What are you doing with your superannuation?

[rell]

We are nine months on since the last reply to this thread.
Does anyone think a person in their mid fifties should be gearing in their super fund?
With the market rebounding so high off the March lows of 2009 and trending sideways at the moment I would think not.

 

[Bill M]

We are nine months on since the last reply to this thread.
Does anyone think a person in their mid fifties should be gearing in their super fund?
With the market rebounding so high off the March lows of 2009 and trending sideways at the moment I would think not.

I would not gear my normal investments let alone my Super Fund. My Super Fund has to last me the rest of my life and to try and get an extra couple of % by gearing is just too high a risk for me. Steady as she goes for this old tanker...

 

[So_Cynical]

I did some investment allocation switching in one of my super accounts back in March 09, i decided to go 45% Aust shares, 45% high growth and 10% Property...i used to have 100% in Balanced.

Got a statement the other day and was happy to see that by switching 45% to Aust shares i had recovered all the losses from 07 - 08 as my money allocated to Aust shares had grown by 34%, High growth returned 14% and property 5%

I Know a guy at work in his mid 40's with 100% of his super money in the colonial Aust shares geared fund...hes doing really really well.

 

[DocK]

I did some investment allocation switching in one of my super accounts back in March 09, i decided to go 45% Aust shares, 45% high growth and 10% Property...i used to have 100% in Balanced.

Got a statement the other day and was happy to see that by switching 45% to Aust shares i had recovered all the losses from 07 - 08 as my money allocated to Aust shares had grown by 34%, High growth returned 14% and property 5%

I Know a guy at work in his mid 40's with 100% of his super money in the colonial Aust shares geared fund...hes doing really really well.

Have most of our smsf invested in the factory that our business rents from it - bought at the right time for the right price so am happy with the unrealised capital gain on it. The rental proceeds are invested in a Colonial fund - half Aust Shares and half Geared Aust Shares - very happy with returns over past year, but am poised to switch it into the fixed interest option if weakness should set in. We're mid 40's. Goal is to buy another property in next few years and continue investing rental receipts on both properties. I prefer to have both property and share investments in our smsf so that hopefully we'll one day have an income stream from both.

 

[Julia]

The number of self managed Super Funds is growing every year.
No wonder when you see the results from the public funds.

The following are the average annual return for the past five years:

Goldman Sachs JBWere Superannuation Fund 9.6%
Worsley Alumina Superannuation Fund 6.8%
Commbank Officers Super Fund 6.3%
PostSuper 6.2%
Catholic Super 6.1%
UniSuper 5.7%
Suncorp Staff Super 5.6%
Maritime Super 5.5%
Electricity Supply Super Qld 5.5%
Health Super 5.4%

Hardly an endorsement of the skills of the so called professional managers.

 

[So_Cynical]

The number of self managed Super Funds is growing every year.
No wonder when you see the results from the public funds.

The following are the average annual return for the past five years:

Goldman Sachs JBWere Superannuation Fund 9.6%
Worsley Alumina Superannuation Fund 6.8%
Commbank Officers Super Fund 6.3%
PostSuper 6.2%
Catholic Super 6.1%
UniSuper 5.7%
Suncorp Staff Super 5.6%
Maritime Super 5.5%
Electricity Supply Super Qld 5.5%
Health Super 5.4%

Hardly an endorsement of the skills of the so called professional managers.

Half the problem is that so many funds just don't provide enough investment options, one of the funds im now trying to leave is TWU super, they have 3 investment choices, cash, balanced and high growth...that's it....and get this, they offer members 1 free financial planning consultation per year, and yet offer no real choices...im guessing the financial advice is pretty limited.

There's 10's of 1000's of people stuck in these no choice funds with there money going nowhere...and that seems to be ok for so many people.

 

[Julia]

Half the problem is that so many funds just don't provide enough investment options, one of the funds im now trying to leave is TWU super, they have 3 investment choices, cash, balanced and high growth...that's it....and get this, they offer members 1 free financial planning consultation per year, and yet offer no real choices...im guessing the financial advice is pretty limited.

There's 10's of 1000's of people stuck in these no choice funds with there money going nowhere...and that seems to be ok for so many people.

