Super for Lazy People - how to grow it if you don't want to SMSF

Discussion in 'Other Asset Classes' started by sash, 7th Jan, 2018.

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  1. sash

    sash Well-Known Member

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    On the back of the below thread...which had some brilliant input from likes of @SatayKing @oracle @TAJ @Nodrog and other..thread. The below thread was primarily for growing a passive income outside of Super as you can only access this at 60. The discussion has been brilliant hopefully we have the same discussion here. Note that this is not advice just a discussion to be a more informed investor.

    Ideal Passive Income Portfolio for Retirement - advice from forum experts

    The purpose of this thread is to how to grow your super if you don't want to SMSF but want to do the get good growth, topics covered include:

    1. Using Super funds to emulate SMSF - such as Australian Super where you can buy select shares and ETFs
    2. Discuss Funds which have performed over the longer term and can be set and forget.
    3. Other opportunities to turbo charge your super.
    4. What are some of the Best Master/Umbrella funds with the lowest fees to run these set and forget investments through?

    My portfolio currently consists of an AMP unbrella fund and Australia Super:

    1. AMP - I have put all my fund into the Perpetual Industrial Fund. Considering diversifying to Platinum International Fund. What are people thoughts on other longer terms funds which offer growth and can be set and leave?

    2. Australian Super - using this like a pseudo SMSF thought I do use their Diversified and High Growth Fund. Also bought bank, retail, and insurance shares. Thinking buying ETFs

    Your thoughts and discussions on this would be appreciated.

    I am quite lazy so want to put into a set and forget investment which will grow over the longer term.
    Would also like people's opinions of Master funds like Australian Super, AMP Custome Super, CBA Fund, etc.
     
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  2. sash

    sash Well-Known Member

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    Forgot to add there is about 225k in AusSuper and about 365k odd in AMP Custom Super

    Adding about $21.3k to Super net of contribution tax so that would add another 100 odd in the next 5 years.

    Hoping with some growth (5-7%) per annum compounded...I am at about 800k in Super at 55.

    The over the next 5 years with no contributions hope to be at $1m. That would not include up to 300k (I believe this is correct) which I can contribute (this is post tax money). I might still contribute 25k per annum post 55 but I would be getting pretty close to the $1.6m cap...if things grow to fast. :D

     
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  3. Nodrog

    Nodrog Well-Known Member

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    Not sure how this thread will go as those with more wealth, which appears to be the category you’re in, tend to favour SMSFs. And for good reason. Hence we don’t tend to follow Industry / Retail Funds much and therefore know less about them.

    Might as well add my comment from the other thread:
    I like to look at what the Super system can do for us given our circumstances and a certain level of wealth. Then decide which Setup will allow us to take best advantage of the system. Industry / Retail Funds are hamstrung somewhat by their structure making it difficult for them to take full advantage of the rules.

    As for paperwork most or all of that can be outsourced.

    But I’m sure there are plenty here that can add a lot.

    Not advice as usual. Plus my understanding may be inaccurate given I don’t follow Industry / Retail Funds much. So DYOR.
     
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  4. pwnitat0r

    pwnitat0r Well-Known Member

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    If paperwork is your only issue for SMSF, as @Nodrog said this can be outsourced.... $2-3k a year should be plenty IMO.

    When you consider you're probably paying $6k+ a year in management fees at 1%+ you've just halved your costs (assuming you want to invest in LICs or ETFs where the management fee is less than 0.5%) and can invest in anything you want within reason.

    I got my financial report, tax lodged and accounts audited and any miscellaneous paperwork that needed to be done throughout the year last financial year for $2,310.
     
  5. sash

    sash Well-Known Member

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    i could do that via a industry fund and invest in in ETFs. no paperwork.
    as you can see i am lazu. the only thing is the tax from moving to a pension fund which Nodrog highlighted. Checking that out
     
  6. TreeChange@50

    [email protected] Well-Known Member

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    Another good thread. Have just been through the exercise of looking at the Aus Super past performance. We have majority with them, and their Balanced option net returns are actually pretty decent (to my eyes anyway). Mgmt fee of 0.75% not too bad. I've only fiddled with our option twice and went conservative both times. Missed half of the Trump upswing, and part of the recovery from GFC. Resolved to listen to less mainstream press, leave in Balanced and learn a lot more before I fiddle any further. Started looking further into this again, and shares in general after reading a couple of @petewargent books. I didnt realise you could be as active as you suggest with Aus Super.
     
