28th Sep 2016
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Government calls for public submissions on super changes
call for submissions on super changes

How will the proposed super changes affect your retirement? If you feel changes are being made that could cause you to rethink your retirement plans, then now is the time to let your thought be known.

When the Government announced the changes to superannuation in the 2016/17 Federal Budget, many thought they were set to become legislation. But, with pressure from within the Liberal Party and the failure to secure support from crossbench MPs and the Opposition, further changes were announced on 15 September 2016.

The proposals now being considered are: 

  • $1.6 million cap on balances in retirement income accounts
  • reduce the income tax threshold on concessional contributions to $250,000
  • reduce the annual concessional contribution cap to $25,000
  • allow concession contribution of $100,000 per year for those with super balances of less than $500,000
  • increase innovation in retirement income stream products by removing regulatory barriers
  • improve the integrity of transition to retirement income streams

There are also amendments on the table to apply commensurate treatment to defined benefit schemes and constitutionally protected funds.

The Government has called for submissions from the public on these issues and you have until 10 October 2016 to make your submission.

For more information and to make your submission, visit Treasury.gov.au

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    COMMENTS

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    29th Sep 2016
    10:24am
    I think they have got it about right.

    A higher concessional amount after 55 might assist those who could not get enough into their super earlier.

    Generally a large number of Australian's could get to $1.6m if they plan and start early enough.
    johnny
    29th Sep 2016
    11:35am
    Yeah sure. If you start with a 100K salary and work for 50 years, may be. I guess a large number of Australians would fall in to this category.
    Anonymous
    29th Sep 2016
    12:50pm
    Johnny - you are so very wrong...

    Scenario 1...

    Someone on $30K per year automatically gets $2850 per year through their (unseen) 9.5% employer super guarantee.

    If they save just $10 per week more and put it into super - that is a total of $3370 in super every year.

    You keep doing that every year for 45 years compounded at 5% per annum.

    That 'poorly paid person now has $568,000 in their super when they retire.

    The effort to get this much in their super was negligible.


    Scenario 2...

    Someone on $50K per year automatically gets $5790 per year through their (unseen) 9.5% employer super guarantee.

    If they save just $20 per week more and put it into super - that is a total of $4750 in super every year.

    You keep doing that every year for 45 years compounded at 5% per annum.

    That less-than-average salaried person now has ONE MILLION DOLLARS in their super when they retire.

    The effort to get this much in their super was negligible.

    Getting to $1.6 MILLION is attainable for many more people than presently happens.

    We don't plan to fail - we just fail to plan.


    It's all in our mindset - if you think poor - you will most surely stay poor.
    Retired Knowall
    29th Sep 2016
    2:11pm
    Spot on Reasons, we did it, worked smart, saved smart.
    If we could do it on just over the average wage for most of our working life....anyone can.
    Anonymous
    29th Sep 2016
    2:23pm
    I got the figures turned around in Scenario 2 - it should have read...

    Someone on $50K per year automatically gets $4750 per year through their (unseen) 9.5% employer super guarantee.

    If they save just $20 per week more and put it into super - that is a total of $5790 in super every year.
    Captain
    29th Sep 2016
    2:47pm
    Reasons, you are correct. I started saving for my retirement when I was about 20. I retired at 60 and we now live a pretty good life 7 years into retirement (although not with $1.6m, and nowhere near it, also now age pension).

    I did however spend many years of night school improving my educational qualifications and therefore increasing my earnings capacity.

    Not all people will be as fortunate as me I suppose but the average person can aspire to increase their position in life, aim high and even if you only get halfway there, you will be better off for trying. No only money wise but self wise.

    Your statement of "if you fail to plan, you plan to fail".

    Having a good partner is also a huge step in the right direction.
    Captain
    29th Sep 2016
    2:50pm
    Oops, my "fail to plan etc" should have been continued with is absolutely correct.
    Anonymous
    29th Sep 2016
    3:10pm
    Captain - you are so right about the importance of your partner - being in sync with restraining consumption and having agreed savings habits and levels can make or break you.
    Old Geezer
    29th Sep 2016
    3:11pm
    Reasons it doesn't help those nearing retirement now at all. That is how unfair the new system really is compared tot he old one.
    Rae
    29th Sep 2016
    5:46pm
    I'd say people may be better off being able to save extra outside superannuation OG. If they save the 9% compulsory and then do some investing themselves and saving they will be ahead and also able to take advantage of learning about investing.

    There is a lot of unfairness but it is because of the times.

    The wealthy will suffer too as the Great Recession continues.

    As Reasons says saving is a good skill and learning how to make money from money an even better skill.

