In fact, most people have no super when they die

Discussion in 'Superannuation, SMSF & Personal Insurance' started by twisted strategies, 18th Apr, 2021.

Join Australia's most dynamic and respected property investment community
  1. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    10,726
    Location:
    Extended Sabatical
    As was posted in the Thornhill thread regarding risk curves. Many, many risks for one party with that Plan Bra.
     

    Attached Files:

    MTR likes this.
  2. Heinz57

    Heinz57 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,959
    Location:
    Paradise
    No heirs so definitely going to try and spend the super down. But if the longevity timing fails badly it’s home equity
     
    SatayKing likes this.
  3. oasis1frog

    oasis1frog Well-Known Member

    Joined:
    11th Feb, 2021
    Posts:
    56
    Location:
    Brisbane
    When my father passed I got a bit of inheritance, but don't think I appreciate as much if I earned/saved myself. Probably the same when your adult kids & their spouse/partner inherit a huge sum.
     
  4. Gockie

    Gockie Life is good ☺️ Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    14,736
    Location:
    Sydney
    Agree to that.
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Reminds me a few interesting statistics

    1. Lawn bowls is the world most dangerous sport. More people die who are registered bowlers than any other sport.
    2. If you reviewed the statistical chance of death in the past 50 years it would confirm almost all lawn bowlers from 1950s, 60sand 70s are dead which confirms the issue in 1.

    Super is INTENDED to waste away. Once it was governed by actuarial life tables which wanted to repay the pension assuming all people died at a specific age. Some would die early and others would die late. Those who died later may lack financial pensions etc. The present account based pension system increases the minimum pension so that withdrawal occurs faster as members age. A member at age 60 strats drawing 4% and then this progressively rises so if they remain alive they can be drawing 14% (of any residual balance !!) by age 95. But rules prevent contribution so thats not likely. But it also allows them to spend it all and then take an aged pension. Of course many have no super pension. Death and spending arent mutually inclusive.

    I have long advocated that super members should be allowed to have a LIFE INTEREST pension for a certain % of their retirement pension. At present it is not allowed. This would kick in from say age 78 and could be a fixed % of the pension at age 60 or when they start. This may extend the term of the pension and encourage the initial XX (18?) years of a super pension to get them to that age. It was before Govt but it looks unappealing to retirees who seem to want to spend now and draw an age pension asap. On death a life interest pension would be released together with its earnings.