Super changes revealed to be confusing for many

Many Australians are confused by the Federal Government’s proposed super changes.

Super changes revealed to be confusing for many

According to new research commissioned by the Association of Superannuation Funds of Australia (ASFA), many Australians are confused by the Federal Government’s proposed superannuation changes.

The poll of over 1000 Australians revealed that one in three fund members had no idea of the Federal Government’s taxation changes proposed in the May 2016 Budget and 24 per cent found superannuation too complicated to understand.

“We also found that 70 per cent of consumers do not read product disclosure statements or are not aware of them. This means many are making product choices based on emotion or they are not making any decisions at all,” said ASFA chief executive Martin Fahy.

The most alarming figure to come out of the poll is that 50 per cent of respondents had no idea of how much super they would need in retirement, suggesting that respondents had given little to no thought as to how they would retire in the future.

Mr Fahy believes that the superannuation guarantee rate of 9.5 per cent should be quickly boosted to 12 per cent, and then to the 15 per cent originally planned by Paul Keating.

Do you find the proposed changes to superannuation confusing? Should the superannuation guarantee be increased to 12 per cent and then 15 per cent? What would help you to better understand your super entitlements?

Read more at www.heraldsun.com.au
Read more at www.thenewdaily.com.au

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    COMMENTS

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    kev888
    15th Nov 2016
    10:15am
    the system is designed to be confusing, its divide and conquer,.The political message is send retirees to the poor house
    Chuck
    15th Nov 2016
    10:45am
    Is'nt it wonderful the ordinary worker has had their superannuation frozen at 9.5% for some time now, while those bluger politicians have had their superannuation at 15% since 2004.
    KSS
    15th Nov 2016
    12:20pm
    Raising the level of employer contribution will not change the fact that people sign things they haven't read and don't understand!
    Rae
    15th Nov 2016
    1:44pm
    Nothing stopping you saving the other 5.5% outside super and the income is still tax free in retirement up to a decent level.
    KSS
    15th Nov 2016
    1:48pm
    Agree Rae and we have been told for the last few years that relying on the employer contribution is not enough.
    johnny
    15th Nov 2016
    11:30am
    Everything to do with government is confusing. They make everything so complex that financial advisors and tax consultants become a must for everyone. After all, the government gets advised by those with vested interests.
    Old Geezer
    15th Nov 2016
    1:01pm
    Educate yourself instead and read and understand everything before signing it.
    jackyd
    15th Nov 2016
    11:36am
    Another Turnbull direction in the Twatisphere!
    KSS
    15th Nov 2016
    12:17pm
    If people are not asking questions or reading the PDS, then really who is to blame if they don't understand? Ignorance is no defence. It is the same with anything you are asked to sign; if you don't understand it or haven't read it then don't sign. If you do, then on your head be it!
    Rae
    15th Nov 2016
    1:47pm
    Then the government goes and changes it anyway regardless of the terms agreed to when the contract was signed.
    Not a Bludger
    15th Nov 2016
    12:24pm
    Spot on, Johnny
    Julian
    15th Nov 2016
    12:29pm
    It doesn't matter what the figure is. Until they leave it alone, it will always be confusing and not enough for the average worker. Politicians excepted.

    15th Nov 2016
    1:22pm
    Typical government confusion. Most of these political clowns don't know which way is up so how do expect them to explain ANYTHING in a lucid manner?
    Charlie
    15th Nov 2016
    1:25pm
    I'm not confused about anything in particular, I'm just confused
    jmbaker
    15th Nov 2016
    1:40pm
    Agree totally with KSS. It is worth spending the money for advice, lot cheaper in the long run if things go belly up.
    Old Geezer
    15th Nov 2016
    2:16pm
    Advice is only worthwhile if it is the right advice and you understand it. Better to educate yourself and then you will know if the advice is good or not. Remember all advisors are just salesman trying to sell products. Most have had no experience with such products themselves. If they had then why would they be bothering working to recommend them when they would be wealthier enough not to?
    Rae
    15th Nov 2016
    1:43pm
    No I don't believe there should be an increase in the super guarantee at all.

    If 24% don't understand it then they shouldn't be invested in it at all.

    There should be a living Social Security pension for aged retirees and other income taxed appropriately just the same as other countries do.

    Superannuation was set up as a tax minimisation scheme. It is not investment at all.

    And it is blatantly discriminatory with so many different people getting different benefits or not at the whim of politicians that don't understand the schemes any better than anyone else.
    Old Geezer
    15th Nov 2016
    2:13pm
    There should only be welfare to cover the basics of life after a certain age. If you want more than this then it is up to you to plan and provide the funds for it. Why should the taxpayer provide for a life of luxury for those who make no effort to do so for themselves?
    Old Geezer
    15th Nov 2016
    2:17pm
    Of course super is a tax minimisation scheme. Why would anyone bother with it if it wasn't? I certainly would not.
    Rae
    16th Nov 2016
    9:10am
    I never said anything about luxury OG and the universal aged pension paid to most first world retirees and even some developing world retirees is obviously fair and sustainable and not luxurious or countries like the US, UK, NZ, etc wouldn't pay it to everyone.

