Superannuation Discussion + market volatility

[SYD]

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

I have one. (But quite modest from a past life).

 

[Pushka]

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.

I'm one of those boomers and am horrified at how prices have soared for my staples. I know I've cut back. It worries me the impact of mortgage rates on younger people and the fall out from that - higher house prices and rentals. I don't get any satisfaction whatsoever from higher interest rates on savings etc as I know what this means for the children and grandchildren. I do not know how families with children manage health care costs and everything else.

 

[JohnK]

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.

Here in Australia. I guess you're right he can grab his money in 3 years time.

 

[burmans]

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.

Hard to disagree. I know there is a desire to make it easier on kids than we had it ourselves but there is plenty of evidence that beyond ensuring they are well setup (education sorted, deposit on a house) money really doesn’t buy a lot more happiness. Way to many examples (and research) on rich kids and the fact it brings problems as well as solutions!

 

[ellen10]

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

Yes the French system is very complicated and tied up in legal strings.
I have read that if a spouse dies the property idies not automatically go to the remaining spouse. But a portion to children as well.

 

[Happy Dude]

I'm one of those boomers and am horrified at how prices have soared for my staples. I know I've cut back. It worries me the impact of mortgage rates on younger people and the fall out from that - higher house prices and rentals. I don't get any satisfaction whatsoever from higher interest rates on savings etc as I know what this means for the children and grandchildren. I do not know how families with children manage health care costs and everything else.

I'm Gen X with two kids less than 13. Honestly, healthcare isn't on our radar when it comes to budgeting but we're all relatively healthy. We've cut back on red meat because that's rather expensive even when on "special". We've also noted that dairy products have increased a lot but we still buy plenty of it. We haven't made any other cutbacks really. We did decide to not attend a family party in MEL next month as the airfares alone would have been $2k, coming from CBR. Not feeling the cost of living crunch that much, but we have no housing issues (other than VIC Land Tax skyrocketting but that's for another thread). No doubt whatsoever our kids will rely on intergenerational wealth transfer for housing.

 

[CaptJCool]

And December 2023 figures have 5,000 less Age Pensioners with a further reduction of new entrants by 22,000 (and this before any final uplift of Age pension age to 67 enables 6 months worth of backlog cases to be assessed after 1 Jan 2024)
On 1 July 2023, the eligibility age increased from 66 years and 6 months to 67 years (for anyone born after 31 December 1956)


View attachment 373057

And we know the backlog is going to take 4-6 months to process as there’ll be say 35,000 plus applications all coming in on day one on top of the ordinary half yearly volume of 35-40,000
Doubled the volume by shifting the eligibility date to 67…

well March 2024 figures have arrived
2,582,990

Net increase of 2,910

DSS Benefit and Payment Recipient Demographics - quarterly data - Expanded DSS Benefit and Payment Recipient Demographics - March 2024 - data.gov.au

Expanded DSS Benefit and Payment Recipient Demographics - March 2024

data.gov.au

Age Pension recipients by state and territory by age group, March 2024


State 66-69 70-74 75-79 80-84 85-89 90 + Total
Total 337350 687520 648345 460040 288250 161485 2582990


even on those figures its 10,000 less entering from 66-69 even though there was a BACKLOG OF 6 MONTHS
Some 195,000 people became age eligible yet the net increase is under 3,000

 

[Pushka]

well March 2024 figures have arrived
2,582,990

Net increase of 2,910

DSS Benefit and Payment Recipient Demographics - quarterly data - Expanded DSS Benefit and Payment Recipient Demographics - March 2024 - data.gov.au

Expanded DSS Benefit and Payment Recipient Demographics - March 2024

data.gov.au

Age Pension recipients by state and territory by age group, March 2024


State 66-69 70-74 75-79 80-84 85-89 90 + Total
Total 337350 687520 648345 460040 288250 161485 2582990


even on those figures its 10,000 less entering from 66-69 even though there was a BACKLOG OF 6 MONTHS
Some 195,000 people became age eligible yet the net increase is under 3,000

none of my peers even come close to meeting the pension requirements.

