superannuation

[GreenHaven]

yeh we went through all those awsome details (like how long do you want off work if your partner dies errrrr ) its costing i think it was between 150 and 160 a month for both me and my partner covered for lose of income if we get injured and cant work or if either of us die our morgage is paid off ,seperate policies though as i can claim more than her and all that jazz

[GreenHaven]

plus i always keep more than 10 thou in the bizz account because yeh as you said it takes time for the payments to start and its more expensive if you want the payments to start stright away or in a month or 2. the main reason i wanted the income insurance is if anything happened to me i wanted my partner to be looked after. if i broke my leg i could always sell my buisness and become a telemarketer haha

[PaulG]

Looking at my superannuation accounts tonight. I still have multiple from various jobs I've worked over the years. The nursery where I'm doing a couple of days a week at the moment is needing me to fill out forms for them. I have details and account info at hand for "Australian Super" which I could give them.

Who is using what super-funds and how do you rate it?

[seliment]

Looking at my superannuation accounts tonight. I still have multiple from various jobs I've worked over the years. The nursery where I'm doing a couple of days a week at the moment is needing me to fill out forms for them. I have details and account info at hand for "Australian Super" which I could give them.

Who is using what super-funds and how do you rate it?

Had some dealings with Aust Super couple of years ago and they were a pia in processing an exit rollover to our own smsf. Fundamentally they took an inordinately long time which caused us to have additional accounting costs for our smsf.

Good idea to merge small super balances to reduce fees.
If you have larger balances, can be good to have it spread between a couple of funds so they are exposed to different managers (who probably perform differently).
Also look at what 'investment options / strategies' they offer -- which affects the volatility/return/risk profile.

Just watch the fees, especially the case when fund is run by one of the 'big businesses' as opposed to the 'industry funds'.

Joe

[Lawn Mowing Professionals]

They are like banks... working in there best interest, not yours.

Personally, I won't be counting on Super to fund my retirement.

You might as well consolidate to just 1 account, otherwise you will be paying "account keeping" and "managment" fee's and other fee's on those fee's for each account.

If you got a fair bit of cash built up... maybe consider a self managed super fund and just put it in blue chip investment companies (maybe property based or supermarkets etc) for the long haul as the population is increasing and housing is becoming scarce in alot of regional and capital cities. That's the safe way anyways.

I don't like it as you have very little control over the market, inside trading and corruption etc... i like being in control with money.

Simmo.

[seliment]

They are like banks... working in there best interest, not yours.

Personally, I won't be counting on Super to fund my retirement.....

If you got a fair bit of cash built up... maybe consider a self managed super fund ......

The 'experts' say you need min of $300k to make it worthwhile to run your own smsf unless you have special circumstances like business real estate etc.
Our experience is that costs $1-2k to setup a smsf (trust deed, Corp trustee etc etc) and annual accounting/audit and govt charges run at about $2.5-3k pa (and is with no adviser fees/charges/commissions).

Contrary to Simmo's opinion, super is as good (or better) way to fund ones retirement.
Super should not been seen as a way one to save for ones retirement, but should be seen as a Tax Effective way of investing what you are setting aside for your retirement (as in general it has much lower tax rates than what most people will pay on returns from investments outside the super system.
If managed in the right way/timing, some gains can be completely tax free).

Joe

[ian]

until we reach retirement age and the government decides it needs more money and starts taxing it even higher

[RSM-Gazza]

until we reach retirement age and the government decides it needs more money and starts taxing it even higher

Can see them raising the no tax after 60yrs of age to 65.
I've already given a large amount of tax when I drew out my non preserved to pay my house off when I left my fluorescent light career. Another slug of waiting a further 5yrs will p1ss many off if predictions are accurate.

[Mrs HMS]

The 'experts' say you need min of $300k to make it worthwhile to run your own smsf unless you have special circumstances like business real estate etc.
Our experience is that costs $1-2k to setup a smsf (trust deed, Corp trustee etc etc) and annual accounting/audit and govt charges run at about $2.5-3k pa (and is with no adviser fees/charges/commissions).

Contrary to Simmo's opinion, super is as good (or better) way to fund ones retirement.
Super should not been seen as a way one to save for ones retirement, but should be seen as a Tax Effective way of investing what you are setting aside for your retirement (as in general it has much lower tax rates than what most people will pay on returns from investments outside the super system.
If managed in the right way/timing, some gains can be completely tax free).

Joe

Excellent comments Joe. Investing outside of super will not provide you with tax free lump sums or investment earnings after age 60 like superannuation can. It is structured to be tax advantaged for a reason!

Simmo be careful you don't provide financial advice without a license there

On the SMSF front, we ARE specialists there and the reason the magic $300K is bandied about is that the fees you pay for a managed super vs a SMSF actually break even at that point and there is a huge responsibility on the trustees or there can be significant consequences for non-compliance. Not something you should just jump in to without seeking specialist advice (and not just a garden variety financial adviser or accountant but one who is a member of the SPAA http://www.spaa.asn.au/)

I am not going to wade in here any futher other than to say that Joe has summed it up nicely, people know what I do for a living (my profile tells you) and I don't want to push my opinions here any more that that.