    Having money in superannuation while governments keep changing rules and contracts year after year is risky.
    Anonymous
    30th Sep 2016
    4:15pm
    Yes - not being able to sleep for ~45 years because of the government changes to super every three years or so - it's a terrible thing.
    almost a grey hair
    29th Sep 2016
    10:36am
    Every Australian should have their pension paid into their bank when they turn 65 as a matter of course , like they do in first world countries like New Zealand and every other country in the OECD. The billions that are saved by removing whole tiers of centrelink staff both frontline staff, investigative and administrative, not to mention the rent saved on building leases will more than pay for entitlements. This would benefit those who have secured their own future by working and saving all their lives by actually putting them out in front where they belong. We are all born the same, butt naked and toothless, ita what we do for ourselves after that day that really matters.
    Tom Tank
    29th Sep 2016
    11:02am
    The concentration by the current government is to look after those who really don't need to be looked after.
    Too many of them are using the concessions available through superannuation to build greater wealth. It is NOT about ensuring a comfortable retirement but about increasing their already very lavish lifestyle.
    It is not necessary to have a $1m super fund to have a comfortable retirement so concessions available should be geared to that level of amount in the fund. Once that level is reached then no concessions should be available. That would not stop being able to contribute but most likely those people would find another method of building wealth.
    Too many people, including many who contribute to this debate really have no idea what the ordinary person is able to accumulate.
    If I was to be brutal I would suggest that perhaps a love of money is their driving force.
    A method of helping the budget problem would be to reintroduce death duties as after all when you go you cannot take it with you. That would a method that would be painless to the person accumulating the wealth.
    I suspect this comment may raise a storm.
    johnny
    29th Sep 2016
    11:38am
    I, for one, fully agree with you. when it comes to Superannuation, the government's focus is totally on protecting the interests of the well-off.
    Drewbie
    29th Sep 2016
    12:27pm
    Regarding Current governments pandering to their wealthy bed-fellows I agree with your point Tom; however I do significantly " disagree " with your comment, ' It is not necessary to have a $1m super fund to have a comfortable retirement '.

    I beg the query; how many years does it take to reach that magic "million mark"? 40, 50, 60 yrs; & that's starting extra early if you've got a job a a mid-teen. Especially when you're slogging for & receiving an average weekly wage, which quite often these days is below the cost of living anyhow.

    Yes, compounding interest on regular super contributions does help but, with the prevalent low to slightly better than mediocre financial returns today, the likely-hood of the ordinary person being able to "afford" a lavish lifestyle, is not even within a hair's breadth of a pipe-dream.
    Anonymous
    29th Sep 2016
    1:03pm
    YUP - Drewbie - it might come as a shock - but most people get rich SLOWLY.

    Poor people become rich people by learning simple rules.

    Here are 3 great books for you to read - or if it is too late for you - to give your kids. Each book in its own way shows how poor people (can) become wealthy.

    * The Millionaire Next Door
    * How to Give Your Kids $1 Million Each! (And It Won't Cost You a Cent)
    * Rich Dad, Poor Dad

    It's all in one's mindset - a preparedness to educate one's self - a preparedness for your young-self to plan and sacrifice a bit of consumption so your old-self can retire comfortably.
    Old Geezer
    29th Sep 2016
    4:41pm
    Yes I have read all those books but it takes much more than reading them to change a person's mindset.

    I used to help a fellow run seminars to change people's mindsets and you could see the point at which they got it. Some never get it. Until I came across this fellow I thought people did some very odd things and after talking to him for awhile over lunch I realised that I was already there. So I had no hesitation in saying yes to help him when he asked.

    29th Sep 2016
    12:12pm
    For a start the government can grandfather all those who were drawing down on their Age Pension as of 2007 and keep the rules the same for them. Otherwise these hypocritical bastards are going back on the government's words and rules. How in the hell are people supposed to plan when the rules are changed after the game has started?! Bloody cretins!
    Anonymous
    29th Sep 2016
    11:12pm
    Get help! You are not alone. Call Lifeline 13 11 14
    Rae
    30th Sep 2016
    8:30am
    Why would he need Lifeline just because we have incompetents in Canberra with no idea of consequences.

    I agree Eddie and I can't wait until they mess a bit too much with the really clever people.

    A nice High Court challenge that asks for an explanation about where the money went would make my day.

    Maintain the rage Eddie. I agree with you about a lot of the nonsense going on.
    Anonymous
    30th Sep 2016
    9:22am
    Rae - you, Steady Eddie and and other like-minded would-be tax history and entitlement revisionists that roam this site can attempt to rewrite a better world for yourselves - BUT it just didn't and likely won't happen the way you attempt to frame it.

    Reality can suck and life's not fair - but that's life.

    Tell your tale of woe to TMac's son - or someone from the back-blocks of Malawi in Africa - the poorest country on earth.