    Our current system is neither fair nor sustainable.

    It's Newspeak made up by closet fascists in secret meetings.

    It isn't fair because some people get an OAP and some don't regardless of how hard they worked and for how long or how much in taxes they paid out.
    Some people get tax concessions and others don't.Regardless of how much was saved and for how long and if governments raided the funds or not.
    Fees and charges on compulsory super are all over the place and some employers do not pay the money as they should or in a timely fashion.
    Self employed don't have to contribute at all if they choose so even super isn't universal.

    It's not sustainable because of the billions being drained from revenue to support the tax concessions that only some people get and the lengths people are going to to avoid tax anyway.

    A welfare system like this only works if you have a strong tax base which we no longer have regardless of the huge taxes paid as too much middle class welfare is being distributed to favoured people in an attempt to win votes. Not to people who actually need it but to those ideology favours.

    As to the last question. They bother with super because it is compulsory and the promised pay off sounded reasonable. That was in the days politicians were sort of truthful and trust existed in the world.

    The lesson is to never believe politicians and cover your back. There is nothing stopping them taxing super pensions in the future.
    Nor taxing lump sums or even legislating against lump sums.
    They have already discounted and deemed non concessional amounts in defined benefit accounts and could easily do the same to accumulation accounts if they chose.

    That is as close to theft as you get without actually taking anything.

    The whole thing is fraught with sovereign risk and ----

    Betray me once shame on you. Betray me twice shame on me.

    Trust them at your own risk OG that's my opinion.

    As to that luxury thing you'd be amazed at the business people with plenty of money who structure affairs to get the OAP paid to them. And yes I suppose they can afford to spend it on luxury items.

    It is the honest people who pay for it all.
    PAYEdmydues
    17th Nov 2016
    12:44am
    So after a lifetime in this peaceful lucky country there is only one thing 'economic' retirees want..more.
    The Phonse
    15th Nov 2016
    2:59pm
    If earning nil income and after turning 65 is there any point of having super ? as the interest gets taxed and deeming applies .As 'out of super' it only gets deemed but not taxed as the interest would be under the income threshold.
    Old Geezer
    15th Nov 2016
    3:59pm
    You should not be taxed for super in the pension phase after age 60. Fund also pays no tax in pension phase.

    Super is good for me as it is tax free but outside super it would be taxed as I have other income that uses up my threshold.

    As I am a fully self funded retiree deeming does not effect me.
    The Phonse
    15th Nov 2016
    4:15pm
    Unless it's in an' allocated pension, the interest gets taxed 15% as it's being earned and deemed if your over 65 as well . Hence one would be getting deemed and taxed. But' out of super' only deemed if one is under the income tax threshold. {am I correct ? ]
    *Imagine*
    15th Nov 2016
    10:18pm
    OG I have tried telling you this before - please pay attention. If your super is from an untaxed source such as a State government pension paid to teachers, police officers nurses etc. THEN IT WILL BE TAXED. The tax rate is the same as any worker but senior offsets apply, if you are under a threshold. So to state that "You should not be taxed for super in the pension phase after age 60." Is simply not true. Many of us are taxed, and the gross income is assessed as income for part pension purposes. And if your pension comes from the UK then Centrelink will not only count the tax that you pay as income but will also count the return of your own capital (undeducted purchase price) as income for the income test applying to part pensions. The 'system' is rotten and needs a total review.
    Rae
    16th Nov 2016
    9:16am
    Yes Imagine and the contributions were taxed going in as well with none of the tax concessions OG finds useful. That is one reason the system is blatantly unfair. The over use of tax concessions make it unsustainable too. Which is why they are trying to wind back TTRs etc and limit amounts held.
    Old Geezer
    17th Nov 2016
    4:17pm
    The system is very fair as you don't have to have a lump sum invested to get a defined benefit pension. So you get a return on nothing.
    *Imagine*
    17th Nov 2016
    8:06pm
    What are you implying OG? I paid 6% of my wages all my working life, until the last few years when I paid 9%. I could have taken it all as a lump sum but decided to go for the defined benefit pension. If I don't live long enough, then all of my payments (or lump sum) go to government coffers. My return is coming from all of those contributions. You need to speak to former contributor "Bonny" she was as blind to the truth as you appear to be.
    Old Geezer
    18th Nov 2016
    7:31pm
    Imagine it would have been wiser in hindsight to take that lump sum. I know of one fellow who did and has more than doubled it since. His retirement is better than he hoped it would be. Plus all his income is tax free. He asked my advice at the time and what I would do. I said take the lump sum as you will then have the money and control over it. This fellow also paid in 6% and then 9% to get maximum benefits so I have a good idea of the scheme you are referring to. He just transferred the lump sum into a SMSF.
    Mad as Hell
    15th Nov 2016
    3:52pm
    The LIBERAL Party did a deal with Clive Palmer and pushed the Super Gaurantee of 12% out till financial year 2025/2026. The LIBERAL Party and Greens do not represent the interests of the retiree who has played by the rules.
    Old Geezer
    15th Nov 2016
    4:04pm
    If people want more in super then they can put it in themselves.
    Mad as Hell
    15th Nov 2016
    4:08pm
    Thanks Old Geezer I didn't know that, wish I was smart as you.
    Old Geezer
    15th Nov 2016
    4:09pm
    Some people are lucky if they get any super at all. I am currently doing a submission to the Fairwork Ombudsman for a young worker that was paid half what he should have been paid. Sacked without notice or pay in lieu of notice and no super paid into a super fund.
    Rae
    16th Nov 2016
    9:21am
    Yes OG it's a dog's breakfast and increasingly people are being ripped off by employers not doing the right thing, going bankrupt and getting away with it all.