 

[MARTINE]

none of my peers even come close to meeting the pension requirements.

agree
No one in my group will ever get it

 

[CaptJCool]

agree
No one in my group will ever get it

That’s as much because those finishing up their working careers now have been working 32 plus years and contributing to Super or SMSF for the entire time
And inheritances tend to begin after age 50
Plus by 1992 the workforce gender

 

[Brissy1]

well March 2024 figures have arrived
2,582,990

Net increase of 2,910

DSS Benefit and Payment Recipient Demographics - quarterly data - Expanded DSS Benefit and Payment Recipient Demographics - March 2024 - data.gov.au

Expanded DSS Benefit and Payment Recipient Demographics - March 2024

data.gov.au

Age Pension recipients by state and territory by age group, March 2024


State 66-69 70-74 75-79 80-84 85-89 90 + Total
Total 337350 687520 648345 460040 288250 161485 2582990


even on those figures its 10,000 less entering from 66-69 even though there was a BACKLOG OF 6 MONTHS
Some 195,000 people became age eligible yet the net increase is under 3,000

So it would be easy to conclude that the au compulsory superannuation system reduces age pension payments. But is it the major factor? And at what cost? Every generation is more wealthy and current retirees are often inheriting, and the beneficiary size (children) is reducing...1 house or RAD refund will often result in ineligibility for pension.

(I feel sorry for young workers trying to save for a house but at the same time having to have 11% of their salary put into a retirement fund, but that's OT I suppose)

Fascinating stuff in that link, more age pension recipients than of course for multiple reasons, but not really in the NT. Can't think why it is so.

 

[CaptJCool]

Fascinating stuff in that link, more age pension recipients than of course for multiple reasons, but not really in the NT. Can't think why it is so.

Life expectancy is higher for ladies
They live longer

State based life expectancy is eye opening
The regional remote capital city splits are even more eye opening

highest for males in Sydney - Baulkham Hills and Hawkesbury (85.7 years)
highest for females in Sydney - North Sydney and Hornsby (88.2 years)
lowest for both males and females in Northern Territory - Outback (71.6 years and 75.8 years).

Life expectancy, 2020 - 2022

Statistics about life tables and life expectancy at birth estimates for Australia, states and territories and sub-state regions.

www.abs.gov.au

 

[Buzzard]

agree
No one in my group will ever get it

I've tried to convince +1 that I need to buy a few motorbikes so we will become pension eligible.

 

[Brissy1]

Life expectancy is higher for ladies
They live longer

State based life expectancy is eye opening
The regional remote capital city splits are even more eye opening

highest for males in Sydney - Baulkham Hills and Hawkesbury (85.7 years)
highest for females in Sydney - North Sydney and Hornsby (88.2 years)
lowest for both males and females in Northern Territory - Outback (71.6 years and 75.8 years).

Life expectancy, 2020 - 2022

Statistics about life tables and life expectancy at birth estimates for Australia, states and territories and sub-state regions.

www.abs.gov.au

Yes; so I can't understand why the male/female pension ratio is about equal in the NT (4½ vrs 8½ years on pension). Demographic movement...older female migration interstate? Unlikely, would have to be a lot. Just unusual.
Probably not relevant to AFF members!

 

[cove]

Well @Buzzard you could get some fine wines and we could come over enmasse to help you with making the stuff rare.
We won’t get the age pension and we are not worried about it.

 

[Quickstatus]

Age pension can kick in once super exhausted. If cars are played correctly this can be when discretionary expenditure is no longer possible.

(Edit ...cards...)

 

[MARTINE]

Age pension can kick in once super exhausted. If cars are played correctly this can be when discretionary expenditure is no longer possible.

… the hour before the ECG goes _____________________

 

[RooFlyer]

EoFY. Just marked my SMSF and other stuff to market CoB on Friday. Relieved to see that the fund has increased in value over the year, notwithstanding a big year for travel and deposits paid for the coming year's travel & airfares. The gin supply is assured!

My SMSF is bank heavy, especially CBA.

 

[RooFlyer]

OK! My new fave read (AFR) agrees (sorry, paywall and the ladder no longer climbs it)

This year’s winners were hiding in plain sight

If you could have sacked your fund manager for 12 months and put it all in bank shares – one of them, two of them, three or all four, take your pick – you’d be laughing.

The big four’s share prices all finished up 20 per cent or more for the financial year, and paid dividends on top. The benchmark S&P/ASX 200, even though it was fuelled by the big banks, gained 7.8 per cent.

 

[burmans]

OK! My new fave read (AFR) agrees (sorry, paywall and the ladder no longer climbs it)

This year’s winners were hiding in plain sight

If you could have sacked your fund manager for 12 months and put it all in bank shares – one of them, two of them, three or all four, take your pick – you’d be laughing.

The big four’s share prices all finished up 20 per cent or more for the financial year, and paid dividends on top. The benchmark S&P/ASX 200, even though it was fuelled by the big banks, gained 7.8 per cent.

Yes, despite all those saying the banks are overvalued they keep going up. I did sell a relatively small %ge of my CBA shares recently but glad it was not more now.