Superannuation, the ultimate government cash cow?

[PZ99]

So 50,000 net people have lost out - along with the 200,000 who partly lost out.

Whichever way you arrange it - the age pension is looking more and more like the Titanic, because it's getting overcrowded and running out of steam.

The silver tsunami will sink it eventually.

It's just not a realistic goal to set for a comfortable retirement.

 

[Junior]

Age Pension payment rates are indexed every quarter and have been for a long time, so the actual pay rates aren't bad - assuming you have some savings and a debt-free home you can retire in relative comfort in Australia.

If you don't have a home or savings, you will struggle.

The taper rates are ridiculous and do not incentivise saving for your retirement.

 

[HelloU]

So 50,000 net people have lost out - along with the 200,000 who partly lost out.

Whichever way you arrange it - the age pension is looking more and more like the Titanic, because it's getting overcrowded and running out of steam.

The silver tsunami will sink it eventually.

It's just not a realistic goal to set for a comfortable retirement.

Agree totally with what u wrote....(do not know which side of the coin u are betting on and not reading back to find out - so trying not to say something u already know in the following as egg sucking)...
for me, the top end reductions are intended, and will continue in the future as more peeps retire who have super guarantee money.... pension will be a pure safety net and less lifestyle choice...cos peeps will be expected to rely on their SGC.

Not saying good or bad but we are in transition from getting govt pension on retirement normality......to accrued 45 years worth of SGC to pay for own retirement normality.

 

[HelloU]

Age Pension payment rates are indexed every quarter and have been for a long time, so the actual pay rates aren't bad - assuming you have some savings and a debt-free home you can retire in relative comfort in Australia.

If you don't have a home or savings, you will struggle.

The taper rates are ridiculous and do not incentivise saving for your retirement.

my above response is why i think the taper rates have been used...and will get worse in the future.....the incentive is about getting peeps to decide that the future pension will not be enough, so the normal future choice will be between living crook on the pension or get more into super from an earlier age. Not talking about the poor here who cannot save, but about those that have a nice nest egg and then splurge and spend up big, with the sole intent of getting onto the pension - the reason they currently do this is because they can, and the downside is still pretty good (if not better).

And yes, if you worked for 45 years and do not have a home or savings you will struggle......some had no choice, but others have had a pretty good 45 years.

 

[sptrawler]

At last a sensible move by a Bank, the dumbest thing a Government ever did, was let SMSF borrow to buy residential property.
It was destined to end in tears, and it will, all in the name of propping up a housing boom.

https://www.theage.com.au/business/...nding-to-diy-super-funds-20180716-p4zrsu.html

 

[sptrawler]

It will be interesting to see, the statistics on voluntary super contributions, since the recent announcements.
With the new caps and silly Billy's brain fart, add to that the Royal Commission and one would think the contributions would dry up.
Time will tell.

 

[sptrawler]

Well the uproar over Banks and super funds having a conflict of interest, duh why wouldn't they put their interests in front of the clients, it is like saying Harvey Norman shouldn't charge what they can get from the customer.
http://www.abc.net.au/news/2018-09-04/banking-royal-commission-embarassing-apra/10200028

 

[willy1111]

Well the uproar over Banks and super funds having a conflict of interest, duh why wouldn't they put their interests in front of the clients, it is like saying Harvey Norman shouldn't charge what they can get from the customer.
http://www.abc.net.au/news/2018-09-04/banking-royal-commission-embarassing-apra/10200028

Conflict of interest, it's everywhere:

pay people an hourly rate - what incentive do they have to actually work efficiently
pay people a commission - oh they will just tell you whatever you want to hear so they get the sale

The 100 page PDS created by banks and super funds, you think they want to create them - they are created to protect their interests from all the laws created by government to protect the people but in the end all it does is confuse most of the people, lol . . .viscous circle.

Whether we like it or not, we all act out of self interest - so you always gotta be asking yourself what's the other guy getting out of the transaction if I proceed.

 

[sptrawler]

The age pension is looking worse and worse. Because the Liberal Party screwed it last year.

Just ask those 200,000 recipients that had their entitlements reduced, and the 100,000 recipients that lost their entitlements altogether.

If you're a worker and you don't have a truckload of money, save your super pennies for a rainy day. The Liberal party want you to work until 70 before you get the age pension.

And don't count on any of the above getting rolled back under any future Govt either.

Well the 70 retirement age has been scrapped for now, well by Morrison, not to say Labor won't introduce it. But it has gone for now.
http://www.abc.net.au/news/2018-09-...aps-plans-to-raise-pension-age-to-70/10202678

The new pension rates, for a married couple, from March 2018 are up to $35,568.
https://www.superguide.com.au/accessing-superannuation/age-pension-rates

The assett limits have been raised, so a married couple who own their home receive full pension if assetts are below $387,500.

https://www.humanservices.gov.au/individuals/enablers/assets/30621

You think the pension is looking worse and worse.

I think putting money into super is looking worse and worse.

 

[PZ99]

That's good news and it means the Liberal party are finally waking up.

They could do one better than Labor and roll it back to 65 if they want.

