As an up and coming nomad with 20 odd years of working life still in me, i was wondering if all this talk of super does actually benefit you when retirement comes round.
The only people you ever hear talk it up is those selling something.
Im not after figures or alternative investment strategies just some info on the outcome, was it all it cracked up to be and to compare with thise who opted for, say SMSF or the like.
TIA.
Kezngaz.
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Commitment shows. Quality is what is done when no one is looking.
15 years ago we had our house paid off and started pumping money into super through salary sacrifice. Retired at 60 and am now a self funded retiree for the last 3 years, and all is going well so far. Tried a SMSF for a while, but pulled out - I now let people who know much more than me look after my money.
Only time will tell if I have done the right thing. At the moment my super fund is earning 7% so we are able to live on interest only without touching the capital but my crystal ball is broke so I do not know what will happen in the future.
The advantage of super is that money can be put in with tax savings, then taken out as an income stream without paying tax.
I was in super all my life , Retired at 55 , Still own our home enjoying the dream , Once you own your home sink all you can in super . There are lot of unhappy people out there who spent every last cent while work , And now living hard sold there home to buy a rig and living from free camp to free camp .
I have been retired for 6 years and living off my super. I'm not rich but not living under a bridge. Mmmmmm, a couple of times I have been near a bridge though but in my van.
I do similar to what Brickies has said and no way known to man kind is it "hard" ( Uncle Mal has finally started to read all my paperwork though.) well the ground under the van might be. Most people I come across that have done similar are happy with their choice and only a few live pension to pension but wouldn't say they are doing it hard. Some might be though.
As long as you are happy with what you are doing and how you do it, all's good.
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I have been paying into super since starting working in Elect supply industry in 1980 the first 20 years I thought sheesh it's not going too well . Then I found the money in super started WORKING for itself . I was putting the max of 9% in plus what employer put in when it became compulsory. What also helped me in the last few years as I was retiring at 62 . I salary sacrificed 50k or so the last few years so I paid less tax plus when on pension mode it became tax free. The rules have changed a little since then . But it's mainly when you have "millions" in super. Can't have working man better off than a poly !! The MAIN thing is you try to something to get some sort of capital gains . Or keep working till you drop !!
I started saving for retirement at age 20 - In those days pensions were means tested age 65 to 70, after 70 there was no means test applicable. Over the ensuing 50+ years there has been more amendments to pensions than the Pope has frocks.
Then compulsory super came in in the late 80's - more money for the financial institutions (those that don't go belly up) and more money for the Union bosses to play with.
It appears that those that were wise like in the story of the "Grasshopper and the Ant" - the Ants horde is diminished by the Grasshoppers.
Similarly self funded retirees receive no benefits whilst the wastrels receive the bounty of free health care, subsidised rental, Rate subsidies, telephone subsidies, free registration for motor vehicles, etc.
To answer OP - No! - putting money into Super is a bad idea - better off spending and enjoying it.
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Possum; AKA:- Ali El-Aziz Mohamed Gundawiathan
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I worked in the UK for Royal Mail for four years between 1993 and 1997. I returned to Australia and worked for the Qld Govt for thirteen years. Qld govt was 12.5% not the standard 9%
I got more from my four years of super in the UK than the 13 here.
GFC apart once your money goes into your fund why should you lose. Isn't that money SAFELY banked.
No wonder so many are turning to being self funded retirees.
Before the early 1990's the only people who were able to have employer funded superannuation were mainly government employees. If you were a public servant or in the military you had it, whether you wanted it or not. It was a condition of your employment. If you remained in that employment then you had no need for an aged pension as you were funded courtesy of the government and your own contributions.
Those who were not employed by the government missed out on this benefit until the early 1990's when it was introduced by the Labor Government for all employees.
I cannot accept that people who were not part of the scheme were wastrels. Self funded retirees obtained a massive tax deduction as they were only taxed at the rate of 15% for their contributions instead of over 40% if the money had not been used as a super deposit. It was then able to be withdrawn with zero tax implications upon retirement.
Those that like to bang on about being self funded are in reality, funded by the taxpayer, much the same as those that receive an aged pension. It was just that they they got their tax break before the pensioner got theirs.
I have always thought that talking about superannuation is about as crass and boring as talking about how much your house is worth or how smart your children and grandchildren are.
In relation to the question posed, superannuation is ok if you manage it yourself.
DMaxer.....how I dislike agreeing with your comments 100%......spot on..and very fair......just don't be right toooooo often mate.....or my jousting sticks will have to retire to the pool room.....!.Hoo Roo
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'You are loved when you are born...you will be loved when you die....In between, You have to manage!'....
Church Sign: 'Where will you be sitting in Eternity?..smoking, or non-smoking?....
We had the opertunity between 2 or 9% could be higher but it wasn't a tax deduction . In my case it gave me the opportunity to work OT longer hours . We still paid tax !! It's the people who have done nothing and complain now !! Checked the rent in cities ? $500 a week ! Pension comes no where near that !!
