Superannuation Discussion + market volatility

[tgh]

But also consider the psychology of being a "trust fund kid". I know of cases where they didn't bother doing any tertiary education, have no resilience, etc.

A real problem in the brave new entitled me world.
I guess the parents should inculcate some level of work ethic and a trust support structure geared to encourage enterprise and hard work should help.

 

[Quickstatus]

Apparently anything over $3mi

Im always skeptical when Guvment says this is good for you.

I contribution split my super and send the max 85% to Mrs QS as a way to balance our 2 super funds and maximise the various caps

 

[JohnK]

Thats was good lawyers are for

Is that lawyer or solicitor but I guess either will do the trick?

But also consider the psychology of being a "trust fund kid". I know of cases where they didn't bother doing any tertiary education, have no resilience, etc.

We're trying very hard to keep this information away from her but she may eventually work it out.

My brother and I have already decided that mum and dads house is going straight to my daughter as she is the only grandchild. We need to ensure that she can live there but not be able to dispose.

We've also decided that we will leave her with 1 investment unit each and she can enjoy the rents but cannot sell.

As for education who knows. I don't think she'll do sports. She's at least 3 years behind me in maths. I knew my 12x tables by the time I was 5 years old not that it means anything. Maybe fashion? Beauty and make-up? She looks to be very creative. Maybe doing something she enjoys. We'll wait and see.

 

[MARTINE]

Bill Gates said (I think)
Give them enough to do something but not so much they do nothing…. I like this approach.

 

[ellen10]

We have been visiting some friends in France
The French inheritance tax is 60%! So a lot of large homes cannot be handed down to the next generations. They have to be sold to pay the tax.
This is also happening to the wine estates, many cannot be handed down but sold to corporations, lots of Chinese buyers.

 

[TonyDoh]

We have been visiting some friends in France
The French inheritance tax is 60%!

It sounds like they are trying to take all the incentive out of dying! Their government needs to be careful or people will stop doing it.

 

[CaptJCool]

We have been visiting some friends in France
The French inheritance tax is 60%! So a lot of large homes cannot be handed down to the next generations. They have to be sold to pay the tax.
This is also happening to the wine estates, many cannot be handed down but sold to corporations, lots of Chinese buyers.

Calculation of Liability to French InheritanceTax in France

Information on the calculation of liability to inheritance tax in France

www.french-property.com

There are lower scaled rates for the surviving spouse and children

Siblings cop 45%

The 60% rate applies to “strangers”

Australia has no formal inheritance tax. However, there can be superannuation death taxes If the beneficiary is aged under 60. 22%

 

[tgh]

There is a lot of baby boomer money sloshing about and Guvmnt would like to increase their share.
An export income hiccup and it will be game on for the pr machine , I can hear it now...making the system fairer……puke...

 

[VPS]

We have been visiting some friends in France
The French inheritance tax is 60%! So a lot of large homes cannot be handed down to the next generations. They have to be sold to pay the tax.
This is also happening to the wine estates, many cannot be handed down but sold to corporations, lots of Chinese buyers.

I had an inheritance from an English friend who owned a house in France. You need to have a French and English will and you have to pay the tax before you can inhabit the house. The English bit was done in about 8 months - the French bit nearly two years. I think the fees for the French notaire and the tax almost completely gobbled up the money the house made

 

[Quickstatus]

There is a lot of baby boomer money sloshing about

Also the reason why inflation is still high

 

[SYD]

Also the reason why inflation is still high

The jury’s still out on that. Yes, pensioners have opened their wallets after years of low interest rates and home dining on Spam but power prices are up regardless.

The Gov’s $300 power rebate will directly lower that component of CPI but there will no doubt be some unintended consequences.

 

[Quickstatus]

unintended consequences.

Yes Money is fungible.

It would be not be pensioners spending like an inheritance tax is coming but other Boomers who are now experiencing higher incomes from high interest rates/ rents/ etc etc.