    They will give you an entitlement reality check.
    kev888
    29th Sep 2016
    12:15pm
    I must say All-most a Grey Hair has a handle on reality. I agree our pension entitlement should be banked automatically into our accounts the very second we reach the age of retirement. It is our money we pay tax and contributed the $20,000 each and every year until retirement . If you doubt the $20.000 pension contributions hears the run down. We pay 120 different taxes PA our personal taxes and that on everything we pay for. By the time we reach retirement the govt have accumulated from each of use 1.3 million . If you are fortunate you may live until you are 75 @ $20,000 per year the govt have paid you 200,000 our of the 1.3 leaving them with a profit of 1,1 million . Admittedly some falloff the perch before they reach entitlement. and a few never contribute but Hey! what do the govt do with the profits and the bigger question is where is it? considering Aust has had 25 years of continuous wealth growth ?????????????????? the aging are the Govt cash cows. I have paid and I expect my entitlements and so should you with out question ....It is unfortunate most of us are slaves of democracy to keep the pollies fat in there retirement. Free we are not try going out of the county for any length of time ,and see how quick the govt are to cut off the pension entitlement
    Anonymous
    29th Sep 2016
    1:47pm
    kev888 - I think you are forgetting a few really important things about your taxes.

    Your taxes are also used for a huge number of other things that you or others need, expect and use...

    * Your security - all the armed forces, border farce, etc.
    * Public health and PBS
    * Unemployment
    * Disability
    * Roads and major infrastructure
    * Family Allowance
    * The Public Service
    * and the list goes on for ever

    Looking after pensioners is but one of many things your taxes were USED for EVERY YEAR - BUT NEVER SAVED.

    They have to find the money for your pension EVERY YEAR in the federal budget - along with everything else Australians consider they are entitled to.

    People in other countries like the UK definitely have paid for their pension as it is that county's retirement plan.

    Australia has a superannuation scheme for those who want to save for their retirement or personal savings - and the pension scheme for those who have not bothered or had the opportunity.

    The pension in Australia is not funded - never has been - it is designed to ensure no Australian lives in poverty - and is just part of the government's annual budget - and being a large and growing part of that budget - is therefore always under pressure.
    Anonymous
    29th Sep 2016
    8:07pm
    More crap.
    Rae
    30th Sep 2016
    8:42am
    There was no consideration of the costs of massively large immigration and encouragement of population growth through baby bonuses and childcare rebates.

    I fail to see why retirees have to pay for mistakes made by government policy.

    Billions are wasted through privatisations and contracts to multinationals that are not cost effective. In other words taxpayers are paying billions to make a few very wealthy.

    I fail to see why retirees have to pay for mistakes made by government policy.

    Let everyone lose a bit if necessary including those receiving tax concessions that are unsustainable.

    You forget the Accord Reasons. The agreement that workers would not claim wage increases so business could flourish and in return Social Security would be maintained by government through taxes and dividends from public institutions.

    Three and a half decades later when those workers who were denied their share of productivity growth are retiring suddenly that Social Security is unavailable.

    Revolutions have begun for less reason than this.
    Anonymous
    30th Sep 2016
    9:44am
    Don Quixote had delusions and fought windmills - you and others are delusionarily fighting for an urban legend about missing social service pension entitlements that NEVER EXISTED - EVER - PERIOD.

    If you based your retirement on an urban legend instead of researching the FACTS - you people seriously need to get over it and move on.
    TMac
    29th Sep 2016
    12:20pm
    I'm ok with the changes.....there is an incentive for people to save for a comfortable retirement but not an incentive to park mega millions in a low tax environment. Self funded retirees should be encouraged as they are not drawing on the public purse.

    As they say "people don't plan to fail they just fail to plan"
    Anonymous
    29th Sep 2016
    1:55pm
    Agreed - there has to be incentive - although I think Morrison is a typical arrogant born-to-rule Lib - he begrudgingly makes a point when he says the $1.6m amount is aspirational. Aspiration is good.

    It is attainable with planning - you just have to start early enough if you are a lower paid worker.
    Anonymous
    29th Sep 2016
    8:47pm
    Reasons = Warren "Knowall" Bluffet.
    KSS
    29th Sep 2016
    12:44pm
    I agree with Reason's first comment that those over 55 should have a higher concessional contribution maximum. Reducing this amount by $10000 immediately (not even over time) is going to affect far more people than advertised and not the super wealthy either. Those over 55 now have planned their retirement savings and are working to those goals. Now the posts have been moved and I suspect many will no longer be able to meet those original targets.

    In my case, I will be affected and I earn significantly less than the average wage. Exactly how much worse off is still being calculated but there is $60,000 right there in the reduction then add the tax rate increase of 15% and the compound interest over the next 6 years and the amounts are not inconsequential. In fact it may well be the difference between being self funded and requiring at least a part pension.
    Rae
    29th Sep 2016
    5:53pm
    Defined Benefit Super Fund members never had any tax concessions at all or any 9% guarantee. They just lived on 60% of what everyone else was taking home.

    Do exactly that and save and invest that after tax income, around 25% to 30% of your after tax pay and you will get there.