    Last edited: 7th Jan, 2018
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  7. Redwing

    Redwing Well-Known Member

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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    We've got a not too shabby amount split between CBus (3/5 default, 1/5 high growth) and 1/5 Sunsuper.

    Returns are definitely up there according to super ratings. Fees are very reasonable.

    I've been with several retail funds previously so have steered clear of these now for the last 10+ years due to abysmal returns and high fees.
     
  9. Hodor

    Hodor Well-Known Member

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    You can be very lazy with SunSuper and selecting individual asset classes which are essentially ETFs of the same flavours (Aus, International, Emerging markets, etc) starting at 0.09% MERs. Much cheaper than pre-mixed options (growth, balanced, etc). With SunSuper there is an Australian shares actively managed option too, at 0.2% MER it is similar to a nice conservative LIC (more like an unlisted fund as it always trades at NTA). There is an underlying account fee which is very cheap, I can't remember now.

    You set the allocations you want and can forget about it for as long as you want.

    Allocations can be set in two ways, automatically re-balance to maintain asset allocations or new funds allocated in the desired way.

    If you don't want to deal with an SMSF it offers some of the flexibility yet you don't need to periodically actually purchase any shares like the Pseudo SMSF options and the fees are more reasonable.

    You can do similar with AustralianSuper too I believe.
     
  10. Nodrog

    Nodrog Well-Known Member

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    Do check the fine print with these funds to determine if Share purchase plans / Rights Issues / DRP etc can be taken advantage of. And limits per holding as well as selection etc. Eg Small / mid Cap selection was be light on or non existent. Cash options can be pretty ordinary also.

    But in the end simplicity and peace of mind may be paramount and hence some scarafices potentially made financially for that end.
     
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  11. Journeyman

    Journeyman Well-Known Member

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    I use First State Super for insurances etc.... But we have gone with an SMSF. We sacrifice up to the caps. The farm we live on is an SMSF asset. It will be paid off within 3 years.
    i tried controlling the industry fund, but found the level of control and the returns lacklustre.
     
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  12. SatayKing

    SatayKing Well-Known Member

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    @sash, as others have indicated setting up an SMSF can be a right proper pain initially; trust deeds, PDS, Corporate Trustee - which I think is a darn good idea. Not pushing or selling anything as it's up to each to decide.

    Once set up, I haven't found the task onerous. In my case, tor the current financial year the number of transactions total 51. No a huge workload since all details are received electronically and I've gone digital. Ask @Nodrog about that because he made me do it he he.

    It's the end of year crap which is a task but frankly, I hand the lot over to the accountant and they crunch the numbers, get it audited and prepare the minutes. That's what I pay them to do. I do laugh when I glance at the minutes as I am a single member fund and most of the correspondence is:

    Dear SK,

    Blah, Blah, Blah.

    Please contact me if you have any questions.

    Yours sincerely

    SK

    So I give myself a jolly good talking to.

    I haven't taken much notice of the cost but last year all up it was close to $4k. Sure it may seem a lot and probably can be done at a lesser price but, heck, I'm happy to get it done by professionals rather than do it myself. Worth the pennies involved.
     
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  13. sash

    sash Well-Known Member

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    ta satay king.

    are you indonesian by any chance ....just lookin' at you handle...:D


    by the way i luv satay with the peanut sauce.
     
  14. SatayKing

    SatayKing Well-Known Member

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    Have been as about my handle before. I'm as white as they come. Satay King Prawns. And I'm allergic to them. Go figure.

    Two more items:

    It may be necessary occasionally to get a Variation of the Trust Deed and even the PDS as legislation changes. I initiated a variation to both last year.

    Also, I understand a Binding or Non-Binding Death Benefits Nomination does not lapse provided the Trust Deed allows it and the wording of the Nomination is correct. For industry and retail funds, I've been told a Death Benefit Nomination lapses after three years.
     
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  15. The Falcon

    The Falcon Well-Known Member

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    Mate can you expand on this, keen to get @SatayKing input as well.

    Putting aside cost / performance and looking solely at the structural advantages that SMSF has that you are able to exploit.
     
