Superannuation Discussion + market volatility

[torks]

Not much to negative gear. Most owned outright and paying ridiculous amounts of tax for my hard work.

Might be worth considering a Family Trust structure for any future investments. The benefits are all assets are held inside the trust with the income then being distributed to either yourself or wife depending on the most tax effective method. Whilst this may not help at the moment with the residency situation its good to establish early in case your situation changes. If your wife does become an Australian tax resident you can then send income to her without triggering any capital gains tax or stamp duties. It can then mean income can also be sent to your daughter once she turns 18 (albiet a long way down the track).

This just gives you maximum flexibility for minimal additional cost. There are numerous tricks and subtleties involved in this so definatly talk to your accountant.

 

[JohnK]

Anyone here with knowledge on annuities or allocated pension funds? Are they popular products?

 

[cove]

Annuities have the problem that the interest rate used to calculate the monthly payments are close to zero.
Sure it is vey convenient but seek professional advice. Inflation can really hurt you.
My comment here is not financial advice........

 

[RooFlyer]

Anyone here with knowledge on annuities or allocated pension funds? Are they popular products?

Yes and yes.

 

[JohnK]

I have zero interest in paying for professional advice. I am looking at end user advice/experiences.

I know someone who had an allocated pension. Relatively conservative and was trying to maintain the capital but was hit quite hard in 2007/2008. Lost ~20% of the capital which is not a good thing.

I know another person who recently retired in Pattaya and has a large(ish) balance and getting around 7% return but for the product he bought into he must reduce the balance ~4% a year.

I'm looking at planning for our future and have decided that I will take advantage of the maximum superannuation contribution of $25,000 /year until 60 years of age at which point I'd be looking at some sort of income stream but also need to plan to leave some balance for my wife/daughter.

 

[Deleted member]

You will probably get what you pay for !

I have zero interest in paying for professional advice. I am looking at end user advice/experiences.

I know someone who had an allocated pension. Relatively conservative and was trying to maintain the capital but was hit quite hard in 2007/2008. Lost ~20% of the capital which is not a good thing.

I know another person who recently retired in Pattaya and has a large(ish) balance and getting around 7% return but for the product he bought into he must reduce the balance ~4% a year.

I'm looking at planning for our future and have decided that I will take advantage of the maximum superannuation contribution of $25,000 /year until 60 years of age at which point I'd be looking at some sort of income stream but also need to plan to leave some balance for my wife/daughter.

 

[lovetravellingoz]

I have zero interest in paying for professional advice.

I'm looking at planning for our future

These two points would seem to be at odds. Moreso if one's situation is not straightforward, and from what you have written on the forum your situation would seem to have quite a number of complexities.

 

[RB]

I have zero interest in paying for professional advice. I am looking at end user advice/experiences.

I know someone who had an allocated pension. Relatively conservative and was trying to maintain the capital but was hit quite hard in 2007/2008. Lost ~20% of the capital which is not a good thing.

I know another person who recently retired in Pattaya and has a large(ish) balance and getting around 7% return but for the product he bought into he must reduce the balance ~4% a year.

I'm looking at planning for our future and have decided that I will take advantage of the maximum superannuation contribution of $25,000 /year until 60 years of age at which point I'd be looking at some sort of income stream but also need to plan to leave some balance for my wife/daughter.

Seems like you have no alternative but to educate yourself! The problem is that the education requires a lot of time & 100% effort so that you avoid any future pitfalls.
There are many reasons why professional advice costs money ( I guess the word "professional" itself gives an indication). The financial services industry is no different to many others-there are advisors who are better than others & there are ones that would be best suited to you-you need to make the effort to work out which ones they are.
As with anything, the press will be full of the "bad" stories because that sells. There are many Australians enjoying their retirement because they educated themselves & put their hands up to get help if/when needed.
As part of your education I would be finding out what the relatively conservative person did in the face of widespread adversity in 2007/08. If they had a trusted advisor I would assume they sought their advice & did not make drastic decisions. Panic decisions & going away from a previously planned path are commonly the worst ones.
There is little point knowing someone is getting a 7% return if you don't know/understand the strategy that is bringing this return. Why aren't they getting 12% or 3%?

 

[JohnK]

These two points would seem to be at odds. Moreso if one's situation is not straightforward, and from what you have written on the forum your situation would seem to have quite a number of complexities.

Not sure they are at odds.

I bought 5 investment properties and didn't need professional assistance.

I have a very small share portfolio that has been growing quite nicely over the years and didn't need professional advice.

I now want to spend time researching superannuation, annuities, allocated pensions etc and I don't want to pay for professional advice. If people don't want to discuss their strategies that is fine. I'll work it out by myself.

Cash at 3% is an ok option. It just means I'll have a little less than I thought.

 

[CMA222]

You will probably get what you pay for !

In the complex and ever changing world of superannuation and tax planning, which pre-retirement are essentially the same thing, I am reminded of the classic saying "A person who advises himself in such matters has a fool for a client". Good luck.

 

[Deleted member]

Spot on, I have been providing Superannuation advice for over 30 years, and i still reckon i don't know it all, and in fact i use another adviser in my office to act as a sounding board and fact checker.