    If it is gone before you get the money you can't spend it.
    Drewbie
    29th Sep 2016
    12:59pm
    When Superannuation was introduced by Treasurer Paul Keating, I was a young working bloke & quite frankly its whole concept wasn't adequately explained to me & so I didn't contribute much to any Super I had @ the time. Now I'll have to rely on the "old-age pension, what there will be of it, approx 15 yrs from now. And not to mention, I'm trying my hardest there-in currently.

    I have for many years fully agreed with the premise behind the "Spirit of Superannuation", that everyone IS and must take full responsibility for generating their ongoing retirement income up until drop of perch time.
    Were I to have a "substantial retirement income source", I would be quite content to contribute a flat 10% of aforementioned income to pay for "all" the essential services I currently enjoy, as long as it was enshrined in Law that could not ever be repealed.

    Were that applied "across the board" on every Super account holder, Governments of the day would have a permanent revenue stream, daily ticking over into treasury coffers & they'd have no need to borrow so outrageously, nor attempt to "improve" Superannuation & subsequently stuff it up for everybody.

    In general terms; the higher taxes are, the more hell bent individuals are on minimizing their tax obligations. Again, across the board, were income tax just a mere 10% I reckon most, if not all folk would happily pay it because in its purist sense, they are keeping the " other 90% ".

    Regarding any " re-introduction " of death duties as suggested in one post; That will cause an immensely unfair burden on the bereaved & shows ultimate scorn & contempt for the significant financial and social contribution any individual has made over a lifetime in making Australia a far better Country for all who call it home, to live in.
    Old Man
    29th Sep 2016
    2:11pm
    I believe that there should be a set of rules, acceptable to the majority of Australians, which must be set in concrete and made unchangeable by any political group regardless of which one is in power. Sadly, politicians see a pile of money and think they should have a big chunk of it. The only way to make this happen is that any changes would need 2/3rds of the House of Representatives and 2/3rds of the Senate to pass any changes.

    There should be some sort of tax on super because it forms part of a salary or wage structure and I suggest that there be a 15% tax on collection, ie pay 15% of the amount given to employees before it goes into super. After that there should be no more tax deducted regardless of the amounts accumulated. If a person obtains a windfall because of a lottery win or funds bequeathed which is to be put into super then a 15% tax should also apply. Bear in mind that this is money that they have never had so 15% of it shouldn't cause any imposition.

    The super funds that have a life policy attached can be allowed to continue except the default position should be reversed. At present the default position is that people have to opt out of the choice to have life insurance and I believe that the default position is that they should opt in. In my experience, the cost of life insurance per $1000 is almost double what you would pay if you went to an insurance company and purchased life insurance, in other words, a rip-off.
    BElle
    29th Sep 2016
    2:15pm
    The biggest problem that exists, and has always been the situation is that it was badly planned in the introduction of the scheme back in the 90's. It was been changed so many times that it has been impossible to make satisfactory arrangements for ones retirement. It needs to be fixed and fixed permanently.
    One of the biggest issues is that the Financial Institutions have far too much say in how they are run. -- They are by far the biggest beneficiaries of whatever scheme is proposed.---
    Britain introduced their contributor scheme back in the early 1960's. They had a vision that the future pensions would be inadequate for people to live on. They have made very little change to the original scheme.
    Some people in the UK have three income streams in retirement. The basic Government Pension, the Government Contributory Pension (based on your income through your working life). and one is at liberty to set up your own Private Scheme, without it impacting on the other types of income. The Private Schemes are purely optional and have the similar residual factors built into them as the Australian Superannuation Scheme. One should note that our Superannuation Scheme is not only based on personal income, -- it is part of each persons wage/salary structure, therefore it is your part of your earned income -- not some sort of charitable handout. You have earned your Super.
    My solution - Pay EVERYONE a basic pension and leave the savings and other assets alone. The amount saved in all the administration, wrangling, fiddling etc etc etc. would more than offset the cost for all those of pensionable age to receive the basic pension.
    It is way past time to stop all the changes and have a system that works and works well and is everyone's favour.
    The following generations will have their turn when their time comes.. its up to them to see that they take care of their financial welfare. To assist in this it should be taught in schools at the earliest appropriate time.
    Anonymous
    29th Sep 2016
    3:38pm
    No matter what you may learn now is of little use in the future if the rules are changed. Any knowledge gained and planning made is then null and void, as is the situation today with superannuation.
    Anonymous
    29th Sep 2016
    3:48pm
    Fast Eddie - that statement is only just completely wrong.

    I have been in super for around 45 years. The rules have changed constantly over that time - sometimes for the better - sometimes so-so.

    BUT - the rules are ACCUMULATIVE - they often build on each other and to maximise your outcomes you need to understand prior rules to keep up with the changes. The same goes for investing outside super.

