Thank Gawd we got our money out of them before they lost a lot of it in the GFC! The AMP charges huge fees for their "services" (dont know about other companies) and we were feeling rather ripped off at the time. Turned out to be a very smart move.

Hope you can access your own money in future folks!

I used to work in the industry and am amazed at Murdoch's report re super.

BP which has one of the biggest super funds in the world and even with the GFC have more funds than they can foresee using.The money belongs to the people who put the money in and are being ripped off by virtually all funds by the way they allocate the money earned.All funds are very solvent,Have to be BY LAW.

If I had $100k in the bank at say 5% the money I earned would be mine less the bank fees and any ATO tax bill.Funny that the super funds don't work that way Just say you have X dollars in units and you only get what the funds say they are worth on the day you take them out.

Such a bloody rip off.

Super contributions get very generous tax treatment as does money earned in the super funds. This is because super is intended to provide a regular retirement income. On retirement currently these funds can be rolled into an allocated pension that receives even more generous tax treatment for the same reason.

As Bill implies, talk to your accountant about your retirement strategy as it's a "minefield" out there. There are conservative options if you don't want to ride the volatility of the share market.

I think the use of the term "frozen" is less than appropriate as it implies no access at all to your money on retirement.

(disclaimer: I'm not a financial adviser and as such I cannot accept responsibility for the accuracy of this post)

-- Edited by jimricho on Monday 7th of November 2011 06:41:10 PM

"Illiquid" is a term that is often used in regard to any investment that can't be sold at short notice. Examples are property wholly owned by the investor, (with or without a partner(s)), unlisted property trusts (depending on the trust), long term fixed deposits, etc.

Liquid assets are those that can be "liquidated" that is sold at short notice, eg shares, listed property trusts, etc. These investments can also be sold in part, ie one doesn't have to sell the whole portfolio of a liquid asset such as shares. If you own an investment property for example you can't sell part of it, you have to put it on the market, wait for a sale and then go through the process of settlement (bleeding obvious I know but I mention it to illustrate an example of an "illiquid" asset.)

I would consider just "cashing out" an entire superannuation investment on retirement to be poor strategy anyway but like all financial decisions it depends on the individual circumstances. This issue is far too complex and beyond the scope of a forum such as this.

Also note that "retrospectivity" (i.e the law that applied at the time of the investment) would most likely apply to all funds invested before any changes were brought in. This is one of the main reasons for the complexity of super rules.

Please note my disclaimer in my previous post.

whiteman wrote:

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We suffered badly in GFC i due to getting out & back in late, consequently have left everything alone this time around with GFC ii, but watched the Insight program on SBS tonight and wonder if we should bail out of super now and go to STRAIGHT CASH........any thoughts &/or advice or is it too late ??

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 IMHO....Investigate going to cash but doing so still within the super environment. As pointed out earlier there are very significant tax advantages in doing so.....whatever you do... get good professional advice....be wary of "snake oil" salesmen however.

(again my previous disclaimer applies)

-- Edited by jimricho on Wednesday 9th of November 2011 06:31:43 AM

Gday...

Again ... get professional advice!

Just because you are retired and over 65 does not necessarily mean you are  unable to invest in a "Super product".

Having all your nest-egg outside of a "superannuation product" has the potential to be fragile - particularly when it is the source of your income.

Get professional advice - even if it is just to talk to the FIS at Centrelink.

cheers

John

Gerty Dancer wrote:

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The big issue with financial advice it that it must be independant. Many so-called "fnancial advisors" work for one of the super companies and will only ever advise you to keep your money with their company.

Centrelink run free seminars for people who are retired or almost retired, well worth it.

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 If you go to a Stockbroker they'll tell you why you should invest in shares. That's what they sell, there's no pretending otherwise and their brokerage fees are quite transparent.

If you go to a real estate agent they will tell you why you should invest in property for the same reason, again no pretence and it's the vendor who pays the commission which is also quite transparent.

You would expect that the name "financial adviser" would imply independent unbiased advice covering all classes of investments....But...as pointed out they are mostly just agents for managed funds (including super) and that's what they'll try to sell you. Their commissions are often anything but transparent, especially trailing commissions.

I've seen Centrelink recommended by a number of members of this forum in this and in other threads.

-- Edited by jimricho on Wednesday 9th of November 2011 06:09:08 PM

There seems to be a lot of confusion as to what superannuation actually is. As jimricho says, it is a tax efficient vehicle for saving for your retirement. The actual assets invested in can vary from Australian or overseas shares, bonds, commercial or private property, 'cash' in the form of bank deposits, even stuff such as artworks or rare coins. It isn't true, as many people seem to believe, that investing in superannuation means investing in the sharemarket. Most publicly available superannuation funds will offer different investment options with different risk profiles - you can choose the option with the amount of risk you are prepared to live with, which could well change as you get older and closer to retirement. Don't just take your money out of a superannuation fund without first understanding what other options you have, either within that same fund or by moving to another fund that may have a more appropriate risk profile for you. Get advice, get advice, think about all your options, get advice.

beiffe wrote:

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----SNIP-----
I might not have a lot but it has worked for me and I don't pay tax. ---SNIP---
Regards
Brian

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 Gday...

I do NOT want to know your financial position etc ... but funds greater than $100,000 invested in "fixed term"  and/or "ready access" as a simple bank deposit outside of a "tax-advantaged or superannuation vehicle" @ 6% or higher will return an amount that would equal or exceed the tax threshold (currently $6,000) and therefore attract tax. That of course wil reduce the earnings and reduce the growth of the investment.

Just a comment ... I am not looking for a reply on your personal position.

Cheers

John

All I know is I made money and paid no tax.

Not a lot but enough to keep away from the kids and enjoy the time and money I have left.

Intend to leave nothing but bills and that's why I got the new bus and fitting it out how I want. No need tyo give it to the useless government when I can have fun spending it.

Too many want to die the richest person in the cemetery. I want to go in sliding sideways, yelling yippee and stone broke.

Besides those stupid pollies just started me on the payroll so might have to spend more HAHA. Got my first cheque today (I Hope)

Regards
Brian

I'm not saying that anyone here doesn't completely understand their position, but I have heard others say that they don't pay tax, when the reality is that their tax bill is offset by the franking credits provided by their investments, which means that they have no extra net tax to pay at financial year end.

Franking credits apply to shares and are credits for tax already paid by the company in which the shares are held before the after-tax dividend is passed onto the shareholder. The shareholder then pays tax on the "grossed up" value of the dividend ie the dividend plus the credit. Higher income earners thus get to pay more tax as they are taxed at a higher rate. The subject of franking credits (aka "dividend imputation") can get complex and beyond the scope of this forum.

As the current company tax rate is 30% and money earned by a super fund member who is still in the accumulation phase (ie, still working and contributing) is taxed at 15% the contributor will benefit from the credits.

If the fund is in the "pension" phase, that is the member has retired and now drawing down on the fund, the member will get all the benefits of the credits as all money earned is now tax-free.

If you don't understand it, as Nicholstones says....get advice, get advice, get advice!!!