[PaulG]

Good to get a bit of chat going in this topic again. For now I've gone with the nursery's nominated superfund which is SunSuper which I rediscovered (with a phone call) I am still a member of and actually have life insurance and TPD insurance as part of my policy.

Has spurred me into action too to consolidate my various smaller accounts (like Australian Super) and start trying to make some regular contributions myself.

[ian]

Excellent comments Joe. Investing outside of super will not provide you with tax free lump sums or investment earnings after age 60 like superannuation can. It is structured to be tax advantaged for a reason!

true but i think if you have a choice between investing in super and paying down debt then i think paying down the debt before investing in super is the choice i would make, then maybe invest the money i save on interest payments into super but then I would also suggest you read my sig.line

[Lawn Mowing Professionals]

Not providing any financial advice there Joanne... It's simply my opinion.

I'm curious about your advice though... [B]Investing outside of super will not provide you with tax free lump sums or investment earnings after age 60 like superannuation can.

Do you know of hand what the highest return and average return on a superfund Per Annum for a mainline superfund like Sun super or Aust Super etc or even over a 5 year period if that's how they compare? (not sure the time line of how they compare between different funds - 1,3,5,10 years etc)?

I personally would have thought real estate would offer a better return on investment for a $300,000 example... with real estate you recieve the passive income (rent) and capital growth.... i was also under the impression that alot of superfunds invest heavily in real estate... is this of any truth?

Simmo.
Simmo.

[ian]

Not providing any financial advice there Joanne... It's simply my opinion.

I'm curious about your advice though... [B]Investing outside of super will not provide you with tax free lump sums or investment earnings after age 60 like superannuation can.

Do you know of hand what the highest return and average return on a superfund Per Annum for a mainline superfund like Sun super or Aust Super etc or even over a 5 year period if that's how they compare? (not sure the time line of how they compare between different funds - 1,3,5,10 years etc)?

I personally would have thought real estate would offer a better return on investment for a $300,000 example... with real estate you recieve the passive income (rent) and capital growth.... i was also under the impression that alot of superfunds invest heavily in real estate... is this of any truth?

Simmo.
Simmo.

but it's not tax free unless you're investing in the family home then there is no rental income

[Lawn Mowing Professionals]

but it's not tax free unless you're investing in the family home then there is no rental income

You missed the "OR"



Simmo.

[Mrs HMS]

If you’re aged 60 and retired, you can receive your superannuation benefits tax-free — as a lump sum or as a superannuation pension (also known as income streams, account based pensions or allocated pensions). After age 60 (retired or not) income earned by the funds invested with superannuation are also tax free. (slightly different rules apply to public service supers which are usually untaxed until retirement)

Money invested in to superannuation is concessionally taxed at 15% instead of at your (usually higher) marginal tax rate. As self-employed people, contributions you make to superannuation as "concessional" contributions are tax deductible.

Ian you can certainly retire debt but then you run the risk of not being able to put sufficient aside to fund retirement because you run in to trouble with contributions caps (the maximum you can contribute in any given year...go over it that amount gets taxed at the highest marginal tax rate). Often people make the mistake of retiring debt but once that's done are hamstrung by the time left until retirement and the annual contribution caps.

Good financial advice from an adviser or accountant (reminder that accountants are not legally allowed to provide financial advice unless separately licensed to do so) can work out what the best course of action for your age, stage and personal situation is.

If you invest outside of superannuation in to say, property you get passive income...so long as you have tenants paying rent. If you don't have tennants for a period, no income is generated but the associated costs still continue. If you have the cash flow to cover that it may not be a problem. Assuming the property has tax deductible debt (mortgage) when interest rates rise it may not be possible to up the rental income to compensate for the higher costs. As you (and the property) gets older who will worry about ongoing property maintenance or will that be an added expense that will eat in to your rental income? The income generated continues to be taxable, no matter what your age.

There are so many factors that you have to consider and each individual's situation will put a different slant on what is the best course of action. There is rarely a one-size fits all solution.

Simmo I cannot answer that question for the simple reason that I don't know what I am comparing. To say what is the average return for Australian Super doesn't have a single answer. That depends entirely upon what the investment options are, cash, fixed interest (domestic or international or both), domestic or international shares (or both), term deposits, listed property trusts (domestic/international/both), single manager funds, multi-manager funds and any permutation or combination of any or all of those options.

(Besides which, that sort analysis is what I charge my clients for and it is extensive and time consuming to do correctly)

Australian Super, SunSuper, QSuper, Hostplus, CBus, MLC, AMP, AXA, BT, IOOF are just the managers of the vehicle which holds the individual investments, not the fund which returned X percent last year or over the last 5 years.

Past performance is also no indication of future performance. Just look what happened in the US property market...the bubble...now real estate investments are worth a fraction of what they were just 7 years ago (which is what the financial sector calls a long term investment, terms which usually apply to property and shares) and are virtually unsellable in many instances.

There is no magic investment. What the GFC reminded the industry and the public is that unless it's sitting in cash, guaranteed by the government, all investments are volatile, some more so than others. The higher the return the higher the risk. It's just a matter of how much risk each individual is prepared to take and still be able to sleep at night.