    It's when you get to retirement that you see the difference. The ones who told me that the super rules always change and therefore super was not worth participating in - they are still working - and probably will be for some time.
    Anonymous
    29th Sep 2016
    6:24pm
    Totally disagree with you. You would NOT have done OR not done what you did two DECADES ago with your financial situation to have it the way it is now had you known what the changes over the past twelve months have been, to say otherwise you are either lying or grossly deluding yourself, but not others. You talk tripe.
    Anonymous
    29th Sep 2016
    6:38pm
    My care factor about your lack of even a basic layman's knowledge of Australian superannuation history = ZERO.

    AND considering superannuation for everyone has been around for about 24 years - you should seriously consider changing your first name.
    Anonymous
    29th Sep 2016
    7:47pm
    You are not only illiterate, but also a full blown fool who doesn't seem to have a pot to pee in nor a window to throw it out of. Did you go to even middle school?
    Old Geezer
    29th Sep 2016
    8:52pm
    Super is only one part in the financial jigsaw not the whole jigsaw. Super does have it's tax benefits but it also has it's limitations. You may pay a bit more tax on savings outside super but they have no strings and are not subjected to the whims of future governments. I only hold about 10% of my wealth in super so it's only one piece in my financial jigsaw. Tax can be very limiting if one does structure all the pieces around tax. I structure mine around making a good return and if I have to pay lots of tax then I must have made a good return. Tax is only secondary to this.
    TMac
    29th Sep 2016
    4:06pm
    I agree Reasons... I've also stayed the course with super and the changes over the decades and importantly kept myself informed to capitalise on any opportunities along the way. Even with the latest changes investing in super is still very attractive.
    Old Geezer
    29th Sep 2016
    4:20pm
    It certainly saves a lot of tax.
    Not Senile Yet!
    29th Sep 2016
    4:25pm
    The amount of changes to suit the Government enforced tax rip-offs from Super is nothing short of dipping into retirement savings of the masses!
    They continue to subsidise those who simply do not need it by allowing them to pay less tax if they put their salaries into Super!
    Insurane Companies have doubled their Costs on Life & Disability Insurance without answering to anyone....whilst the Government continues to Double dip by taxing any growth/profit made from investments! And let's not mention some of the Absurd fees or Salaries of those who administer the Super Funds!
    Over 30 changes in 25yrs tells the story!
    Super was never designed to allow so many pigs at the trough.....nor was it designed to replace the Aged Pension.....but rather to reduce the dependency on the Government for Full Aged Pensions!
    Between inflation & Govt introduced tax on it....Super has been flogged into no longer being relevant for the average person....but rather a tax dodge for the wealthy!
    They have destroyed it's original intent!
    Anonymous
    29th Sep 2016
    5:10pm
    Not Senile Yet! - No-one has ever said super was designed to replace super - including the government over the past 20+ years.

    There are THREE PILLARS of RETIREMENT INCOMES that are facilitated by the government to ensure that retirement income policy is sustainable in the context of an ageing society.

    Australia has, for the last TWO DECADES, pursued a three pillar approach to the provision of retirement incomes, comprising of:

    1. The means tested and publicly funded Age Pension;

    2. Compulsory private savings through the Superannuation Guarantee arrangements; (The purpose of superannuation is to provide retirement savings for people that will give them an overall retirement income higher than the Age Pension alone can provide), and

    3. Voluntary private savings, supported by taxation concessions and direct government payments for low income earners.

    People can fight it all they like - but the retirement savings rules have been there for everyone to see for well over 20 years (compulsory super started in 1992). If you ignored it - you are likely to be frustrated by what you now observe regarding super - if you weren't able to take advantage of it - you don't have to like it - but people in plenty of countries pay taxes - but get NO pension EVER.

    See more here...

    http://www.treasury.gov.au/Policy-Topics/SuperannuationAndRetirement/supercharter/Report/Chapter-1
    Anonymous
    29th Sep 2016
    6:25pm
    Even MORE TRIPE!
    Anonymous
    29th Sep 2016
    6:29pm
    Not so Fast Eddie - I just realised should have written "No-one has ever said super was designed to replace THE PENSION - including the government over the past 20+ years."
    Anonymous
    29th Sep 2016
    7:52pm
    With your self-professed knowledge it would have been better for everyone, including yourself, for you to have written nothing. You had better go back to the clinic for a checkup.
    TMac
    29th Sep 2016
    4:45pm
    My twin daughters are now 26 years old and have been in full time employment for about 7 years. During this time they have contributed the min 9.5% employer funds into super but I have also encouraged (more like pushed) them to contribute an extra 6-7% into super. The fund that I have them in is a "high growth" one not your normal "default" fund. They now have around $90k each in super, are years ahead of where their friends are at and they have done it without too much pain to their social lives. If they keep this up they will have a comfortable retirement even if they have several years out of the workforce having children.

