Super has it's place. It can be pretty advantageous in certain circumstances.
1 In 5 Australians: What Super is left by the age of 70?
- Thread starter Kristine..
- Start date
I think so to, especially as some of the industry (and government) super funds have sickness & accident and death built into them, and charge very low fees.
Even those who I work with on the 'crappy' government super schemes, who have not contributed themselves, have amounts decent enough to supplement a pension/other investment income - most I've spoken to have 100K to 200K at retirement but didn't reap the higher employer contributions till quite late in life, so not a bad result considering.
The only thing i really love about super is that life insurance, and disablement insurance can be paid from it rather than my own after tax income.
Being a few years away from the 55 minimum to access it...i am 34....i tell my wife i think of my super as our "lets spend it on whatever we want" fund. this is of course if our investing till that time puts us in the position to be financially independant at that stage....which we plan to be
Being a few years away from the 55 minimum to access it...i am 34....i tell my wife i think of my super as our "lets spend it on whatever we want" fund. this is of course if our investing till that time puts us in the position to be financially independant at that stage....which we plan to be
There are some great government super schemes out there still in existence, like through defence and the APS. The old defence scheme (DFRDB?) was a corker, where after a minumum of 20 years service you could be paid a nice lump sum and pension being a % of your salary when you got out of the services, not have to wait until 65/67/100 to start drawing. How good would that be?
Agree, the old ones were great (I'm with an old one and can retire at 55
).The crappy public service ones they have now are only marginally better than the industry funds, but over a lifetime of contributions, especially if in a well paid job, and if a small contribution is paid by the employee also, it would amount to a figure that would be nothing to be scoffed at some 40+ years later.
I couldn't find the "Compare The Two" advertisements with the nurses in the ad on YouTube Kristine, hopefully the below will suffice and the assumptions are correct (someone may need to check my numbers)
Compare the two advertisement
http://www.industrysuper.com/assumptions.aspx
The IndustrySuperlink Contains details of the assumptions used in the advertisement
In this ad, there are two men, both 33 years old, both working alongside each other on a workbench, they both contribute the same to Superannuation (one has Industry Super, the other does not).
One at retirement age (65) has $373,596.00 in Super
The other at retirement age (65) has $305,084.00 in Super
Let’s look at the winner in the scenario who achieved the superior return, how far will $373,596.00 go in 32 years from now when he hits 65 years of age?
1.Invested at 7% your $373,596.00 = $503.00 p/wk
2.Invested at 6% your $373,596.00 = $431.00 p/wk
3.Invested at 5% your $373,596.00 = $359.00 p/wk
Taking inflation into account and 'assuming' that inflation is running at 3% each year, your return is now something like:
1. Invested at 7% your $503.00 p/wk is only worth $195.00 p/wk in today’s equivalent purchasing power dollars, you would actually need it to be around $1,296.00 in the future to be of the same purchasing power value as $503.00 p/wk today.
Imagine the numbers at your superannuation nest egg of $114,000.00 or the lesser $50,000.00
I think Pully is talking about the government super co-contribution of up to $1,500.00 each year for low income earners?
Yep ... hubby's super is in a semi-conservative fund, and still lost nearly 1/3rd during the 2009 GFC.
How the hell is that possible? We tried to roll it out prior to the GFC and use the money to buy 3xIPs, but being an industry super he cannot.
That really irks - with 3 IP's we would've had around 25% growth and around $50,000/yr rental income. So, instead of an extra almost 50% growth in value/cash, not including contributions, we're left (even after the "bounce") a super fund that hasn't moved even with contributions.
And they wonder why we pay the minimum in?
If you're 34 now, I don't think you can access super until you're 60. And the govt is currently (quietly) looking at ways to increase that number further. I've seen discussion papers that suggest 67 would be a good age to set as the minimum for accessing super, increasing to 72 over the next several decades.
I, for one, have no intention if being in full time work until I'm 72.
Yep,
IIRC it was 75% of your average last 5 years earning for the rest of your life regardless of other income etc. BUT if you did less than 20 years you effectively only got your contributions back with no interest (or similar) it was a win big/lose big scheme.
If I had stayed my 20 years at the age of 36 (I joined at 16) I would have had a nice income of at least $30k+ for the rest of my life regardless of other income
DRFDB got shut down around 1991 though (IIRC) and new members could only select MSBS
Yep, have had a look into it all. Financially it still doesn't make sense for me - I have no plans to enter full time employment at any time within the next 5 yrs (at least, my youngest child is 12 days old) and maybe not even then depending on circumstances (hopefully will only enter part time employment).
