Unfortunately I suspect that is exactly what will happen.
Hockey flags changes to super before the next election
- Thread starter Ed Barton
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Unfortunately I suspect that is exactly what will happen.
Yup.
If people can't be responsible with it and then want to rely on the government to pay for a pension, then expect this.
Suits me fine
An annuity would be one of the last things I'd want to invest my super in, I'd rather have some control even if it's just share funds with limited withdrawal rates.
I believe the UK is trying to free up their rubbish annuity system they've been stuck with in this way.
A forced annuity system would make you sell up your entire smsf and give the lot to an insurance company. In return they pay you about 6% for as long as you live but they keep the capital. I don't think many Australians would really want this.
My preference would be to invest in a range of stocks and cash designed to give yield, growing with cpi over time.
The issue is the 90% of the plebs who blindly put money into this thing called Super to one day hope there is enough to get that lottery windfall when they retire and then spend is on a OS trip for 12 months and all the luxuries and mod cons not the other 10%, people like us who actively manage their retirement portfolio with exit strategies and long term investment goals.
AIUI they're scrapping that rule, so if you want to draw out your pension fund to buy an IP or a Lambo you'll be free to do so. The gotcha is that what you take out will be treated as income and taxed at your highest marginal rate (40% or so for any significant amount).
Exactly.
I have brought this up before that they should means test it. If you can demonstrate you have XXXXX amount of assets by the age of 50 or so they should give you full access to it, perhaps tax at the full rate what you take out but do give people access to it. The money is of more use going into the economy than just being hoarded away provided the people given access to it are not just blowing it all and then have to rely on the pension.
You honestly think theyd be able to call in all smsfs?
Perhaps they would change the rules so the money remained tax advantaged while inside the SMSF, but lost that tax advantaged status unless certain conditions were met.
I'm just referring to how the UK system has worked for decades (although they are changing it). As soon as you retire you are forced to liquidate all super funds and buy an annuity, regardless of market values at that time
So people who retired in 2009 were completely stuffed since they had to sell at the stock market bottom and buy an annuity at historical low rates. Maybe that's why they're changing it.
Did people in the UK under this arrangement have a choice in when they retired? Was it possible to say "well, the stockmarket is buggered, so let's work another year and decide then".
It still sucks to be stuck doing this, though.
This article explains it pretty well.
http://www.telegraph.co.uk/finance/...u-can-have-a-blank-canvas-not-an-annuity.html
The 2014 changes are good for me since I have some money in a British pension.
http://www.telegraph.co.uk/finance/...u-can-have-a-blank-canvas-not-an-annuity.html
Since 2011 you've been able to delay the annuity purchase a few years but not escape it.
The 2014 changes are good for me since I have some money in a British pension.
Thanks for that, interesting read. In Australia I don't think we have restrictions anything like this, at least not yet.
The best case is not to have a blanket policy for everyone. The policy should be more restrictive when super balance is low but provide more freedom and flexibility when your balance exceeds certain threshold and as long as that threshold is maintained you have that freedom and flexibility.
What governments lot of time fail to recognise is when they alter policies they think peoples behaviour will continue to be the same after the change. That is not true. People adjust their behaviour accordingly thereby, mostly nullifying governments intentions. This is true not just for super but any policy change affecting people's tax/income.
Cheers,
Oracle.
What governments lot of time fail to recognise is when they alter policies they think peoples behaviour will continue to be the same after the change. That is not true. People adjust their behaviour accordingly thereby, mostly nullifying governments intentions. This is true not just for super but any policy change affecting people's tax/income.
Cheers,
Oracle.
What the government should do is ensure that people super is used to purchase an annuity that will provide for an amount equal to the pension or whatever amount to provide a basic level of support. By basic, I mean basic.
What they do with the rest is up to them. They can blow it on an OS trip or buy that flash car or big boat.
That way, they won't go running back to the government crying poor.
What they do with the rest is up to them. They can blow it on an OS trip or buy that flash car or big boat.
That way, they won't go running back to the government crying poor.
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