    My advice is to start your kids early and get them into the super savings habit and they will reap the benefits long after you are gone.
    Old Geezer
    29th Sep 2016
    5:03pm
    I disagree as that extra 6-7% would be better saved as house deposit as retirement is a long time away whereas they will need somewhere to live in a much shorter time frame. I advise young people to only put in what they have to now and save the rest outside super for a home and family.
    Anonymous
    29th Sep 2016
    5:18pm
    TMac - that is a pretty impressive effort. I constantly reinforce on my own kids about having short, medium and long-term financial goals.

    At 26 it will certainly have the opportunity to compound at a really fast rate and they will not have to work very hard input dollars-wise to get to $1.6m - so long-term plan is working.

    Let's them now concentrate on medium term targets like housing. I think that is great.
    KSS
    29th Sep 2016
    5:29pm
    Old Geezer; In fact you could easily do both by foregoing a couple of cafe coffees a week, a couple of drinks at the bar a week and a glossy magazine a month. Perhaps one less pair of shoes a year, one less shopping trip and a cheaper hotel option on holiday, stop buying lunchtime sandwiches everyday, use less expensive cosmetics and be a little more circumspect on putting petrol in the car. All these small tweaks add up and you would come close to matching that 6-7% going into super and put it into home deposit savings. Of course you could get really serious and make far bigger savings but that takes sacrifice and effort. It all depends on priorities and planning.
    Rae
    29th Sep 2016
    6:08pm
    Congratulations TMac to those sensible young ladies. My kids also saw the results of saving while young.The grandkids are showing an interest as well.

    That saving buys freedom and is worth a little bit of delayed gratification.
    Old Geezer
    29th Sep 2016
    6:11pm
    I still disagree as young people need to get their basics sorted out before they put another penny into a very long term vehicle such as super. Save as much as you before buying a house and then pay it off as quick as you can. Then you can worry about super and your retirement. Personally I see super as only part of the mix in that money saved outside super is far more usable than money in super. Money in super is always subjected to changes and anyone under 40 today has a high probability of seeing super nationalised before they depart the mortal world. If super is nationalised I know where I'd like most of my money to be and it's not in super.
    TMac
    29th Sep 2016
    6:34pm
    Old Geezer, any saving is good saving however if you are smart about it you can do both. The extra 6-7% I noted is via salary sacrifice which is pre tax so you get extra bag for your buck when investing, whereas saving for a house deposit is using after tax dollars. However, I'm pleased to say my daughters are also each saving up for a house deposit and the way the market is at the moment they have time on their side. The Oz capital city market is so overpriced and in my view has plenty of room to come off its highs in the near term. We live in Brisbane and interestingly there was an article in today's AFR stating that 1 in 6 units sold in Brisbane in the last 12 months was sold at a loss. With heaps more units coming onto the market up here in the next couple of years I reckon they have plenty of time to save up a decent house deposit.

    Oh and in case anyone is wondering.... they both live independently and are not on the gravy train at home with mum and dad.
    Anonymous
    29th Sep 2016
    6:43pm
    I concur on the housing front - and tell my kids the same. NOTHING goes up forever - not even Australian housing.
    Anonymous
    29th Sep 2016
    8:02pm
    Reasons - a misnomer if I ever heard one. You have been blowing bland steam out of your bum since this article opened and NONE of it makes an iota of sense. You have a lot of learning and introspection to do.
    TMac
    29th Sep 2016
    7:40pm
    Changing the subject a little....

    Very early in my working career my boss way back then once said to me ''you will come across two sorts of people in your life...those that make things happen and those that watch things happen" and he went on further to say, "so which one do you want to be".

    That early advice has served me well as what I see in this country these days are the doers getting hammered at every corner because they have got ahead in life. It seems so much easier for the followers to just constantly knock the doers and at the same time put their hand out for welfare of some sort at every opportunity.

    We should always have a safety net for the vulnerable in our community but sadly I feel we need a serious jolt to knock a large slab of the population out of this sense of entitlement that they now have.
    Anonymous
    29th Sep 2016
    8:04pm
    Losers LET it happen and winners MAKE it happen. You can pick which are which by reading some of the above tripe.
    Anonymous
    29th Sep 2016
    9:24pm
    TMac - and that jolt needs to go under our polly’s butts sooner than later also. I think that idiot Hockey had it right, at a high level only, when he talked about the end of the age of entitlement. Bad luck he and Abbott did not get the difference between progressive and regressive taxes on the poor. Even those with money could see at the time that their budget was incongruent with what he was espousing and unacceptable.

    An interesting thing about your 'doers' - if you frame it in terms of retirement financial success – is that the government and reserve bank - through their never ceasing economic drive for ever increasing GDP and inflation - needs there to be those that just ‘have it happen to them’ - to be losers.