  16. The Falcon

    The Falcon Well-Known Member

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    On super funds (non SMSF) industry funds are a no brainer for mine, fees typically half or less what you will find with banks and other instos.

    If you are ever going to use active management an industry super fund is the place to do it. Take a look at the likes of Australiansuper. Their long term performance running huge FUM is very impressive. Given their scale they are able to ;

    - access best of breed active managers at a fraction of the cost that an individual or SMSF could.
    - make direct investments in major infrastructure / VC something not available to SMSF or individuals.

    And the tax rate for discounted CG is 10% which largely negates the turnover issue which is a killer for many active strategies outside of super. Bear in mix. Performance is quoted net of fees AND tax (that means after).

    Personally I use them in a 3 fund (Oz/Int’l/fixed) but I am learning towards letting them run with a growth
    option and just forgetting about it. While the fees are more expensive than Index or LIC you are getting exposures that you would not be able to replicate on your own and they have shown the ability to produce alpha over the long term. This is also a hedge against self ;)
     
    Last edited: 7th Jan, 2018
  17. SatayKing

    SatayKing Well-Known Member

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    I should say, I have no issues with industry funds. They do seem from what I have read attempting to bring the products they have into an environment to provide more flexibility for their members. I suppose retail funds are probably trying to do the same but, again from what I have read, the fees are on the high side even for their default products.

    Aside from question of fees, there have been concerns I believe with the Total and Permanent Disability Insurance which includes death benefits. Outdated medical definitions, relatively high cost despite bulk discounts, tardiness in payouts, etc.

    In SMSF's the Trustee is required to give consideration to insurance as well and probably expert advice from a professional is desirable.

    If I bother to read the 80 pages of financial reports and minutes, which I rarely do much to my embarrasement, this aspect is one I ignore. Mainly because when I'm dead I wont care plus my naive view is I "hope" - and at this point professionals will throw up their collective hands in horror - to access the NDIS, Medicare and, again hopefully, private health insurance (hospital cover only.)
     
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  18. SatayKing

    SatayKing Well-Known Member

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    Quick and random thoughts.

    Does anyone know how industry funds dealt with the CGT relief as a result of super changes effective from 1 July?

    I had heaps in the SMSF as a result of a goodly proportion having to commute back to accumulation phase. Reset the cost base but if I decide to sell, unlikely, I have to wait until next financial year if I wish to avail the fund of the 50% discount.

    One weird thing with these changes is for those in both pension and accumulation modes, the money isn't locked away. If you're over 60, it's still tax free in your hands as a lump sum withdrawl. The fund however has to apportion the lump sum between the tax free and tax-taxable components or untaxed if it applies. Crazy stuff.

    DIslike these tablets so much. Stupid things.
     
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  19. Nodrog

    Nodrog Well-Known Member

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    As usual it depends on one’s circumstances.

    As mentioned earlier there’s the avoidance of CGT when commencing a Pension.

    Ability to run multiple pensions.

    In years where one want’s to minimise CGT one can use the double dip strategy to bring forward the next FY Concess Cont.

    There’s numerous other strategies available depending on one’s circumstances and expertise of the advisor.

    But I’m tailoring my posts for @sash who I think is around 50 and looking to retire soon. At your age anything could happen. Retail / Industry Funds are working hard to discourage members with larger balances from moving to SMSFs. That combined with CIPR will likely result in much improved products by the time you can access Super. Union dominated Industry Funds have for a long time been pressuring the Labor Gov’t to remove the CGT advantage that SMSFs have when commencing pensions.

    The writing is on the wall in that it is going to get harder and harder to get money into Super. And SMSF’s generally need a sizable balance to make it worthwhile. Those closer to preservation age now are likely to still benefit from a SMSF given enough wealth but further out I’m not as confident.
     
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  20. sash

    sash Well-Known Member

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    Amigos....

    Firstly thanks for all the input @SatayKing @Il Falco @Nodrog @Redwing ..

    I just did some research and found that Hostplus gives a lot of flexilbility of SMSF without all what I call hassles that is why they call me "Obi Lazy-One" definitely not a Jedi...to much hard work.

    For those who are interested it allows people to choose between select Managed Funds, ETFs, key LICs, as well the Hostplus funds. See here

    Hostplus - Investment Options - SMSF

    I am going to some more research and will look to potentially move my Australian Super fund there initially....
     
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