Why do we need to invest for our financial future?

Discussion in 'Investor Psychology & Mindset' started by Eric Wu, 5th Oct, 2016.

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  1. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    But a couple would have amassed more than 75k each in their 15-20yrs of working full time surely???

    Yes the govt will change the rules as often as their underpants and that is the most frustrating part of it - as we want to put money into something with a long term view.

    That doesn't make it a bad investment however and seeing as we have to have it, the arguement is moot. I've taken control of mine and will grow it as the same time as my investment.

    Should the govt get too handsy with mine then I have an out and will take everything out of it bar the minimum and invest it privately.
     
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  2. Phase2

    Phase2 Well-Known Member

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    I believe in the idea of everyone being able to provide for themselves in retirement (with a few exceptions), but the whole concept has been poorly thought out and executed.

    When the SGC was introduced it was a cost burdened on employers (and still is). The govt decided to take their cut too, but if they were serious about people saving for retirement they'd have made contributions tax-free and give people a chance at getting a decent nest-egg. Then instead of paying no tax upon retirement, retirees could withdraw a max% of their super balance and pay tax at the nominal PAYG rate.

    This would have stopped a lot of people drawing out their entire super balance at preservation age and going on their luxury holidays or buying a PPOR and then going on the pension!
    It would also mean that people wouldn't have to wait until a certain age to access their super either, as they're paying tax on their withdrawals each year.

    I think anyone under 40 relying soley on super for retirement is a little naive. The only constant with super is that the rules keep changing. Once you could access super at 55, now it's 60, in another 10-15 years what's to say it's not pushed back to 65? Or the rules about withdrawing super change e.g. everyone has to convert their super balance to an annuity plan in order to access funds at preservation age. It might sound stupid, but it's not like we have the best and brightest representing us in parliament.
     
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  3. Perthguy

    Perthguy Well-Known Member

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    Just looked up my super and I had $39k by 41. I blame that on a misspent youth :p
     
  4. 158

    158 Well-Known Member

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    Problem is too many people have this naivety that Super is rigid and inaccessible. All it is, is another entity that has certain rules and restrictions around age. Really, its no different to being a Director of a company, Trustee of a trust etc. Problem is, too many people choose to let other people manage Super 'because its all just too hard'. Sure the responsibilities are different in nature, and the nature of the entities are different, but only by definition.

    There are ways to extract funds from Superannuation legally before preservation age with minimal to no tax penalty.

    You just need a savvy accountant who knows exactly what they are doing (and a few fundamental factors). That way you can funnel funds into Super at minimal to no tax in, then extract funds with minimal to no tax out.

    pinkboy
     
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  5. Eric Wu

    Eric Wu Well-Known Member Business Member

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    hi @Westminster, I just picked these figures to illustrate the problem. no particular reason. pls feel free to edit them. thanks
     
  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Aren't the numbers important in the context of this conversation?
     
  7. larrylarry

    larrylarry Well-Known Member

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    Same.
     
  8. MTR

    MTR Well-Known Member

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    There are strategies where SMSF will provide great benefits as we are currently finding out from our accountant, still a complicated area and because of the constant changes.