    The wealthy - broadly speaking - spend much less than they save compared to those who are not wealthy. The economy needs people to spend - which the majority happily do without regard to the future. How often do you hear people say "There is no point saving - I will probably be dead by 65" - or similar?

    The masses are led to the pension/welfare slaughter by the ruling elites - as they need as many as possible to borrow and spend in order that the GDP grows the economy and jobs - and inflation increases eradicates the debt they are incurring for electoral entitlement promises. The elites put off until tomorrow the day of reckoning that their election entitlement promises bring.

    In the meantime, the tax breaks like super, negative gearing, capital gains discounts, etc are there for anyone to use and become comfortable or even wealthy - but only a few bother to take advantage - including the ruling elite - of course.

    So a small proportion of the population get wealthy - the 'doers' - and the ‘have it done to them’ who have faithfully done what the elite conned them into with promises of entitlements like the aged pension, who BTW mostly forget to check how basic the pension actually is until it is too late - find themselves at the mercy of fickle future government largesse and pension/health benefit rule changes as the annual federal budget is put under more pressure every year due to ever-increasing entitlements.

    They the ‘have it happen to them’ exhibit an observably high level of frustration and hatred of the system and of those that they believe deceived them – or did better – but are now at its mercy as a government welfare recipient. The government does not want them to be on welfare – but effectively encouraged it over their lifetimes. Even now the super guarantee is not enough for people to accumulate enough for retirement – but the ruling elite need the ‘have it done to them’ spending it instead – and have rejected the increase until later. They know the ‘have it done to them’ will oblige.

    The ‘doers’ know what the elite are up to and will save more accordingly under the super rules, etc. The same ‘doers’ have often reached escape velocity by retirement and have enough resources to be self-funded and can ignore the government and its protagonists.

    The rules are the same for everyone – but as you say - there are ‘doers’ and the ‘have it done to them’. And I think the day of reckoning for non-essential welfare entitlements like the aged pension is getting very much closer.
    Anonymous
    29th Sep 2016
    10:38pm
    Should have read UNLIKE the aged pension - the AOP is essential.
    ex PS
    30th Sep 2016
    11:18am
    What I see in the responses to this article are a lot of silly statements, usually quoted by the well off to justify the inequality around them. " The harder you work the luckier you get", "loser's let it happen, winners make it happen", "if you work hard enough you will succeed".
    All sweeping meaningless statements, that like most sweeping statements do not apply to the general population.
    Yes we should encourage people to give their best and always aim as high as they can imagine, but it is unrealistic to even imagine that if you apply these lovely sentiments success is assured. Some of the hardest workers I know, people that make me look like a slacker, are relying on a Pension while I retired early on a self funded Super Pension.
    To trivialize peoples endeavors by saying things like"if you followed this simplistic golden rule you would have done better" is insulting to them and is not worthy of the people who have done well.
    By all means celebrate your success, but please don't do it by demeaning those who may not have had the opportunities that we had or even the odd lucky break that some of us enjoyed.
    There are people out there who are, through no fault of their own, one pay packet away from being homeless, If it happens it will not be because they didn't work or try hard enough, it will be because successive politicians have stuffed the Australian economy either by using surpluses to by votes or fund things like The Outback Women's Surfing Club.
    Anonymous
    30th Sep 2016
    3:51pm
    ex PS - this site is called - YOUR LIFE CHOICES - it mixes the poor, middle-class and wealthier together - with superannuants and pensioners.

    You have to expect to get an eclectic range of opinions and views based on the different groups' experiences - and those views will make all sides uncomfortable.

    No thinking person has an issue with those who really need government support - that is something a civilised society should do with some of its taxes. So let's get over the social inequity thingy - there are some who definitely deserve assistance - and get it - including the OAP.

    Many people on this site see themselves as VICTIMS about their level of resources once they retire – it is someone else’s fault - especially the government’s. The government stole their retirement entitlements that they THINK they paid for with their taxes all their lives - BUT FORGOT TO CHECK – as it is NOT TRUE.

    At the other end of the scale, Tmac’s son has a disability - BUT ensures he is in control - NOT A VICTIM, he does not BLAME others, genetics, the government or seek support. It is there if he ever needs it - but he chooses to PLAN his own way through.

    Some on this site will have become successful in their own lifetimes - done it slowly through investing - and know what the majority could have achieved because they have watched their peers spend their way to retirement poverty. They read the comments here and are frustrated by the government blamer rhetoric - it could NEVER be their fault.

    It's just a fact of life - NOT an INSULT - the ruling elite WANTS the majority of Australians to borrow and spend on consumer crap - and they willingly oblige.

    The ruling elite KNOW most people will fail to look to see how the government REALLY looks after them in retirement - and therefore plan differently - AND - and the government is RIGHT. Of course the elite are using the tax rules 'poorer' others could have used - albeit at a lower level – and become wealthy themselves at some level. It CAN'T BE DONE is the false catch cry on this site.

