Super?

redwing said:

I have a Super fund that I've been keeping alive only because of the term life insurance within that fund and the fact I couldn't get that deal again

$900.00 contributed last financial year
$476.22 fees, taxes, deductions

Fund Performance

Capital Stable 1 yr 2.89%
Managed Growth 1 yr - 4.50%

Capital Stable 5 yr 1.26%
Managed Growth 5 yr - 3.94%

Capital Stable 10 yr 3.21%
Managed Growth 10 yr 2.36%

Super?

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redwing said:

Super?

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Sheryn said:

Super has it's time and place as one pillar in an individuals wealth creation especially once you get over 200K and start your own SMSF but a lot of people may not be able to do this for various reasons.

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Dazz said:

....hmmm....I wouldn't call it a pillar....more of an irrelevant little stump that holds up nothing.

People on an average wage should start somewhere, super may be a little stump but it grows

If you are relying on super to keep you warm and fed during your retirement years, then frankly, you haven't done a very good job in planning and executing your retirement strategy.

Super is but one part which is keeping me fed

We ignore super. We cannot control the rules, and have no say in the ever changing regulations that govern it's deposit mechanism, it's life whilst in there and also it's extraction and usage rules.....therefore it is useless to us.

As I wrote previously I enjoy learning about super and changing our strategies as the g'ment tweaks the rules each to there own.

I don't know one successful individual who relies on super, or anything to do with super.

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Dazz said:

....hmmm....I wouldn't call it a pillar....more of an irrelevant little stump that holds up nothing.

If you are relying on super to keep you warm and fed during your retirement years, then frankly, you haven't done a very good job in planning and executing your retirement strategy.

We ignore super. We cannot control the rules, and have no say in the ever changing regulations that govern it's deposit mechanism, it's life whilst in there and also it's extraction and usage rules.....therefore it is useless to us.

I don't know one successful individual who relies on super, or anything to do with super.

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Actuarial modelling using income of $19,399 a year as the "modest" benchmark and $37,452 as a "comfortable" amount for an individual's needs, found $500,000 in superannuation would last a person drawing the comfortable amount each year to the age of 89, still a year shy of the average life expectancy for someone reaching 65.

"Most people with $500,000 in superannuation assets would probably expect both to obtain more from an allocated pension and for it to last longer," he said.

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Last year, women aged 55 to 64 years were estimated to have an average superannuation balance of about $54,500, with average male superannuation balances at $113,200, data from the University of Canberra's NATSEM unit found.

While average superannuation balances are climbing as employer superannuation contributions mount up, the retirement savings gap remains a vast problem in Australia, with the most recent estimate by Rice Warner actuaries putting the figure at $695 billion.

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The superannuation industry lost more than $18 billion of clients’ funds last financial year. Part of this is explained by the high average allocation to equities.

What a dismal tale of woe is the Australian retirement savings industry.

Figures released by APRA on Friday show that, in total, the industry lost $18.5 billion of their clients’ money in the financial year to June, which was only partly made up by $6.5 billion in incomes (interest and dividends).

It’s true that contributions were strong, but only because of mandatory salary deductions, and only if you include self-managed funds, which, amusingly, the Financial Services Council did in its press release on the figures on Friday.

Voluntary contributions, in fact, declined, money poured into self-managed funds and the industry suffered net outward rollovers of $6.2 billion.

But that’s just one year – a better way to look at it is over the long term

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The average rate of return from the superannuation industry between 1997 and June 2012 was 4.9% a year, and the volatility was 8.4%.

For most of that time the 10-year Government bond yield fluctuated between 5% and 6.5% and, more importantly, the average return from the All Ordinaries accumulation index for the past 15 years has been 7.03% per annum.

For the year just ended, net investment earnings for the whole industry were $6.3 billion and expenses totalled $4.7 billion. But for retail funds, net investment earnings were MINUS $1 billion – yet expenses were another $2.7 billion.

Cont..........

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VYBerlinaV8 said:

Another vote from me for super being basically useless.

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Terry_w said:

Its not super that is useless but the industry managed funds where the money is invested.

Super is just a vehicle. If you personally invested in these same funds you would have got the same result.

Instead You could have your super invest in listed shares directly or in property.

The more I think about super the more I realise how good it can be.

Look at these advantages:
- Great asset proteciton
- Low tax environment. (if you are on 46% tax rate, diverting $25,000 pa into super is saving you 31% tax!)
- Income of the fund can be tax free when you start drawing an income stream. This includes capital gains fee.


So imagine you had some money built up in super. You go and set up a SMSF and buy a residential property. use 20% deposit and borrow 80%. Use a lender that does not require personal guarantees, so this loan won't affect your borrowing ability later. Get the 100% offset account and put all new income from the 9% employer contribution and rent from the property into this account.

The fund can claim depreciation on building and fittings and claim loan costs over 5 years. So the property may be positive geared but with a negative income. This will offset the tax on new contributions (I think).

You hold up and the offset account keeps increasing with rents rising and contributions coming in. The fund may even have a small tax loss which can be carried forward.

You also get your life insurance paid for by the fund.

After a while the fund has enough money for a deposit and costs on the next one. You keep buying in the fund and end up with several properties.

You then start a transition to retirement pension. This could be as early as 55 years of age.

When drawing a pension/income stream from the fund any asset of the fund will be tax free if it supports the pension. So you could sell one property, which hopefully has tripled in value by now and this capital gain will be exempt.

While drawing a pension you can continue to work and reduce your salary so more of your money goes back into super saving you more tax while you can supplement your income with the pension from the fund.

This sounds pretty good to me. Especially if you are around the 45 years old and are on a good income.

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Shaneelastic said:

As for a structure, there is no better structure, depending on when you require income in australia to provide a return

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