Reverse the penalty rate thing and I'll vote ScoMo Liberal no wukkerz

 

[sptrawler]

That's good news and it means the Liberal party are finally waking up.

Apparently not, the AGE think lifting the pension age to 70 was a great idea, especially if it was the Libs who did it. lol

https://www.theage.com.au/politics/...o-for-australia-s-future-20180905-p501ua.html

It would be funny, if it wasn't so serious, it comes under the heading of social engineering.
ScoMo has wrong footed them, they want all the bad $hit to go down to Libs, while the soft nasty lower/middle class Labor $hit slides through and smells of roses.LOL

 

[PZ99]

I thought it was rather naive when Joe Hockey announced this policy and then sat outside parliament house choking on a cigar with one of his mates (Mathias Cormann I think it was).

What these limp-wristed pen-pushers don't get... is when it comes to physical work your body has a use-by date regardless of how long you live after that. Additionally, there's only a finite number of jobs available. I don't want some 68 year old blue collar worker struggling with a job that could've been taken by someone younger that might otherwise have been unemployed.

Michael McCormack summed it up perfectly. "I think if you are a tradie, or a brickie or a shearer in rural and regional Australia you don't want some suit in Canberra telling you you are going to have to work until you're 70"

If supporting the pension system means we have to pay higher taxes then so be it. IMO.

 

[HelloU]

I do not understand how come access to a tax free super pension at 60 years of age does not get included into any discussions on 'retirement' and government pension access.

The super guarantee payments out of wages has been going for a while now..........why is there no discussion of how they are expected to dovetail into the finances of retirees? What is the point of the super payments if they are not meant to reduce the reliance on the government pension? Or are they just meant to get you from age 60 to age 67? (so we can all retire at 60?)

 

[sptrawler]

I do not understand how come access to a tax free super pension at 60 years of age does not get included into any discussions on 'retirement' and government pension access.

The super guarantee payments out of wages has been going for a while now..........why is there no discussion of how they are expected to dovetail into the finances of retirees? What is the point of the super payments if they are not meant to reduce the reliance on the government pension? Or are they just meant to get you from age 60 to age 67? (so we can all retire at 60?)

It already is dovetailed in, if you have over a certain amount, you start losing pension, once over a higher amount the pension cuts out all together. Read up on it on the ATO website.
In reality you could retire age 60 and spend your money, then get the age pension, but most are reluctant to do so.
People who have saved tend to keep working as long as possible, those who haven't worked or saved, just continue on as normal usually welfare.

 

[HelloU]

(hope we are not talking at cross purposes)
I am familiar with the current systems and thinking but it is the future 'funding' of our retirements that I think is not being discussed and dovetailed into our thinking.

The statement "you don't want some suit in Canberra telling you you are going to have to work until you're 70" from the Deputy Prime Minister is concerning a law change that was to take place in 2035 (it did not hit 70 until 2035).

In 2035, if you were 60 years of age, you have 33 years of SGC to get you to the govt pension age of 70. In future years that same person would have approx 40 years of SGC when they hit the age of 60.

I always thought that SGC existed to offer the possibility of retiring at 60, and then spending that money until you died, or it was exhausted and the govt pension took over at that point. That was why I thought the government pension age was being raised in 2035 to 70 years of age.

(SGC started in 1992 )

 

[HelloU]

what else, by keeping the 70 pension age the govt would have also collected more tax money that currently does not get collected due to sapto, and that would have helped pay for the pensions.

 

[PZ99]

They could just as easily collect more tax money if they blew the pension age out to 75 or 80.
Not quite sure what the point is?

Some low income workers might need the super lump sum to pay off the mortgage - meaning it's another 3 years they have to stay at work if the pension age is 70. Or alternatively, they have to survive on the dole for 3 years if they're unfit for work.

At the end of the day it doesn't matter how much more money the Govt gets - they'll still blow it

 

[HelloU]

what else, by keeping the 70 pension age the govt would have also collected more tax money that currently does not get collected due to sapto, and that would have helped pay for the pensions.

this post is NOT about people going on/or on, the govt pension...this is about the people that will NOT be on the govt pension ..... that is what sapto is about.

My point was about the reason we have SGC ... if the perception is that the same % of retirees will go onto the pension (at the earliest age) in 2034 as the % that go onto the pension in 2108 (at the earliest age) then what is the point of SGC?. I would have thought that the reason for SGC was to reduce the % of the population reliant on the government pension, and that is why we contribute to it for 40 years of our working life.

 

[PZ99]

The SGC was originally designed to supplement your retirement income as an annuity and when you got to the pension age you would effectively have your annuity + a partial pension and if your super ran out you would go on the full pension. Your overall burden on the budget is less.

I don't see any connection with the SGC and blowing the pension age to 70. Blowing the pension age to 70 is a scabby effort to force people with no money to stay at work for an extra 3 years - whether they physically can or not.

 

[HelloU]

I sorta hoped that SGC would replace the govt pension for most workers ....... i mean in 2035 that 43years worth of contributions (with 43 years of tax advantages) would hopefully be worth something and mean that the govt pension is not required ........ cos that may mean joe average worker no longer has to go to work for the first 2 days of their 5 day week just to pay social security for those that do not work.