In the complex and ever changing world of superannuation and tax planning, which pre-retirement are essentially the same thing, I am reminded of the classic saying "A person who advises himself in such matters has a fool for a client". Good luck.

 

[RooFlyer]

Not sure they are at odds.

I bought 5 investment properties and didn't need professional assistance.

I have a very small share portfolio that has been growing quite nicely over the years and didn't need professional advice.

I now want to spend time researching superannuation, annuities, allocated pensions etc and I don't want to pay for professional advice. If people don't want to discuss their strategies that is fine. I'll work it out by myself.

Cash at 3% is an ok option. It just means I'll have a little less than I thought.

The saying "past performance has no relation to future outcomes" would seem to apply here. Buying properties and shares are decisions in the present. Advice re super pertains to the future.

I'm curious. Do you really come here seeking free advice on which to base your and your families financial future?

With cash at 3%, how much "less" do you think you'll get, over time? How much would some professional advice cost that would help you negate that loss?

Here is some thing for free - it's an old saying ( or close to it): "A lawyer who takes their own advice has a fool for a client"

 

[lovetravellingoz]

Not sure they are at odds.

I bought 5 investment properties and didn't need professional assistance.

.

I would be pretty sure that many, if not most, on this forum do a lot of DIY including how best to acquire FF points.

However equally one needs to know where to draw the line for ones's own circumstances and knowledge base.

ie I am an engineer and my father was a master builder. So I have the knowledge to do my own building inspections.

However I would recommend that lay people should minimise their risks by paying for a building inspection on any property purchase whether for investment or residential purposes. Even more so if they are buying an apartment or unit etc and cannot tell their AC from FC.


For your investment properties leases etc can be tricky things. Glad to know that you have the time to do all the background legal research to write your own lease documents and to know what is good for you both now and into the future and that you are well covered for all on for all the various misfortunes that can arise with tenants.

I could have done all the conveyancing and title searching on my property purchases. But I make more money by spending my time elsewhere.

 

[cove]

JohnK by getting married and having a child has halved your net worth I think.
Stay in love and you will be fine.

 

[Pushka]

JohnK by getting married and having a child has halved your net worth I think.
Stay in love and you will be fine.

Divorce does seem to be the major investment fail.

 

[lovetravellingoz]

JohnK by getting married and having a child has halved your net worth I think.
.

Unless one sought professional advice you can pretty much guarantee it. And indeed if the other half is not employed then the net worth will actually in all likelihood now be less than half.

 

[JohnK]

I'm curious. Do you really come here seeking free advice on which to base your and your families financial future?

Free advice? No. Personal experiences? Yes. I'm not going to run off to a financial planner. I don't need one.

With cash at 3%, how much "less" do you think you'll get, over time? How much would some professional advice cost that would help you negate that loss?

I said that was an option. I can choose any allocated pension and run with that. Or pay for advice to choose a "particular" fund to invest my money. They both have the same chance for success. I have no idea who is good and who is not. Should I ask the forum for recommendations or keep paying until I find a good one? I don't want to know.

Here is some thing for free - it's an old saying ( or close to it): "A lawyer who takes their own advice has a fool for a client"

Oh dear. Didn't realise that things needed to be done a certain way. I'm just so stupid. How did I get this far in life?

Apologies for going off track. Would appreciate any experiences with annuities and allocated pensions.

 

[Denali]

Doesnt your super fund provide consults? Mine does and its not a voice on the phone at Onepath or ANZ or whatever, its a financial planner that we operate our employer super fund through. They visit quarterly, have one on one with individuals ect.

My husband is with a different fund and gets the same opportunities - he talks to his super guy at least once a week at the moment to discuss options (retiring mid 50's) but otherwise he would speak to him every couple of months and has for years. Its included in his fund management.

Better seek and pay for professional advise than ask random internet strangers that havent a clue about your actual financial position.

 

[Deleted member]

This really needs to stop now. what kind of fool thinks that a cookie cutter approach to something as individual and unique and critical as personal circumstances with retirement planning advice is satisfied by a straw poll on a frequent flyer web site?
being a smarty pants isn't going to cut it.
the things that a (good) financial planner will consider before recommending a strategy (products are secondary at this point) include, but are not limited to:
1. the age of the client.
2. their assets and liabilities.
3. family structure, age of spouse, dependent children,etc
4. income goals.
5.taxation.
6. Health.
7. any pension entitlement (think UK Pensions as an example)
8.commencement date of the income stream.

I'm sure there are any more issues that need to be considered well before deciding which product one should choose.

in short, pay a little now, save a lot later thats my 2 cents worth, and mods if this is too offensive, please delete it.

 

[QF WP]

Spot on, I have been providing Superannuation advice for over 30 years, and i still reckon i don't know it all, and in fact i use another adviser in my office to act as a sounding board and fact checker.

+1 as well on time in industry and I never profess to know it all - but as a single planner practice I use the various technical services available to clarify questions and respond to clients.

Only just saw this thread - don't know how I missed it