Super savings
I think those who do not wish to use an SMSF for their savings for old age currently paid by employers. Should have their savings protected better than at present.
At present funds are run by private enterprise where small balances are eaten up by fees . Or unions where unions charge all sorts of hidden fees and ignore privacy rules.
why not use the future fund which is currently used by the civil service .
secondly perhaps they could also allow the use for deposit on housing and grant mortgages as long as the property remained in the super system i.e it remained an asset of the individuals super fund and was considered an asset of the fund .
Amazing that YLC don't join this discussion which is a positive suggestion that affects all its readers ...
Hi Pete
Many thanks for some great ideas on super.
Just a bit of background why we have not yet posted - we are a team of 12 - but most do not work every day. All content on our site (about 13000 content pages) is created, managed, moderated, updated, legalled etc etc by this team. To say it takes a lot of work is an understatement. so if we take a day or two to jump in - forgive us - we are doing our best. Leon will ask Deb for a response on your specifics and we hope to post in a day or so - meanwhile, it's on with tomorrow's enews and Saturday's travel special. Warmest, Kaye
Thanks Kaye much appreciated
Hi Pete, as Kaye has said, you've put forward some great ideas.
Until such time as there is a full review into superannuation and retirement incomes, the chances of them being adopted are slim. The Government has clearly stated that it will make no changes to superannuation, so it appears we are well and truly stuck with the unequitable system that clearly doesn't suit all.
Thank you for saying I have put up some great ideas .
As my suggestions are non political in that the left should be delighted in that I am suggesting a Govt Body (Future Fund) take over the running of contribution Super.
The right should be delighted in my suggestion of removing tax on Super contributions .
and the young be delighted in being able to access super for housing deposit .
Maybe if YLC were to promote these ideas in an editorial we might be able to convince Kaye to promote these ideas in other age forums she is involved with.
"MS: You are here to talk about one of the biggest issues, the ageing population. You publish YOURLifeChoices, which is the nation's number one website for pre-retirees and retirees. You have 100,000 members, of which 86 per cent are aged 50 to 75. You are also a director of the Toronto-based International Federation on Ageing, and you are undertaking a PhD at the University of Melbourne on barriers to retirement planning. Before we look at the specific issues Kaye, can you please set out the big demographic, social, economic picture?
KF: The big demographic picture is that we're moving towards a time when there will be more people aged over 60 than under 15, in certainly the developed nations in the world but also large nations such as India and China. We need to recalibrate much of our social structure to take into account people living longer and longer and longer."
Maybe we could start with what is wrong with the current system .
Mr Costello Mr Abbott have stated in unguarded moments that the current system is a con .
If you are lucky you save just enough to not go on the pension ..
Mr Keating has said yoU need 15 per cent of wages to be meaningful ...
At the moment employers pay 10 per cent approx of base wage and its taxed .
To increase the pool why not ask employees to pay 5 per cent of their wages and stop taxing .. So increasing the amount to be available .
At the present there are billions lost in super contributions ...This either gets eaten up by fees in the private sector or is taken by the govt as revenue .
Why? If the tax dept can keep track of us by a TFN surely they can keep track of our contributions especially if a govt dept ( future fund ) runs our contributory super.
With the Sungapore provident Fund you can use your super savings for property we should follow Singapore and turn our future fund into a provident fund for all and not just the civil service and stop the rorts that currently take place .
https://mycpf.cpf.gov.sg/Members/schemes/schemes/housing/private-properties-scheme
Pete
Even if you have a self managed super fund ... there are fees charged and you carry all your own risk.
You are finnacially better off by buying and selling shares that give franked dividends balanced by real estate .... then you do not have the Government interferring with it except for the tax.
Good point Abby! And blue chip shares are the way to go..
Well I raised two issues those who want to run their own SMSF should be allowed to do so . But I feel the contributions to it should not be taxed so as raising the pool.
My second point was that those who wish to use a fund should Be allowed to use the Future fund as do civil servants today . Thus avoiding any risk with and charges with private fund managers .
My third point was that these funds whether manger by individuals or the Future fund should be available for housing deposit and the property remain an assett of the fund ...
Your point on saving for your own retirement outside the super system is obviously a good one . But the law stands that your employer must contribute on top of your salary 9,5 per cent of your base salary to a fund of your choice ..
it was this compulsory saving that I was referring to ..
Quote "My third point was that these funds whether manger by individuals or the Future fund should be available for housing deposit and the property remain an assett of the fund "...
What would be the point of having super in order to provide for old age if allowed to dip into it to buy homes etc and secondly, it would be a nightmarish situation for funds to get involved with monitoring these "properties". Not viable..
It doesn't matter what assett your fund holds it has to be monitored in your annual return .
Bump
I firmly believe your superannuation should not be touched at all.
The whole idea when it was set up was to fund your own retirement.
If people keep dipping into it the purpose of people funding themselves is pointless as they will end up on the aged pension which should be there as a safety net for those less fortunate.
Iam referring to those in the workforce now; not those already retired who, in the main, did not have the opportunity to build up superannuation.
Totally share your view Radish as in my post above ...
Radi I am not suggesting that anyone dips into their super at all . All super is invested to make a return for instance SMSF are allowed to invest in property.