    So what you are observing is those who know how to build assets from nothing over time giving their perspective when the opposing 'poor' person view tells them it is not possible. When the poor tell the once poor they CAN’T achieve wealth – that naive perspective will likely agitate them into action - just the same as those with assets will aggravate those who have not done as well.

    The sad fact of life the uninformed get frustrated by government rule changes. The wealthy will just see it as a challenge and keep learning about and adapting to those changes, leverage them to their advantage and keep moving forward over their lifetime.

    You mistakenly observe another opinion as an insult - but those who have watched their own version of your hard working mates who are now on pensions KNOW that many could have done much better - but chose to consume and not to learn and make the investing effort.

    I am here to tell you - all those sayings "The harder you work the luckier you get", "loser's let it happen to them, winners make it happen for them", "if you work hard enough you will succeed" - and you forgot "People don't plan to fail - they fail to plan" - is EXACTLY what a number of people who post here have learnt to be true - and teach their own kids the same phrases - along with the rules of the investing game - to hopefully ensure they do even better.

    A winning mindset, interest, investment perseverance, a problem solving mentality and staying on target - along with some luck - is the difference between the ‘doer’ and the ‘have it done to them’.

    Unless we are lucky - we all start out poor - for many (not all) it is YOUR LIFE CHOICES that makes the difference at the end.
    TMac
    30th Sep 2016
    6:58am
    This is not about the haves and have nots nor the rich and the poor, this is about the realities of life. Pollies and governments will come and go but life will go on and what you put into life is usually reflective of what you get out of it.

    My parents taught we to work hard, be thankful for what you have and your good health, give back where you can but never apologise for the good things that may come your way if you have put in the hard yards. What I see these days is a developing culture in this country of people (of all ages) just putting their hand out and at the same time denigrating those that have worked hard to achieve success.

    Let me share a real life example, namely my 25 year old son. He was born with cerebral palsy and had a rough trot growing up. After many operations in his younger years and with the support of his family and school he graduated from year 12 and then completed a TAFE course, which has enabled him to be gainfully employed in all but 3 months since he left school.

    This is a young man who could quite easily just sit on the disability support pension for the rest of his life but he refuses to do so. I can tell you that when he gets home from work each night he is mentally and physically buggered, but he also has an enormous sense of pride in that he is standing on his own two feet and also contributing to society.

    What you put in = what you get out.
    Old Geezer
    30th Sep 2016
    9:54pm
    Your Money Your Call on the 29th September 2016 is worth listening to.
    TMac
    1st Oct 2016
    10:24am
    Thanks for the heads up Geezer, yes it was interesting.

    Roger Montgomery is worth listening to and the main reason is that his thinking is fact based and not pie in the sky predictions like some financial commentators.

    What he said about the new bogey deflation, the US elections and minimum wage growth and the Oz housing market all made sense, cheers.
    Anonymous
    2nd Oct 2016
    10:15am
    Bloody hell - those Centrelink guys were very helpful - but it makes all the crap that gets talked about here about rorts for the supposed rich with tax loopholes a total joke when you listen to that podcast.

    BUT - bugger me - it is just as - if not MORE complex - to manipulate your assets to get the maximum government pension money than it is to spend time learning about Australia's tax laws and accumulating it in the first place!

    It is interesting how many pensioners now have to spend their latter years learning about and keeping up with the OAP rules changes instead of super and other tax laws when younger. There are certainly reduced benefits for many from 2017 going by what Centrelink tell you when you use their online OAP calculator.

    Centrelink even gave REALLY GOOD ideas about how to use any age difference between a couple with significant assets about manipulating the amounts you hold in the older person's name to low amounts so they get a part pension - until the younger member is of pension age!

    Depending on your present mis-balance between couples and amounts, it does not seem too hard to manipulate your assets if you do it quickly under transitional super rules to get around $10K p.a. for a few years using the Centrelink site to calculate possible benefits.

    You end up with seriously unbalanced super amounts between a couple - and problems with taxable components and probably $1.6m clashes for a number of people if you used this legal lurk. AND - you have to put up with Centrelink at some level to get it established - so I am not sure about the net benefits compared to the downside - it needs to have the numbers crunched carefully.

    Interesting none-the-less - I had not thought about doing it - it's the only useful thing you have ever posted OG.
    Old Geezer
    3rd Oct 2016
    10:31am
    I find it is worth listening to as I something pick up an idea I can use. The loopholes in the pension and super systems are amazing.
    Rae
    3rd Oct 2016
    3:20pm
    Thank you OG. It is an interesting site.

    I particularly found the segment on bonds useful.
    Rodent
    3rd Oct 2016
    8:12am
    Re Posted as Information ONLY

    For those of you that have some difficulty getting an overview of the Asset Test Changes as at Jan 2017, compared to now( note comments in article) this link may help

    http://www.catholicsuper.com.au/assets-test/


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