A quarter of retirees will die with their super wealth intact

Really interesting observation. Full article here (Behind paywall)

Created a poll to see what PropertyChat community thinks about superannuation.

Still 20+ years for me to worry about accessing super so long time and my thinking would change by then for sure depending on my circumstance and rules at the time. But have selected option 3 (spend some and also rely on income/earnings)

Cheers,
Oracle.

 

Fully intend to leave something for my heirs. Just consider super to be just part of my assets and don't really look at super and assets outside of super differently.

 

Dont have any plans for it, dont want to die with it, dont know what to do with it other than keep growing it. Cant spend it all. Dont want to leave it to heirs they are taught to be self sufficient, they have more opportunities than I had, have more than they need and dont want to deny them of ambition and the feeling of satisfaction and self achievment. They wouldnt want it any other way any way. Probably leave it to local community groups, charity, medical research and give some to more deprived and underpriviliged people as I already do

 

Taxpayers are funding large inheritances

 

Almost 40 years until we get to 1 in 3 dollars becoming inheritance. Two thirds been used by the intended person is probably better than meant other government (or otherwise) initiatives.
Still having a tax on super which isn't used to fund retirement probably is a good idea. At least to recoup some of the very generous tax treatment.

 

At least Superannuation is assessable for government pension tests and there is a 15% tax on bequests from preferentially tax elements out of a super fund to non-dependent beneficiaries.

Super doesn’t cast a shadow on the family home for maximizing inheritance.

@oracle

I chose 3 for super. As I have already made plans outside of super for the next generation. Plan for super fund is to exhaust it but its super (pardon the pun) tricky not knowing when both partners will die, end of life expenses, future inflation or future returns to safely spend capital down too low. The reality is some will probably be left behind, the odds of consuming the capital smoothly and spending the last dollar on your last breath would be lotto like.

 

I'm not sure that the tax subsidies to super are always thought about in the right way. Yes the tax rates are lower but the capital grows and the government then gets it bite at a bigger apple.

I have just finalized this years SMSF return and updated my running spreadsheet on different metrics. Over the 19 years I have run the fund it has payed $703,496 tax on income and $36,851 tax on contributions. That's quite a few other peoples pensions funded with the tax "actually" paid - but all you are likely to hear from those people is how much "notional" tax advantage super receives.

 

For years, Governments of various persuasions have told me and many others "It's your money but not until you retire."

Well, I'm retired so it's now my money and I'll spend it or not spend it as I chose so they can all eff off.

 

Every once in a while there is news of an extreme case of a miser, like Gordon Elwood:

"A self-described miser who drank outdated milk, lived in an unheated house and held up his secondhand pants with a bungee cord has left $9 million to social service agencies."

Secondhand Pants, Unheated Home and a $10-Million Estate

And then there are people like Errol Flynn who was quoted as saying, "Any man who has $10,000 left when he dies is a failure."

I guess we're all wired differently.

 

Superannuation that is left to non-dependants is taxed at 16.5 per cent on the taxed element of the taxable component. This tax can be avoided by taking out the superannuation before you die. Superannuation left to a dependent beneficiary is untaxed.

 

What if it goes to the deceased estate and then into a testamentary trust?

 

It will depend on the terms of the trust. If a testamentary discretionary trust there will be a possibility it will go to non-dependants so it will be taxed. If the TDT incorporates a super proceeds trust with beneficiaries that are only dependants it won't be taxed - but that may not be good in some situations as the only beneficiary might be the spouse. That is why they should be considered to be optional.