People listen to this bloke?

Absolutely that would affect some but imo its like having blackmores wagyu at a restaurant in the past, going in now and seeing rangers valley beef on offer abd deciding youre not eating beef at all anymore as a result, sure one is better than the other but theyre still better than vast majority of options out there.

 

Also, i think its arguable that there are all that manh people out there who have not only put in 30k per year concessional last few years but would have put 50k instead had they been allowed to. I suspect its a fairly small number

 

That's racist.

 

Exactly.
I don't trust the government to keep their hands off it for the next 55 years.

 

you think the government is going to access your super, which they have no legal right to do, for their own use?

umm yeah nah.

remember on top of the huge legal and political ramifications of doing so, the whole point of super being pushed and incintevised by the government was to have more people be self funded in retirement as the govt cannot afford to pay pensions in the future at current projected growth rates.

there is simply nothing that even remotely suggests the government will decide to wade into managed funds they do not own to take funds off millions of people they have no right to do so, or they will wade into smsf's, take their clip etc. nothing at all to suggest it despite it being an often repeated boogieman story.

think about it, how would it work? what if you had a smsf that owned commercial property that was mortgaged to a bank? the govt would come in and take the buffer funds? or force the sale of a propety that not only your smsf but the bank has legal claim to?

how would the government, in any practical way, get their hands on people's super in a country like australia where the managing of that super is a private and highly spread out matter instead of being a centrally controlled body like singapore's CPF?

 

there is a big difference between pension age and preservation age, at the moment up to 12 years.

In your example above, currently people at 55 (going up to 60 if theyre born after a certain year) can start drawing a pension but not have full access to it, whereas pension age is 65-67 or so atm based on year of birth. so both the carer in 70s working part time and burnt out 60 year old would be able to access their super, just as you suggest is appropriate.

thats a minimum of 7 and max of 10 year difference in terms of how long the wait will be for access to it that many of the anti super crowd do not consider.

so if someone currently wants to retire at say 50, they only need to self fund for 5 years before super can start to supplement their retirement.

youre absolutely right, it is important for there to be a bit of a choice due to differences in people's situations as well as sustainability of jobs etc. that choice/flexibility already exists and has for a long time.


"
You can access your super:

• when you turn 65 (even if you haven’t retired), or
• when you reach preservation age and retire, or
• under the transition to retirement rules, while continuing to work.

There are very limited circumstances where you can access your super savings early. These circumstances are mainly related to specific medical conditions or severe financial hardship.

Your preservation age is not the same as your pension age. Your preservation age is the age at which you can access your super if you are retired (or have started a transition to a retirement income stream)."

 

But this happened at the last election. The Gov proposed retrospective changes to super and got slammed.

Voters punished Liberals in Senate over super changes, senator says

Increase tax on super.
1) increase the tax on contributions; and/or
2) increase the tax on earnings; and/or
3) increase the tax on withdrawals from super.

Tax.

 

tax on earnings is still a tax on profit/gains and in no way can it reduce capital.

as for contributions, if the govt increased tax on contributions to a too high figure you could choose not to make those contributions so again, they would not get their hands on your money if you choose not to make that contribution.

the govt changes were well intentioned and not too far off the mark imo but stupidly handled, in particular making it valid from that date and there not being say a grace period. anyone saying its retrospective doesnt understand much in this arena imo, can anyone out there put their hands up and say that the changes to NCC caps, if brought in, will hurt their current situation (ie be truly retrospective) as opposed to preventing them from putting more NCC funds in (ie future actions not past, ie not retrospective)? ive not met a soul who can say it.

 

But it would be seen by Joe Public as the government "getting their hands on" their super.

Most contributions are not voluntary.

 

1) Joe public is generally a financial novice, why are we paying creed to his/her opinion when factually discussing merits of super as an investment vehicle? i wouldnt ask joe public for their opinion on keyhole surgery either, not far off in terms of being qualified to comment.

2) if youre referring to employer contributions (ie not voluntary), they are taxed at 15% currently with low income earners getting a top up on the 15% tax paid. if the government decided to raid this like youre saying might be possible, the most they could go up to is to charge the same amounbt of tax youre paying personally outside super which would mean, as WORST CASE, unlikely but ultimately technically possible doomsday scenario, there would be no tax savings on contributions but it would not leave anyone worse off from a tax POV.

so again, the government would noit be getting their hands on it, certainly not more than if you had the funds outside super.

im still yet to be convinced and im genuinely open to being proven wrong as it's an area of interest to me.