Thank you Goldie for your kind words.I do not begrudge anyone who has had the opportunity to secure their finances for retirement and taken that opportunity. I do dislike those who have been nursed by the government through their working life in receiving a benefit that was not available to others, only to start moralising and talking down others that did not have that opportunity offered to them.
Those that come in to the workforce post 1992 will have a secure retirement provided they stay in full time employment during their working life. Those that do not fall in to this category and are entitled to receive an aged pension after years of working in an era when employers did not have to contribute should all be afforded the same respect. After all, it was their taxes that provided the contribution to the government to pay the government employees. Have a look at the Futures Fund set up about ten years ago. There is over 100 billion dollars sitting there, for one purpose only. To meet the future liability of superannuation for public servants.
Imagine if all these moralisers had to meet their own retirement without the contribution from the government. We would not have a deficit.
I am self funded , we own our home , have set our selves up with a new rig , and can live reasonably comfortably by drawing on our super as an allocated pension all because we both paid into industry super funds for the last 35 years. Although retired I have another 6 years to go before reaching the pension age so we are intending to enjoy the fruits of our labour while we are still reasonably young and in good enough health to do so. Whether you decide to spend your hard earned $ by investing in super , investing in property or just leaving it in the bank is entirely up to you - my advice would be to see a reputable financial planner and at least come up with some sort of a plan - 20 years will go quicker than you think. There are many different ways to achieve your goals but the sooner you start the more likely you are that you are going to achieve them.
Good luck BB
Dmaxer, I began my working life at the end of the 60s and I have never had a government job or been in the military. Most of the big industries around here paid superannuation as part of your earnings entitlement even back then - it became compulsory in the 90s for all employers to do the same. I agree that as our big manufacturing industries continue to disappear so does the opportunity for people to stay in long term employment - gone are the days where you could work all your life in the one place.
-- Edited by The Belmont Bear on Monday 19th of June 2017 09:22:05 AM
I agree BB. BHP and the like looked after the employees pretty well. It was the average Joe working in smaller industries or were self employed that missed out.
It was also a different era. A working man with children didn't have too many readies to put away for retirement. They were flat out keeping a roof over the family's head and putting something on the table to eat.
I don't begrudge anyone who has a comfortable retirement. However, I don't like people who bash aged pensioners when they don't know their circumstances.
By the late 80's when it became compulsory, hub was out of workforce due to work-caused disability. I was a stay-at-home mum/carer, so we have no super. We scrimped & saved, living in rental properties, while our kids grew up. Then, when the last one left, we scrimped & saved to buy an old bus, threw a bed, sink (no water) and cupboards in, and hit the road. We live on pensions, and do ok. We'll never be rich, but we're living the life we want. We watch what we spend, but even if we had super, we'd probably do that, out of habit.
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The Mobile Madhouse: me (Rosie), him (Troy), a kelpie, a kelpie-dingo, a husky & a rainbow lorikeet.
Rosie & Troy, I respect and salute you....you are the real deal...the backbone of being a true Australian...IMO....
Those Self Funded Retirees who declare themselves as such, when they meet you at Happy Hour etc, and at the same time give the Dick Emery Village Vicar, tight lipped, toothy grin, and expectantly look at you, to give the same peer group bucky grin in return, like some sort of Lodge secret handshake......make my skin crawl.......it is unnecessary and totally irrelevant, unless talking to one's Accountant or Bank Manager...
When you get to our age with maybe another worthwhile/active 10 years...which is 3656 days including holidays and leap years......I'm far more interested in a 'Self Funded Health Lifestyle'.......unless you've got asbestos underdaks you can't take your excess wealth with you...death and nudist beaches I find are the great leveller's in life........ ..Hoo Roo
-- Edited by Goldfinger on Monday 19th of June 2017 06:09:28 PM
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'You are loved when you are born...you will be loved when you die....In between, You have to manage!'....
Church Sign: 'Where will you be sitting in Eternity?..smoking, or non-smoking?....
Regarding superannuation...my view is that it does give you more options if you pay into it when you are younger, because when you get around 60 (your super access age) you can retire if you have enough money in super rather than wait until 67 which is the current OAP eligibility age. Some like to spend their money as they go, which is fine. Me, I am saving so I can leave work when I want(my preservation age is 59) it is just if you leave before 60 more tax is paid on the income derived from payments from superannuation. I intend to access my super through an allocated pension after 60.
Whether you self fund or not right through retirement is up to the individuals involved, but these days the government is making it very difficult to allow anybody the ability to accumulate enough to last forever when retired. Most of my generation will have to rely on a part OAP at least and frankly with the benefits attached it is an attractive plan in my eyes. Currently in the situation of low interest rates the OAP pension payment is about the equivalent of having about 1.2 mill in super invested.(not many PAYE workers will ever save this amount anyway) I also believe you need to retire without debt if possible...including owning your own home, not mandatory but does make financial life much easier.
