Superannuation, the ultimate government cash cow?

[sptrawler]

IMO super is just turning into another indirect tax on workers.
The rules continually change, who is to say at a later date, that a Govt wont enact a decision that super has to be spent before the person qualifies for any pension.
IMO it would be far more beneficial, that someone owns their own house and isn't paying rent, than having more money in super.
Everyone needs food and shelter, once you own your own house, the living costs become fairly fixed or at least in your control.
If someone retires and is renting, that is a variable cost, that can change immensely, add to that the amount you can withdraw from your super can be changed if the Govt wishes.
So just about everything in your life, is controlled by the Government of the day, whereas if the major cost (accomodation) is removed from Govt control, it places the control to a much greater degree with the individual.
Super is going to end up the biggest scam ever perpetrated on the worker, take for example if a Govt decides super can only be taken as an annuity, would that be beneficial for most recipients?
Well there is already talk of using super to build Govt infrastructure, a problem with that would be the individual at the moment can withdraw all their super if they so wish, that wouldn't work for a Govt that had long term projects that they wanted super to underwrite.
Time will tell, as usual, but I can see a lot of limitations being placed on how the individual can access the Governments super.

 

[sptrawler]

Interesting article, doesn't sound like super balances are going anywhere fast and with inflation the amount required will be going up faster than balances in super.

What's the average Aussie superannuation balance at age 60?

Do you know the balance of your superannuation account? Here's how much the average Aussie has in super at age 60.

www.fool.com.au

 

[Belli]

Interesting article, doesn't sound like super balances are going anywhere fast and with inflation the amount required will be going up faster than balances in super.

What's the average Aussie superannuation balance at age 60?

Do you know the balance of your superannuation account? Here's how much the average Aussie has in super at age 60.

www.fool.com.au

The average can be misleading. It'd be better (although depressing) to compare the median with the average as you will find the median is lower by a considerable amounts due to some having relatively low balances, e.g. $400k and others very large balances, e.g. $544m. I've seen the comparison by I am too lazy to find the information again. I think the data was from the ATO but it probably available from other sources.

 

[sptrawler]

The average can be misleading. It'd be better (although depressing) to compare the median with the average as you will find the median is lower by a considerable amounts due to some having relatively low balances, e.g. $400k and others very large balances, e.g. $544m. I've seen the comparison by I am too lazy to find the information again. I think the data was from the ATO but it probably available from other sources.

Very true, I was always going hard to become self funded, anyone who knows me always commented on it.
Yet I consider myself lucky I did, because at the moment I think we will scrape through, but I wouldn't be confident if I had any less.
I would have to be much more aggressive chasing returns and we all know how that can end badly.
I really think unless they do something to stop the house price spiral, there will be a generation lost, as their savings are being devalued at a rate that won't give them the time or working life to recover.

 

[Belli]

Couldn't help myself. APRA data on the funds for which it has oversight. It's very expansive. Nerds can have fun for days.

Annual fund-level superannuation statistics | APRA

APRA publishes statistics on individual superannuation funds and their trustees, on an annual basis. These statistics contains information on fund profile and structure, financial performance and position, conditions of release, fees and membership. In October 2024 APRA released, for the first...

www.apra.gov.au

 

[qldfrog]

Very true, I was always going hard to become self funded, anyone who knows me always commented on it.
Yet I consider myself lucky I did, because at the moment I think we will scrape through, but I wou,don't be confident if I had any less.
I would have to be much more aggressive chasing returns and we all know how that can end badly.
I really think unless they do something to stop the house price spiral, there will be a generation lost, as their savings are being devalued at a rate that won't give them the time or working life to recover.

You realise as well that if they stop or just a bust comes for the house price spiral, then the assets of all buyers aka still most of Australians will collapse and by far far more than most total super balance.
In a silly way, the best super for most of Aussies is ever inflating house prices.
And any price bust will automatically smash house builders, tradies and dependents..
I am sure the rest of the economy will catch up easily..more baristas, Public Servants for centerlink, NDIS helpers and at best an extra 300 miners and farmers...
Do not even dream of a RE market crash as I do not believe the current Australia could survive it so the extreme all gov go to push the can
Need to get out of this situation we agree...

 

[Dona Ferentes]

Couldn't help myself. APRA data on the funds for which it has oversight. It's very expansive. Nerds can have fun for days.

well, we know what you'll be doing mid Dec...