Good point. I understand most people take the default option of a Balanced fund.
The stats I quoted would have been more meaningful if they'd included a breakdown of the results over five years for each of the three investment choices you list.
I just found it pretty amazing that the returns were so low, given that during that five year period there was a sustained and healthy bull market, but your explanation of the investment choices goes a good way to explaining that, I guess.

I don't mean to ask an intrusive question, so ignore this if you wish, but I'm wondering why it's so hard for you to exit the Fund you're unhappy with.
I thought the government introduced legislation quite a while ago to allow people to move out of and into different funds?

 

[Garpal Gumnut]

More in cash than ever before.
I've started spending it.

gg

 

[So_Cynical]

I don't mean to ask an intrusive question, so ignore this if you wish, but I'm wondering why it's so hard for you to exit the Fund you're unhappy with.
I thought the government introduced legislation quite a while ago to allow people to move out of and into different funds?

Some funds seem to not want to let go :dunno: im also being a little stubborn with the situation...to switch funds you need your employer to provide a termination date and a ID form filled out and witnessed by a qualified person.

Now my previous employer didnt provide the date of termination and they (TWU Super) didn't like my qualified witness as they said his name was not legible...anyway i spit the dummy immediately and wrote to there complaints dept stating that they had 90 days to resolve the issue or i would make a formal complaint thru the superannuation complaints tribunal.

The 90 days is a requirment of the superannuation complaints tribunal...the 90 days is up on the 25 of April.

 

[BradK]

Stupid question here.

Can my compulsory contributions from my employer go into my own SMSF? How do I set it up? Or only voluntary contributions?

Brad

 

[Julia]

Not at all a stupid question, Brad. It appears so.
http://www.investsmart.com.au/super/basics.asp?ArticleID=140

 

[BradK]

Not at all a stupid question, Brad. It appears so.
http://www.investsmart.com.au/super/basics.asp?ArticleID=140

Many thanks Julia, I did some research, and they think that I need at least $100,000 in super in order to make it worthwhile. Below that, the wisdom says, and the fees/ admin are too high.

THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k?

Brad

 

[waza1960]

THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k

You can do it when ever you want thats just what the industry says
its a load of crap IMO perpetuated by the industry.
I started my super fund back in 2002 with less than 60k no problems
I paid less fees / year than my old Super fund was charging.
Of course you can get the compulsory employer contributions paid in.

Some funds seem to not want to let go im also being a little stubborn with the situation...to switch funds you need your employer to provide a termination date and a ID form filled out and witnessed by a qualified person.

The rule here unfortunately not the exception the big super funds generally make it as tedious as possible to remove your money using government regulations as an excuse.They would have to qualify for an award as having the most inefficient administration practises around .
A lot of them won't even allow online payments they still insist on cheques sent in the mail but I guess its not there money so why be efficient?

 

[So_Cynical]

Many thanks Julia, I did some research, and they think that I need at least $100,000 in super in order to make it worthwhile. Below that, the wisdom says, and the fees/ admin are too high.

THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k?

Brad

http://www.esuperfund.com.au/
SMSF Setup Fee : FREE
SMSF Annual Fee : $599 Fixed
Includes the SMSF Audit

The question is can you make enough money trading via your SMSF to cover the 300 or 400 in extra costs?

 

[tech/a]

Went SMSF when the govt kindly let us place $200K a year in it for a few years then $100K. Property is my investment choice for super---freehold and I rent my own business property.

Anyway the problem is well beyond saving a nest egg super.
Lets say you are going to live to 90 and evidently according to Julia's Questionaire a few may well get there saving accident.

So we get to 55-65 and decide to retire.
Unless we have a passive income geared to increase with inflation our super is going to evaporate in around 10 yrs.

Planning for super should be way beyond just accumulating cash which is one of the quickest assets to erode.

Just my opinion.

 

[Bill M]

I don't mean to ask an intrusive question, so ignore this if you wish, but I'm wondering why it's so hard for you to exit the Fund you're unhappy with.
I thought the government introduced legislation quite a while ago to allow people to move out of and into different funds?

Hello Julia and So_Cynical, in the last 8 years I have changed my super fund 4 times. On each occasion it was only a matter of downloading and filling out a rollover form which was on the Super Funds website that I wanted to join. Nobody ever rang me or asked any questions for any of the events. Usually by the time it had all been completed it was not more than 4 weeks. The last time was last year, this time they wanted a copy of my license witnessed by a JP as a true copy for ID. Apart from that the matter was all over and done in 4 weeks.