 

I was thinking along the lines of embezzlement.

 

I wasn't aware that we were factually discussing the merits of super as an investment vehicle. I though the question was: how can the government legitimately 'get their hands on super', when super is privately held.

Sure, but relative to now I would feel like the government was getting their hands on my super. I think you also got confused because I never made the claim that the government can raid super.

I'm not really trying to prove you right or prove you wrong. You asked a question and I answered it.

I invest in super. I salary sacrifice into super. So I do have some faith in it. But I won't be relying on super solely as income in retirement, simply because I don't trust the government to keep their hands off my super. There is over $2 trillion dollars in super and this is growing annually. Future governments could see this as a potential source of revenue and increase taxes in any of the areas I have mentioned, or all of them. It is a real risk.

From a risk management point of view, I don't have enough faith in super for it to be my only income stream in retirement. Would you feel financially secure if you only had super in retirement as your sole income stream?

 

[

re how can govt get their hands on super, i did specify why i disagreed and whether or joe public or you, me or my grandmother feels something is irrelevant, feelings are largely irrelevant when discussing taxation and legislation.

and i do get that there is risk there, i geniuinely do and it's why i was largely ambivalent about super for a long time but i was challenged to explain how and how likely these changes would lead to money in super being worse than money outside super and i never really could so if changes do inevitably occur we will see one of 3 scenarios:

- super becomes even more tax advantageous than now (unlikely imo and would be irresponsible of govt)
- gap closes but super remains significantly advantageous tax wise (most probable althogh no one knows to what extent it would occur)
- worst case scenario super is as highly taxed as we are individually outside super, meaning it's still not worse (unlikely too)


and i agree with you completely btw, in no way would i, especially at this stage or any age not extremely close to preservation or pension age, be comfortable having all my eggs in the super basket. no way at all and id never advocate that

 

@sanj I think you missed a point about increasing the taxation in super. Forget contributions and look at the tax on earnings in super and/or tax on withdrawals. Let's say I need a million dollars in super to provide for my income in retirement. If the government increases the tax on earnings in super, the million dollars won't be sufficient. If the government increases the tax on withdrawals, the million dollars won't be sufficient. If the government increases the tax on both, the million dollars definitely won't be sufficient.

That's what I mean when I say I can't trust the government. That doesn't mean that I won't invest in super. I will. But I will also create income streams outside of super just in case. It's basic risk management.

 

Fair point but, as explained in my post above, to me it's not about whether money in super is better than money outside super (they both have merits). Looking at super and trying to plan for retirement, I aim for a certain amount for retirement but future government changes could render that planning invalid. That's why I have a backup plan.

In terms of "money in super being worse than money outside super", like the girl on the Old El Paso ad says: "why not have both?"

 

Thanks for the reassurance, but you have no idea what future changes there could be.

 

like i said, i agree it's important to have streams outside super, we're on the same page there.

as for the increasing tax on earnings, im happy to disagree here as i dont consider taxes on earnings to be a grab on my dollars/capital and especially when the alternative is being taxed at the same rates outside super anywya. so the same investment inside and outsde super would be taxed the same if the govt really ramped up the taxes. ie, i would not be worse off.

 

absolutely, which is why im trying to break things down as opposed to saying something and claiming anything is possible.happy to accept we have different approaches.

 

True but it does mess up and planning for retirement. I calculate I need X based on current rules. In the future, tax rates change and now I need more. The problem is when those changes occur. If they happen next year, that's fine. If they happen in 20 years, when I am closer to retirement, that would present more difficulties in making up the shortfall, because there is less time to contribute the additional funds and there won't necessarily be a surplus to contribute at that time.

I still think that super is a legitimate and tax effective (for now) vehicle for saving for retirement. It's just a matter of understanding the risks and having some funds in super and some funds outside of super, just in case.

 

Absolutely. Besides arent we meant to be aiming big? Id never advocate a retirement strategy predominantly based on beijg able to only access it in my 60s, considering im 34. Im saying super and its benefits are, imo, greatly underutilised and misunderstood in this country snd should be used more. Im not sayjng only that should be used.

Youve got so many asset rich and cash poor boomers out there living comfortable but far from worry free lives when, with no additional debt and just a bit of thought put into it they could see their incomes rise significantly now and potential tax liabilities in the future be either reduced significantly or completely. This is almost entirely due to a lack of understanding