Why do we need to invest for our financial future?

You're saying if the government forces you to spend your own accumulated super money that equates to the government stealing from you? Really?

The point of the tax concessions is to help you save for your retirement. This is why the pension draw-down % rates ramp up as you get older (by age 95 you are forced to withdraw 14% of your super balance). You are not supposed to die with a million bucks in super and live off a part age-pension courtesy of the taxpayer, so you can hand it all down to your heirs tax free etc.

Of course, once you withdraw money from super, nobody is stopping you from investing it in shares and property... you can still die with your million bucks if you want to

 

Sorry to add... otherwise I agree with the sentiments. Can't think of anything worse than standing in line at centrelink having to advise them of every aspect of my finances all the time.

 

This is true but sometimes it is not just about the money. For me, property investing is also about:

1) taking something that is undesirable (run down property) and converting it into something desirable (renovated property)
2) developing new skills by doing work myself (rendering, tiling, demolition, gyprock installation, kitchen installation etc)
3) working in a team with another person to get work done
etc

Of course picking the right properties and undertaking the right level of renovations has increased the value of those properties. So it has been a successful venture so far. My point is there are other priorities apart from simply making money.

Essentially, I "need" to invest because it keeps me occupied and satisfies other desires that I have beyond wealth building.

 

The thing I hate about Super is the 15% tax.
Why tax the mandatory 9.5% government contributions?

 

Why not?

You may not be able to spend it now, but it's income. For most people 15% tax is a bargain.

 

Great post. Some good responses. But when I went to school 85 minus 65 equaled 20.

 

, today must be one of my bad days. thanks @Sonamic. now I will leave it to smart people to correct it.

 

Will maccas soft serve stay at 50c in 30 year's time? My simple pleasure.

 

The government is trying to build a retirement system to sustain the population. Why charge tax on contributions into it. We already pay income tax. This is the only form of investment most apathetic Australians have for their retirement, and we constantly advertise the fact that most Australians they will not have enough for retirement ; but we tax their contributions?

 

You don't have to. It's a choice. All depends on what kind of life you want to live in the short, medium and long term.

 

I gave away my day job about 9 years ago, but never really retired, I continued investing and learning, that is the beauty of investing if you like what you do and you are good at it why stop... you can continue to grow wealth and then teach your children these skills, only if they are interested of course.

I know its cliché but if you love what you do its not a job. However I wont kid myself, it is not without stress.

MTR

 

Sounds like a great system.. I like systems better than goals.

 

One other thing I have worked out is most will never have enough to retire, certainly was my case 9 years ago.

 

It's not income. It's a forced accumulated saving that you can't do anything with until the govt says so. If the govt were serious about people saving for their retirement they'd let people accumulate super tax free, then tax their withdrawals.. but they aren't.. so they won't.. and that would mean changing the rules yet again.

 

What is so frustrating is the rules are changing all the time. I spoke to my SMSF accountant yesterday and she could not give me an answer to my question because the rules are changing once again....

 

I still have over 20 years to go (unless they change the preservation age again!) I have zero faith on being able to access that money and use it however I like.

 

I'm a big believer in Super. I think it's the best solution for practically everyone - an independant retirement is the way to go. So either we retire on investment income, investment income + Super, or all Super. For some it might be early retirement on investment income until Super access age.

There will always be a pension of some sort as there will always be a proportion of society that cannot accumulate enough Super to be self sufficient - at the very least this will be those on a disability payment, carers of disabled people. Anyone who has been a long term recipient of govt payments won't have enough Super as no or little money will have gone in.

For the sums used I have no idea why the the couple have only $100k at age 40 when for the next 25yrs they will be able to amass another $355k. By age 40 I had $150k solely in my Super fund but I might not be the average Joe.

 

There are heaps of perfectly good reasons why someone might not have $150k or even $100k super by age 40. Additionally, the younger the individual the more uncertain the retirement landscape becomes. Ie. my retirement age has changed in my working life & may again.

For many (myself included) Super access is so far away & the rules continually changing, that little faith is held in the ability to access & use those funds without a multitude of rules & regulations. It is for that reason that many turn to personal investments with additional disposable income rather than locking it away into a government controlled framework.

If someone wants to retire by 50 rather than 60, 65 or 70, Super is going to do next to nothing to enable that. Only personally controlled investments will empower financial freedom at a time & means of one's own choosing. It is for this reason that many invest. I view Super as an aged care / assisted living vessel, nothing more, because by the time I get to see it, that's all I'll likely need/want/use it for.

 

I think WM you are anything but average

 

I very much agree with your sentiments @Indifference