Given that I am 29yrs old at the moment, I will be close to 35yrs before I am even considering any kind of employment that might produce some super in levels that wouldn't just be eaten up in fees. If I actually had something in there to start with, it might be worth extra contributions.
We are better off using the money we would have contributed, and investing it ourselves. We ensure my super has enough in it to pay the life insurance premiums, that is about all it is good for at this stage. Unless someone wants to start paying wages and super to stay at home mums - but I won't hold my breath.
My DH's super is pretty healthy, but we are not going to be relying on it for retirement. We consider his super to be a 'bonus' on top of whatever we can accumulate ourselves.
Yes, super. I've always known it's a pretty shitty retirement plan..
Just 1 property would be a better plan than relying purely on super.
1. It is leveraged from the start, so 7%p/a on $500k is better than 7% on $10k lets say.
2. You don't have to wait until you're 67 to retire on it.
3. This means you can use it to purchase more and more super funds
4. There are no real tax deductions for super, meaning you cannot claim any PAY-G and will 'lose' these funds each year like regular civilians do.
5. Guess what? After buying all these properties, You've still got your super as a last resort just like all other workers
Just 1 property would be a better plan than relying purely on super.
1. It is leveraged from the start, so 7%p/a on $500k is better than 7% on $10k lets say.
2. You don't have to wait until you're 67 to retire on it.
3. This means you can use it to purchase more and more super funds
4. There are no real tax deductions for super, meaning you cannot claim any PAY-G and will 'lose' these funds each year like regular civilians do.
5. Guess what? After buying all these properties, You've still got your super as a last resort just like all other workers
Just shows you how little i know about super
Made me think to do a couple little calculatios...worked out that if i work for another 12 years till 46 based on current income level...making the 9% compulsory contributions and based on a 7.2% compounding return for super...i will have just over $1,000,000 at age 60...assuming i can access it at this age!
is a 7.2% return for super realistic?...just made for easy maths to use it
The aged pension, and the age you can collect super, are 2 different ages.
My understanding is super can be collected between 55 and 60.
My husband has around 85K that can be collected at age 55 (in 3 years), but even that can probably be collected sooner, if he states he has chronic health problems and can't work/is unemployed and is at risk of defaulting/pleads poverty.
My understanding is super can be collected between 55 and 60.
My husband has around 85K that can be collected at age 55 (in 3 years), but even that can probably be collected sooner, if he states he has chronic health problems and can't work/is unemployed and is at risk of defaulting/pleads poverty.
It's great for peace of mind. Hubby is in one of these (although not defence but just as good). Having given 24 years of service and still working, every extra year served over 20 years means a bigger % of salary when he chooses to retire. Also extremely generous spousal pension and child support should the unthinkable happen (no need to pay for life insurance). Starting so young (19) means, hopefully, an early retirement. Shame for the younger ones that these don't exist anymore.
Was he working at the time? He needs to meet a condition of release to access super. Being in an industry fund has nothing to do with it. He may be able to implement a TTR strategy, but he can access only a maximum of 10% of the balance if he does that.
Anyone over 55 and paying more than 15% tax, I would suggest seriously looking at a TTR. It's not optimal for all situations, but it's pretty worthwhile checking out.
I've got a mate who is still in defence after 28 years and is under the old scheme. He reckons if he makes it to 30 years, at the ripe old age of 47, he can get a $58K CPI-indexed pension for life and around a $300K golden handshake on exit. He jokes around and says he might retire permanently then (owns his own PPOR too), but I reckon he'd end up bored pretty quick. Great position to be in though - I hate him!
I can understand your hatred of him! Hubby's full entitlement (73% of base salary of final rank achieved pension for life with a rate of only 15% tax, CPI indexed and any future pay increases for the organisation are also given to pensioned former employees) comes in after 30 years' service - it will see him 'clear' more money than he does now working full-time shiftwork. I suppose it's not a surprise that the state govt abolished this scheme. He doesn't plan on working one day over the age of 49 years old when the 30th anniversary of his job commencement arrives (not at that job anyway).
Although he better not become one of those bored old men who annoy the crap out of their wives or he'll wish he'd never retired
.I'm interested in this, just found out we could do it last week.
What are the strings attached?
The info I got was junk mail from NAB and it suggested you might have to reduce your hours of work.
Novar, strings are that you can only access a maximum of 10% of your super balance. Contact your super fund for further information.
