll all be reversed of course!
One of the misunderstandings about SMSF is the taxation regime.Astonishing figures in today's AFR for the top SMSF's. From the ATO's files, there are currently 6,000 of them with more than $5 Million in assets. 500 of those are over this threshold. Way over! The numero uno SMSF, had a 30th June 2019 valuation of more than $1/2 Billion.
This big daddy only has to compound at a modest 8% p.a. for it to be worth $ 1 TRILLION, just before the end of this decade. Perhaps the only consolation for poor folks on welfare or workers, suddenly back on Jobseeker, is that these worthy individuals will be dead in 20-30 years and their lightly taxed savings will have to come out of the superannuation system. It will then get to be (properly) taxed at the heirs' marginal rate.
One of the unspoken reasons for the demise of Malcom Turnbull, within his eastern suburbs constituency, was his successful pursuit of super rorts from the Howard-Costello era. From 1st July 2017, it was deemed $ 1.6 Mill (now 1.7) tax free super ought to be enough for most fair minded Australians for their retirement.....It seems there's still more work to be done.
That is all a bit vague, from my understanding the only amount that is tax free, is the component that is in pension phase.Astonishing figures in today's AFR for the top SMSF's. From the ATO's files, there are currently 6,000 of them with more than $5 Million in assets. 500 of those are over this threshold. Way over! The numero uno SMSF, had a 30th June 2019 valuation of more than $1/2 Billion.
This big daddy only has to compound at a modest 8% p.a. for it to be worth $ 1 TRILLION, just before the end of this decade. Perhaps the only consolation for poor folks on welfare or workers, suddenly back on Jobseeker, is that these worthy individuals will be dead in 20-30 years and their lightly taxed savings will have to come out of the superannuation system. It will then get to be (properly) taxed at the heirs' marginal rate.
One of the unspoken reasons for the demise of Malcom Turnbull, within his eastern suburbs constituency, was his successful pursuit of super rorts from the Howard-Costello era. From 1st July 2017, it was deemed $ 1.6 Mill (now 1.7) tax free super ought to be enough for most fair minded Australians for their retirement.....It seems there's still more work to be done.
I'm no finance/tax lawyer but I bet they've got it pretty well figured out, even if it's just running on grandfathered rules.One of the misunderstandings about SMSF is the taxation regime.
I have been managing our family SMSF for over 25 years, but unfortunately do not figure in any of the tables for the biggest funds.
Under current rules, an SMSF can have a max of 6 family members, and all members contributions, earnings distributions, pensions etc will be taxed differently.
Once a member of an SMSF reaches 65 or whatever the deemed age is for younger people, a minimum of 5% of the super fund must be taken in a pension. As the member ages, this percentage increases every 5 years up to a maximum of 14% if the lucky bugger manages to reach 95!.
So, at some point in time, the beneficiary has to start taking out a minimum pension. In the case of the person with the half bill fund (assuming it is a single member), they would have to take out 25 million pension on reaching 65, and 25 mill next year etc etc. These triggering events create issues for cash flow, as sometimes hard assets need to be sold out to provide the cash for a large pension payout.
What they then do with the money will of course most likely attract some sort of tax, either as CGT, stamp duty, GST etc depending on how they invest it. Even just letting sit in the back would attract considerable income and thus likely maximum tax rate.
Given that there is a limit of 1.8 mill on concessional member contributions, it is unlikely that really large SMSF's will continue to be created, apart from the ones already in existence.
Mick
Astonishing figures in today's AFR for the top SMSF's. From the ATO's files, there are currently 6,000 of them with more than $5 Million in assets. 500 of those are over this threshold. Way over! The numero uno SMSF, had a 30th June 2019 valuation of more than $1/2 Billion.
This big daddy only has to compound at a modest 8% p.a. for it to be worth $ 1 TRILLION, just before the end of this decade. Perhaps the only consolation for poor folks on welfare or workers, suddenly back on Jobseeker, is that these worthy individuals will be dead in 20-30 years and their lightly taxed savings will have to come out of the superannuation system. It will then get to be (properly) taxed at the heirs' marginal rate.
One of the unspoken reasons for the demise of Malcom Turnbull, within his eastern suburbs constituency, was his successful pursuit of super rorts from the Howard-Costello era. From 1st July 2017, it was deemed $ 1.6 Mill (now 1.7) tax free super ought to be enough for most fair minded Australians for their retirement.....It seems there's still more work to be done.
Not all of it. Depends on how much was contributed tax free, including the generous $1m contribution (each) allowable in 2007 I think, and the $148k pa (each). While the earnings above the $1.6m balance cap (each) or so may be taxed those amounts are still tax free when withdrawn. That's my understanding anyway.
There's also testamentary trusts to throw another factor in.
Like I said, they'll have it figured out.
Oops, got the facts wrong, again . Blinded by too many zeros. Should read half a million, not Billion ($ 544 Million to be precise ). A lot of dosh there, for just 2 people, possibly 4 under the old rules up to the start of July, this year.Astonishing figures in today's AFR for the top SMSF's. From the ATO's files, there are currently 6,000 of them with more than $5 Million in assets. 500 of those are over this threshold. Way over! The numero uno SMSF, had a 30th June 2019 valuation of more than $1/2 Billion.
This big daddy only has to compound at a modest 8% p.a. for it to be worth $ 1 TRILLION, just before the end of this decade. Perhaps the only consolation for poor folks on welfare or workers, suddenly back on Jobseeker, is that these worthy individuals will be dead in 20-30 years and their lightly taxed savings will have to come out of the superannuation system. It will then get to be (properly) taxed at the heirs' marginal rate.
One of the unspoken reasons for the demise of Malcom Turnbull, within his eastern suburbs constituency, was his successful pursuit of super rorts from the Howard-Costello era. From 1st July 2017, it was deemed $ 1.6 Mill (now 1.7) tax free super ought to be enough for most fair minded Australians for their retirement.....It seems there's still more work to be done.
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