Next release​

13 December 2023 (June 2023 edition)

 

[sptrawler]

You realise as well that if they stop or just a bust comes for the house price spiral, then the assets of all buyers aka still most of Australians will collapse and by far far more than most total super balance.
In a silly way, the best super for most of Aussies is ever inflating house prices.
And any price bust will automatically smash house builders, tradies and dependents..
I am sure the rest of the economy will catch up easily..more baristas, Public Servants for centerlink, NDIS helpers and at best an extra 300 miners and farmers...
Do not even dream of a RE market crash as I do not believe the current Australia could survive it so the extreme all gov go to push the can
Need to get out of this situation we agree...

We have had them before and I'm sure we will have them again. A housing crash will hammer the market, especially the financial sector, but to leave It as it is will just end up with the rich owning all the property and the workers being lifetime tenants.

 

[Belli]

well, we know what you'll be doing mid Dec...

Next release​

13 December 2023 (June 2023 edition)

I know. Sad isn't it?

 

[Belli]

Very true, I was always going hard to become self funded, anyone who knows me always commented on it.
Yet I consider myself lucky I did, because at the moment I think we will scrape through, but I wouldn't be confident if I had any less.
I would have to be much more aggressive chasing returns and we all know how that can end badly.
I really think unless they do something to stop the house price spiral, there will be a generation lost, as their savings are being devalued at a rate that won't give them the time or working life to recover.

We were the same. I consider I was extremely fortunate my late wife and I had a similar mentality in knowing that once we ceased employment that income would disappear and we needed to replicate it and more in order to remove financial stress later in life as well as being in a position to assist our children where possible.

 

[qldfrog]

We have had them before and I'm sure we will have them again. A housing crash will hammer the market, especially the financial sector, but to leave It as it is will just end up with the rich owning all the property and the workers being lifetime tenants.

This is the case in most of Europe and the dream of the WEF.
As long as there is no death duty, Australians are mostly protected as kids will inherit their parents overpriced assets.best super you can have.
the real key to smash us, the 99% is death duty which will be presented as a fairness tax
Obviously, the real wealthy ones will owe nothing in their name...

 

[sptrawler]

This is the case in most of Europe and the dream of the WEF.
As long as there is no death duty, Australians are mostly protected as kids will inherit their parents overpriced assets.best super you can have.
the real key to smash us, the 99% is death duty which will be presented as a fairness tax
Obviously, the real wealthy ones will owe nothing in their name...

That is coming for sure, it's not if, it's when.

 

[Warr87]

The average can be misleading. It'd be better (although depressing) to compare the median with the average as you will find the median is lower by a considerable amounts due to some having relatively low balances, e.g. $400k and others very large balances, e.g. $544m. I've seen the comparison by I am too lazy to find the information again. I think the data was from the ATO but it probably available from other sources.

Yea I think the median would be a better number. But the mean is probably more impactful for an article. Looking at those averages, I know of people who have far less than that super in their 60's. Look at my own age group, I appear to be close for the average (I'm at the bottom of the age bracket so adjusted for a few years I think I'm fine). Fingers crossed.

 

[Warr87]

This is the case in most of Europe and the dream of the WEF.
As long as there is no death duty, Australians are mostly protected as kids will inherit their parents overpriced assets.best super you can have.
the real key to smash us, the 99% is death duty which will be presented as a fairness tax
Obviously, the real wealthy ones will owe nothing in their name...

I don't necessarily have an issue with a death tax. But as its been pointed out, the real wealthy ones won't have anything in their name. inherenting those large realestate portfolios is going to leave a crazy amount of inherented property.

many on this forum probably know my thoughts on the over priced market of RE. i think when that bubble does burst, it will definitely cause some problems. In the context of super and its related policy, who knows what will come out? if it results in tax havens or special concessions I think it'll do some harm. But one thing is for sure, any bust of that bubble will cause some super's to be in panic mode.

 

[TimeISmoney]

This is the case in most of Europe and the dream of the WEF.
As long as there is no death duty, Australians are mostly protected as kids will inherit their parents overpriced assets.best super you can have.
the real key to smash us, the 99% is death duty which will be presented as a fairness tax
Obviously, the real wealthy ones will owe nothing in their name...