 

[Happy Dude]

The jury’s still out on that. Yes, pensioners have opened their wallets after years of low interest rates and home dining on Spam but power prices are up regardless.

The Gov’s $300 power rebate will directly lower that component of CPI but there will no doubt be some unintended consequences.

I've had two mortgage brokers and even Daniel Ziffer (or however it's spelled) on ABC finance said that boomers, who tend to be in stable and well paid jobs and no housing issues (ie not renting, mortgage under control or own PPoR, own IP with bumper rent now coming in) are spending quite freely. They're likely to have solar panels so power bills don't bite either. My dad hasn't had a +ve bill for 10years. They'd have noticed higher prices at the supermarket and restaurant but whether that's slowing them down is conjecture. Just look at this website - seems like plenty of people have spare cash for 3x SCs fuelled candy runs. Renters and OO who purchased in the last, say, three years would be ones feeling the pinch. Business as usual for everyone else.

 

[Mogul]

As a small business owner super was never really on the radar until 10 or so years ago. Being in our early to mid 40's and thoughts of when retirement might happen and how do we plan for it. Having just finished paying the house off we had spare cash without a real home for it. Took the plunge to buy some industrial properties and move the business into them, pay off our own mortgage rather than someone else's. This was all done outside of the super system in which we were told we were crazy to do, but here we are 10 years later and about to retire, if we purchased through our SMSF we couldn't have retired.

The super system is not for everyone.

 

[tgh]

The super system is not for everyone

There is a tipping point for most folks in terms of investment strategy.
Make enough money and the taxation seems unimportant.
Make less money and a low tax environment of super is very attractive

 

[JohnK]

The super system is not for everyone.

My brother retired in his late 30s early 40s with about $5000 in Super that he could not touch until he's 67 years or older.

He's not rich but he'd had enough and doesn't want more.

Governments should be looking to retire people earlier not later. Enough making the rich richer. Leave the cream for those that dont have. Quality of life drops remarkably after 70 years of age. So work your butt off, have this small fortune when you retire and then can't do anything.

I'll never forget my friend from golf who worked his butt off since he was 16-17 years old and retired at 65 years of age with half decent super balance. Bought a new car, helped his daughter and died at 70 years of age. What a waste.

 

[SYD]

My brother retired in his late 30s early 40s with about $5000 in Super that he could not touch until he's 67 years or older.

Which country is that? No one in Oz has to wait beyond 60 to access some sort of super if not working. But I guess being able to retire at ~40 yo wasn’t due to super.

Although I semi-retired at 55 (5yrs before preservation age) and taking the min super pension stream from 60 while still stuffing back in $30k pa, is all part of the game plan.

 

[CaptJCool]

As a small business owner


but here we are 10 years later and about to retire, if we purchased through our SMSF we couldn't have retired.

The super system is not for everyone.

That’s about tax arbitrage

Small business owners have a serious advantage with tax deductions

And tax rate 25%

Super tax 15%

Personal income tax 19% 30% 32.5% 37% 45%
Plus 2% medicare levy

 

[SYD]

That’s about tax arbitrage

Small business owners have a serious advantage with tax deductions

And tax rate 25%

Super tax 15%

Personal income tax 19% 30% 32.5% 37% 45%
Plus 2% medicare levy

To some extent but there’s no discounted CGT when it comes to appreciating capital investments? Flat tax from the ground up.

 

[CaptJCool]

Which country is that? No one in Oz has to wait beyond 60 to access some sort of super if not working. But I guess being able to retire at ~40 yo wasn’t due to super.

Although I semi-retired at 55 (5yrs before preservation age) and taking the min super pension stream from 60 while still stuffing back in $30k pa, is all part of the game plan.

Some DB schemes still allow access at 55 (54/11) or even earlier for redundancy

But these pensions are mainly taxed until preservation age = 60

The tax reductions at 60 are huge