 

[Bill M]

So we get to 55-65 and decide to retire.
Unless we have a passive income geared to increase with inflation our super is going to evaporate in around 10 yrs.

Planning for super should be way beyond just accumulating cash which is one of the quickest assets to erode.

This is true however, lets use the example of a 60 y/o couple with $1 Million in a Super cash account earning 8% p/a. (This was possible with a Westpac Term Deposit last Month). The couple only need 40k to cover all their expenses for a year, including everything. They only withdraw the 40k per year and the other 40k keeps earning interest with the other $1 Million already working for you. In this case your capital is building each year and there is no need to take risks by buying assets such as shares or property. GFC's or Property crashes would not concern these investors.

 

[So_Cynical]

This is true however, lets use the example of a 60 y/o couple with $1 Million in a Super cash account earning 8% p/a. (This was possible with a Westpac Term Deposit last Month). The couple only need 40k to cover all their expenses for a year, including everything. They only withdraw the 40k per year and the other 40k keeps earning interest with the other $1 Million already working for you. In this case your capital is building each year and there is no need to take risks by buying assets such as shares or property. GFC's or Property crashes would not concern these investors.

And that's great if you own your house and have a million in your super account, however according to this story form late 09 the average super punter is a long way short of that figure.

SUPERANNUATION funds are forecast to grow by an average 8 per cent a year for the next five years, although the average balance is still only tipped to be $78,000 by 2014.

http://www.heraldsun.com.au/money/s...nce-to-hit-78000/story-e6frfh5x-1225804475249

 

[tech/a]

This is true however, lets use the example of a 60 y/o couple with $1 Million in a Super cash account earning 8% p/a. (This was possible with a Westpac Term Deposit last Month). The couple only need 40k to cover all their expenses for a year, including everything. They only withdraw the 40k per year and the other 40k keeps earning interest with the other $1 Million already working for you. In this case your capital is building each year and there is no need to take risks by buying assets such as shares or property. GFC's or Property crashes would not concern these investors.

Fine if there was no inflation.

35 yrs ago my Father retired with enough to buy 12 houses.
Say 12 x todays average of $350K so thats pretty substantial.
It was around $500K
Today hes simply a pensioner.

 

[Julia]

Many thanks Julia, I did some research, and they think that I need at least $100,000 in super in order to make it worthwhile. Below that, the wisdom says, and the fees/ admin are too high.

THoughts anyone? The way my super is going, I am never going to GET to $100,000! Why can't I take control of it at around $60k?

Brad

http://www.esuperfund.com.au/
SMSF Setup Fee : FREE
SMSF Annual Fee : $599 Fixed
Includes the SMSF Audit

The question is can you make enough money trading via your SMSF to cover the 300 or 400 in extra costs?

Brad, So Cynical has given you the costs for Esuperfund which support the suggestion that the commonly offered advice from the financial industry that you need at least $200K is not necessarily true. It's difficult not to interpret industry advice as being self interested, i.e. if everyone were to go the SMSF way, they'd be struggling for an income!

I'm sure you can way exceed the costs of the annual SMSF fees by your own efforts, even with such a low base.

And that's great if you own your house and have a million in your super account, however according to this story form late 09 the average super punter is a long way short of that figure.



http://www.heraldsun.com.au/money/s...nce-to-hit-78000/story-e6frfh5x-1225804475249

It's true that at the present time the average super holder has way less than he/she needs to retire. It's imo a good case to increase the compulsory contribution to 15%. We need to bear in mind, though, that compulsory super hasn't been in effect long enough (introduced by Paul Keating in 1992) to reasonably expect that those retiring in the next decade or so will have enough.

Fine if there was no inflation.

35 yrs ago my Father retired with enough to buy 12 houses.
Say 12 x todays average of $350K so thats pretty substantial.
It was around $500K
Today hes simply a pensioner.

That's very surprising, Tech/a. Did he in fact buy the 12 houses (in which case the capital appreciation alone, without considering rental income) should have increased his worth very considerably in 35 years? Or did he stick the money in the bank?
Hard to see that $500K 35 years ago if well managed should have led to him having nothing today.