As an example assuming both are married , if you have two workers, Bill and Fred who earned the same amount through their working lives but Fred spent his money on overseas travel, meals out, newer cars etc, Bill saved his money in Super and led a more frugal lifestyle and arrived at pension age with about 350k and 850k in assets including super but not their homes value.....Fred will be welcomed into the bosom of Centrelink and would qualify for full aged pension. Bill on the other hand would be told to go away and don't come back as you have too much money...maybe a seniors card for him as a token. (Totally unfair in my view as both paid same taxes etc) The point being if Bill chose too he could leave work earlier, enjoying his latter years...maybe go away in his caravan etc while Fred had to work on. Apart from the wrongs and the rights this is basically how the systems are set up nowadays from my interpretations.
Cheers AL
-- Edited by sandgrooper1 on Thursday 22nd of June 2017 02:27:43 PM
Thank you all for your contributions!!!!!
Plenty of info there to go off for now.
Me and my partner both pay into super atm and are looking to have a joint account by the end of the year.
Thank you once again.
Kezngaz.
__________________
Commitment shows. Quality is what is done when no one is looking.
If I ever put down people on Centrelink! Or pensions . It's NOT the old age people I'm talking about !! Budget and lifestyle ? It's a personal thing . But as said from 50 to 60 your leaving things a little late . Have friends who have earned more than us and just didn't put anything away for future . Doing things tuff now . Going to club every second night in past etc . Grey nomad is not their thing ! But hey each to their own . Thing is find a solution or lifestyle that suits . I've had just as many say they are pensioner as much as self funded . It doesn't matter . We are a live and living !! That matters !
As an up and coming nomad with 20 odd years of working life still in me, i was wondering if all this talk of super does actually benefit you when retirement comes round.
The only people you ever hear talk it up is those selling something.
Im not after figures or alternative investment strategies just some info on the outcome, was it all it cracked up to be and to compare with thise who opted for, say SMSF or the like.
TIA.
Kezngaz.
If you are already in an "industry" super fund it might help at the end.
I would suggest you start looking at starting a second super fund/self managed one via some of the rupturable companies that assist with these. You don't need lots to start with.
Note you still have 20 years to go. A self managed form of super will build faster than any industry one.
As an up and coming nomad with 20 odd years of working life still in me, i was wondering if all this talk of super does actually benefit you when retirement comes round.
The only people you ever hear talk it up is those selling something.
Im not after figures or alternative investment strategies just some info on the outcome, was it all it cracked up to be and to compare with thise who opted for, say SMSF or the like.
TIA.
Kezngaz.
If you are already in an "industry" super fund it might help at the end.
I would suggest you start looking at starting a second super fund/self managed one via some of the rupturable companies that assist with these. You don't need lots to start with.
Note you still have 20 years to go. A self managed form of super will build faster than any industry one.
Good advice from Cultana. In 20yrs the super rules will have changed heaps maybe no lump sums will be givern. Keep putting into your super fund but start looking for other outside of super investments, maybe property, Gold or other. Just stay clear of property spruikers. Find a financial adviser you are happy with and you feel you can trust.
Also do your own research be your own judge, plenty out ther who will tell what they would do but are they right ?.
Good luck for the future cause in 20yrs we could have self driven motor homes or caravans pulled by horses who knows.
Hi Cultana and GE.
Thanks for the info. Your replies were closer to what i had asked originally.
Its interesting to see there are all sorts of ways to help you fund later life, you just here so many negative things about all at some point that it makes it confusing.
I feel that asking those who are actually living it are those with the experience, and wisdom to learn from.
Thank you all once again.
Kezngaz.
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Commitment shows. Quality is what is done when no one is looking.
The practical effect of the 2017 Age Pension changes is that you receive more total retirement income (including Age Pension) with $400,000 in super, than you do with $800,000 in super, or even $1 million in super. Under the new rules, the most desirable savings targets are $400,000 or $1,050,000, and to accumulate over this $650,000 divide using the post-July 2017 concessional contributions limits would take 26 years.
Australias retirees realise they have been conned, and are now being punished for saving for their retirement.
Some points to consider :
Retirement savings sweetspot is now $400,000 for a home-owning couple, which will give a couple 94% of the full Age Pension, delivering a total income of $52,395 (based on September 2016 Age Pension rates)
Under the new rules, regardless of whether you saved $600,000 or $800,000 or even $1 million, you cannot secure more than what you secure with $400,000 until you have $1,050,000 in super and you will then be relying solely on your super savings.
In effect, financially, it is better to have $400,000 in super rather than $600,000 or even a $1 million in super, due to the harsh effects of the Age Pension assets test.
According to the paper, as a result of the July 2017 superannuation changes (lower contributions caps), overcoming this massive savings trap from $400,000 to accumulating more than $1,050,000, would take 26 years assuming a person fully utilised the lower $25,000 concessional contributions cap.
Doubling the effect of the Age Pension taper rate from 1 January 2017 (losing $3 for every $1,000 of assets over the assets test threshold, rather than losing $1.50 for every $1,000 of assets), means that Australian couples are effectively taxed 150% for lifetime super savings between $400,000 and $800,000. This hit means that doubling super savings will convert to about $11,000 less total income each year.
Get to know the rules . And work to what they are at the time !! Super or other forms of investing for the future . Don't listen to too many negative people !! They'll find a problem for every situation !!