All I am suggesting is that that young ones be allowed for their super to used t invest in their own property And that interest remains in the super system ..
Pete, I understood what you meant. I was referring to the fact that people are being allowed to dip into their super before retirement age. do not see a problem with what you are suggesting but there may be some unknown pitfalls .The powers that be may think it is worth looking at if and when they do a review of super.
Although it wasn't meant as my main point about super I would say I see no pitfalls than already exist on super investments ..
if the fund put up a ten percent deposit it would have a ten per cent interest in the house if it was to be sold the fund would get its money back plus 10 per cent of any capital gains .
The same as any other investment that funds make..,
Jeepers Seth, now Abby's gone and spilt da beans - like ya hair bun Abby!!!
Gee I thought that was B Bishop Abby, looks a lot like her
Plan B ???
I think you may be right :)
Could be...... could be with Rayyan
Unfortunately the Super fund pot will always be for politicians like bees to a honey pot and Politicians are NOT to be trusted as they will find means to make it into another hollow log.
Slightly off track here, sorry, Pete, one thing that does concern me with Self Managed Super Funds is the fact that most, I would suggest, are managed by the husband.
What happenes when he is not around to look after the fund and his wife has not a clue?
This is the problem facing a friend of mine. Told me she would not know what to do in the event of her husband's death so she will then have to find someone else to look after the fund.
Also as we age our memory/faculties are not as good as they were and we may be prone to making stupid mistakes etc and we do not know when we may have a major health crisis.
Personally, I have an industry super fund and I am very happy with that and I do not have the worry of handling it myself.
But to each their own.
One of the options is to find a trustworthy accountant.
The only advantage I can see in a Superfund as opposed to just holding shares is that it may put you into a partial pension..... but do not know for how long for .... it just may disappear when Labor come into power .... same as ownership of your own house.
If we have a provident fund like Singapore which we could turn our Future fund into . Anyone like your friend who found herself in that position could fold her SMSF into the provident fund .
Frankly I see no dIffculty at all in running your own fund . If there was a requirement as per my suggestion below of a simple actuarial test each year then she would know exactly the amount to draw down each year to make her money last. This should be a law so as to avoid those who have saved for their own retIrement becoming a burden on the taxpayer and helping those with no financial nouse...
Radi it's a side issue but I don't agree with unions running billions of dollars of super funds or private enterprise ..
There is too much negativity around discussion of providing for our older generation in later life.
We dwell too much on our experience of our parents and there health in there later years . This will not be the future . The exciting developments are not life extension but HEALTHY life extension . So any investigation into future retirements situations should start from the premise of making out older generation financially independent for the whole of their lives and thereby giving them dignity and choice . That's why my whole suggestions I am making is to increase the pot . Don't tax savings you reduce the pot by 40 to 50 per cent . Increase the savings by employees contributing to their own pot not just employers . Don't tax the earnings of super funds . Take it out of the hands of private enterprise into a Singapore Style Provident fund . Do not let govt use current savings for current expenditure it is putting a burden on our children,We will always need a state funded pension as a safety net but it should be higher than now and govt should be cutting spending on those not in need to fund it.The only limit on draw downs from SMSF should be an actuarial test every year to make it last for the rest of your life . I.E Your investment returns have an effect on your balance annually that balance should directly affective your draw down limit the following year . For instance last year my returns greatly exceeded my draw downs therefore this year I can spend more whilst making my fund last. Discuss ....
Life expectancy grows all the time and we cannot, as you say, Pete, dwell on the past.
Years ago people did not live long lives...I know a lot of my rellies way back died early and you only have to look to the UK where they had the Black Death which killed half the population These days this would not happen with modern medicine.
We need fresh ideas going forward to the future.
Totally agree Radi , let's look at making our future retirees as independent as possible...
People have to have a hand in their own destiny, up to them to save for their retirement...
Perhaps the government should contribute to a Superannuation Scheme for the Disabled People same as the employers have to contribute for their workers.
If you think about it Abbs it wouldn't make much sense. The taxpayer already provides a pension to the disabled who need it.. You would be asking the taxpayer to compete with themselves and creating more beurocracy..
Boo
You do realize that
is now considered racist
Only with Melbourne AFL. crowds .
This whole saga of booing has gone from the sublime to the ridiculous. I am glad I no longer watch any football code.
One further thing; the mind set of people must change also.
Those coming behind us will probably have a differing view already; but the idea of expecting the pension to fund almost "everyone" in retirement needs to change.
As we now have compulsory superannuation people should be planning for their retirement with the view to being self funding which is what was envisaged by government when it was set up.
Yes there will be people who will need a pension or part pension but the practise of "rearranging" affairs in order to quality should be a thing of the past and their should be closer scrutiny on this.
Yes I agree with Pete all the super should go into the future Fund the same as the Politicians and Public servants.... there should not be profit making enterprises running super Funds as in due course it diminishes the individual super pot.
Pete
The reason I said the Government should contribute on behalf of the disabled is that in that way everybody would have a retirement pension as they age. As it is now the Politicians will find some excuse to spend the money s the disabled pension is not budgeted for.
Yes Radish
The chopping and changing the Super Rules is a recipe for disaster.
I think the above suggestion coupled with not taxing savings for old age would greatly increase and protect retirement income .