    Fair work is another stupid Newspeak use of the term fair.

    What fairness does Fairwork ever give?
    cdbstock
    15th Nov 2016
    3:54pm
    Absolutely agree with Paul Keating's 15% - to provide retirees with adequate income & to reduce dependence on the 'public purse with its inadequate income
    Agree that Super Is very complicated - a simpler scheme is needed
    Old Geezer
    15th Nov 2016
    4:00pm
    Super is not complicated unless you make it complicated. Mine is very simple.
    floss
    15th Nov 2016
    4:43pm
    Super is now on the nose for Working People, thanks to this government.And guess what they will now have to rely on welfare very smart Malcome
    Nomad51
    15th Nov 2016
    8:18pm
    Neither side of politics can get the message; DON'T MESS WITH OUR SUPER. The only certainty we have is the uncertainty thanks to these clowns' tinkering. Whatever happens, it will all change again when a new set of clowns get in. You can bank on this!
    Rae
    16th Nov 2016
    9:26am
    And how much time has been wasted since 1992 messing around with a perfectly good system.

    Countless days, weeks, months of Parliament time, accountants time, employers time etc.

    Why?

    Perhaps getting on with the real problems of governing is just to hard for these clowns so time wasting and fussing with people's lives suits them better.
    Cheezil61
    15th Nov 2016
    9:29pm
    I will admit there are a lot of terms & words mentioned in these YLC newsletters about super that have absolutely no idea what is being talked about - am very confused to say the least. Unfortunately not everyone is smart enough to learn or be educated on super - there is a massive amount of info to understand & if we are working 12hr days & nights for example (fulltime shiftwork) & trying to look after elderly parents & family & keep up with other household chores etc it is virtually impossible to find time to get my head around all of this information! Even if these terms/words were explained to me by financial advisors I would never undetstand most of it & would forget the rest before I even got home anyway!... All I know is we are being ripped off & i believe i would probably have been better off if I'd kept this money stashed away under the bed as Malc Frazer once said because by the time I'm ready to retire it will probably have vanished/be inaccessable from my super account the way things are going as they keep making changes...
    Rae
    16th Nov 2016
    9:39am
    At least 60% of the population feel exactly the same way.

    If you are in a good industry fund you will be okay at the end but do take advice once you hit 55.

    You can have a decent amount of savings and still retire at your retirement age with a full OAP and that is probably what will happen.

    All the fuss is about those earning over $80 000 gross anyway which is not the majority.

    When Keating introduced Super as compulsory I imagine he had no idea they would stuff it up so badly or that wage rates would stagnate for 30 years or that deflation would go on and on. That means money being worth less so interest rates get to nothing as no one will pay anything to borrow it.

    Your super savings would be increasing if fees are not too high and you have opted out of insurance you don't need.

    If in an Industry fund go see an advisor. It's worth the time and a one off visit should not cost anything.

    There are very simple to understand books available too at your library and if you ask the librarian they will find one for you.
    MO6B
    16th Nov 2016
    11:14am
    Yes I find it confusing.
    Chris B T
    16th Nov 2016
    3:38pm
    Saving for Retirement by what ever means is not the main problem.
    The spending of it is the problem.
    How well you use this money especially the tax free component is the the problem.
    World wide travel, Expensive homes, renovations, spending for the sake of it.
    Spend to you run out of funds, there are no rules on how to spend this type of savings.
    [;(
    Crimmo
    16th Nov 2016
    5:25pm
    It doesn't help that journalists get it wrong or don't explain clearly Probably because they often don't understand themselves. The age pension funding problems we have today were caused by Menzies back in 1949. Keating's Superannuation Guarantee was a step in the right direction, but should have been attached to income tax, which would have broadened the coverage considerably.
    Jolly
    18th Nov 2016
    7:20am
    I have said before what we need is a Government run Pension system. I came to Aus 46 years ago after working in the UK since I was 14 and a half. I am 67 now and receive a part UK State pension, it is not a lot obviously as I only contributed for a short period of time. So why can't the Government here introduce the same system. No complications, no (none) financial experts, no dodgy company directors or dodgy union heavyweights sitting on super company boards. Also no bull from centerlink as the pension is tax free and (in the UK you can earn as much as you like when you get the pension and it does not affect the pension). Wake up Australia - you are not the lucky country anymore.
    Captain
    18th Nov 2016
    9:15am
    The way the UK system works is too simple. It means that OZ politicians would not be able to rip off and confuse the OZ population.