I'm pretty sure they're going to go after anyone who has a residential asset worth over a 1mil and is on a pension, which isn't hard if you owned an old shack in inner-city suburbs for over 60 years. They will be forced to sell and then lose their pension, this is the dream of the greens I believe. The thing is you can't transfer property these days to offspring before you die without paying huge taxes and they've also conned some pensioners to go reverse mortgage so that when they pass on the crown will want its cut of the estate with interest.

 

[Dona Ferentes]

hahaha why real estate agents are not financial advisers

People are looking and wanting longer [settlement ] time, so they’ve got time to buy something, and they are planning for their retirement. And super is part of it. People are saying with the costs increasing they’re going to need more money than they thought they did for retirement.

A few years ago, people rightsizing wanted to put a couple of hundred thousand dollars into super. Now they’re wanting to put a significant amount in. I’m talking about people putting five times more into their super than they were talking about in the marketplace a couple of years ago.

lt’s not unheard of for people to take $1 million out of their home and put it into super.

really! how? what a moron.

This $3.8m sale shows the pressures on downsizers

In a low-stock market, vendors want longer settlements. But the rising cost of living means they’re also putting more money into super when they sell.

www.afr.com

 

[Warr87]

I don't know of anyone taking out a mil and putting it into super. Though I don't tend to ask people how they are investing their super, lol. And I grew up to a working class family and area, so not a lot of people with that kind of cash in property or super. I can't read the full article as it's behind a paywall, but definitely don't trust RE agents for financial advice lol.

 

[trmcom]

Super is really a way for advisers to have a career, but what is Super?

I have been thinking about that for the last 5 years and not taking property into a so called diversified portfolio it is really a dozen index funds and a reverse ETF thrown in at different ratios so if the market goes bullish you make a reasonable profit and when it goes bearish the reverse ETF takes the brunt of the losses, or softens it.

"Diversifying your portfolio" is a cliche remark, but what does it mean putting some into Bonds, (a bank does just as well in AU) most into AU markets some into overseas markets and probably 30% into the reverse ETF or a commodity, so you need half a million for decent gains since the buffer stock reduces profit margins.

So we end up with the standard model that if the US markets plunge you Super also drops, but not much with the safety net.

You also think that 10% tax free and compounding each year is as good as it gets.

So $100,000 requires 13 years or so to double, while someone trading in one index fund can make substantially more.

The rich get richer, and the poor stay relatively poor.

 

[Warr87]

Super is really a way for advisers to have a career, but what is Super?

I have been thinking about that for the last 5 years and not taking property into a so called diversified portfolio it is really a dozen index funds and a reverse ETF thrown in at different ratios so if the market goes bullish you make a reasonable profit and when it goes bearish the reverse ETF takes the brunt of the losses, or softens it.

"Diversifying your portfolio" is a cliche remark, but what does it mean putting some into Bonds, (a bank does just as well in AU) most into AU markets some into overseas markets and probably 30% into the reverse ETF or a commodity, so you need half a million for decent gains since the buffer stock reduces profit margins.

So we end up with the standard model that if the US markets plunge you Super also drops, but not much with the safety net.

You also think that 10% tax free and compounding each year is as good as it gets.

So $100,000 requires 13 years or so to double, while someone trading in one index fund can make substantially more.

The rich get richer, and the poor stay relatively poor.

I am a fan of super, but I think it's lost its way over the years. Someone needs to create a fund that just puts money into an index (without someone having to create a SMSF). Should be a default. Instead of paying managers who rarely meet the benchmark, just have people's super in an index. The fund can charge a very small management fee for buying/sell the ETF for the index haha.

Diversifying is definitely a cliche remark. It is one for a reason. But what cosntitutes diversified can change between people. Like you, I'm not a fan of adding in property per se. In my own research and testing systems I also found that an ASX/SPY index strat performed well without the traditional bonds added in. It didn't do much for what I was testing, even with DD.

I hope for others that it doesn't take 13yrs for their super to double.

 

[mullokintyre]

I am a fan of super, but I think it's lost its way over the years. Someone needs to create a fund that just puts money into an index (without someone having to create a SMSF). Should be a default. Instead of paying managers who rarely meet the benchmark, just have people's super in an index. The fund can charge a very small management fee for buying/sell the ETF for the index haha.

Problem with the above is that for those who are now in the retirement phase, either transitioning or completely, there needs to be a mechanism to allow members to easily take money out, either as a pension, or in adhoc withdrawls.
The super industry is raking in too much money to ever allow that to happen.
mick