Superannuation Discussion + market volatility

[tgh]

Wondering what kind of fees y'all pay and how much difference there is between the big funds , the boutique funds and the diy funds.

We are in the diy boat , so minimal costs, but looking at giving it all away to a manager.

 

[Pushka]

One thing about being self employed and in your sixties - working til ya drop. Although that wasnt the plan. But it does give me money to have nice holidays.

Waiting on last minute payments to see how much I can salary sacrifice this FY - lucky our SMSF is connected to our Business account so the transfer is instant.

 

[QF WP]

Yes, I needed to move money in to super quickly as I hit 65 in July and am not working. I wanted to have it sorted this FY even though there are a few weeks in July before the 'day'. Done

Glad to see you sorted it out this FY, although you do have the opportunity to make further personal (non-deductible) contributions next FY, based on the information you have supplied.

 

[QF WP]

Great info thanks again WP. He doesn't pay tax, so is it best if the small business is given his TFN or not, ... if there is a choice in that?

This comes to an area where I cannot give specific advice (tax) - best checked through an accountant

 

[casanovawa]

If you want to make a difference for your grandchildren, get them a TFN at birth, and if you are self employed, pay the grandchildren a small figure ($100) per year for doing SOMETHING and also up a low fee industry super account in their name. Contribute $1,000 to the superfund as a personal contribution and lodge a tax return for the grandchild. PRESTO- they will receive $500 super co contribution. We have 10 grandchildren and they are all "on the plane" with the this and they will all benefit later in life. My son who is now aged 28 started this aged about 13 and salary sacrifices a little also and has just over $200K in super.

Hmmm, my son is 11 and my sisters daughter is 5 or so... I guess there is no reason why she and I couldn't try something like this?

she has her own small business which i'm sure needs a bit of tidying up around the place...

Wouldn't be as big a nest egg as if started at birth, but might add up to something...

Any particular low fee super fund you have decided on burnt??

 

[burnt]

Hi Casanovawa,
It is actually fairly hard to find a fund that is willing to open an account for a "minor" but the one that I went with was Australian Super, i was able to join up online by loading g/kids details and TFN (used my email).
Incidently, just lodged last years returns for grand kids about 6 weeks ago and now they all have their $500 super co contribution. I love it when things go to plan.

 

[Deleted member]

Hmmm, my son is 11 and my sisters daughter is 5 or so... I guess there is no reason why she and I couldn't try something like this?

she has her own small business which i'm sure needs a bit of tidying up around the place...

Wouldn't be as big a nest egg as if started at birth, but might add up to something...

Any particular low fee super fund you have decided on burnt??

Use a bank RSA for now. Once you have a decent account balance then one can consider the options. But fees will be too high for a small non working a/c IMHO.

 

[Deleted member 29185]

I haven't read the whole script of this thread so please excuse me if this has been asked previously, but here goes:
I earn a fair chunk of my income in PNG, which is taxed in PNG and I pay into a super fund in PNG. I am however still an AU income earner and tax payer. There is no wonderful return on the super investment (2-4% I think), but the contributions are a full tax offset (PNG tax around 40% for me). The super is taxed at the full marginal tax rate if withdrawn within 5 years and 15% if withdrawn after 5 years but the big incentive is a 2% tax rate for withdrawals after 7 years.

I'm wondering about when I withdraw the super and want to move it to AU. Will the AU Gov't want to tax me on it?

 

[cove]

I am enjoying the tax free status with our superfund now. Recently I paid our last $5,250 contributions tax surcharges. I won't miss that.

 

[nickfromeastryde]

Any suggestions on finding a job I can "retire" from almost immediately. I have a full time role that I probably won't be leaving in the near future but would like to put my current super contributions into pension mode sooner rather than later so need to meet a condition of release. I am a long way from 65 but have hit my preservation age

I guess my real question is what constitutes a real job to be able to do this

 

[QF WP]

I haven't read the whole script of this thread so please excuse me if this has been asked previously, but here goes:
I earn a fair chunk of my income in PNG, which is taxed in PNG and I pay into a super fund in PNG. I am however still an AU income earner and tax payer. There is no wonderful return on the super investment (2-4% I think), but the contributions are a full tax offset (PNG tax around 40% for me). The super is taxed at the full marginal tax rate if withdrawn within 5 years and 15% if withdrawn after 5 years but the big incentive is a 2% tax rate for withdrawals after 7 years.

I'm wondering about when I withdraw the super and want to move it to AU. Will the AU Gov't want to tax me on it?

You may need to deal with a planner/accountant with specific international tax and cross-border super knowledge. Whilst Australia and PNG have a tax treaty, if you have withdrawn from the PNG super fund and it has become personal funds, there may not be any additional tax to pay in Australia.

As far as I know, there are no plans to allow for PNG to AUST or vv super transfers (like there are currently in place for NZ and were in place for England until they were ditched).

 

[QF WP]

Any suggestions on finding a job I can "retire" from almost immediately. I have a full time role that I probably won't be leaving in the near future but would like to put my current super contributions into pension mode sooner rather than later so need to meet a condition of release. I am a long way from 65 but have hit my preservation age

I guess my real question is what constitutes a real job to be able to do this

Will depend on a number of factors like what is your current age (as there are different rules if you are older than 56 but under age 60 [as I guess you are from your comment]; to those over age 60 but less than 65). In fact this article is an eye opener for many. This is the rule that you are seeking to use: https://www.superguide.com.au/accessing-superannuation/legal-ways-to-withdraw-your-super-benefits#2

Not in a position to give you specific advice, only general or factual.

 

[exceladdict]

With ING direct's super fee structure changing (adding a $60 plus 0.64% admin and 0.25%+ investment fee) at 30 June I thought it was a good time to review. I also seem to be being sent a message with three separate podcasts I listen to singing the praises of passive index funds. Jack Bogle seems to be on an online speaking tour.

Statements like "not many fund managers outperform the market average, especially when you take fees into account" now have me reconsidering semi-smsf options like Hostplus Choiceplus with fixed fees around $250pa with the thought of diverting a large portion to index ETFs with fees around 0.15-0.25%.

Questions for the brains trust:

• What additional risks would I be taking with something like the Vanguard Australian Shares Index (VAS) that I wouldn't already be exposed to?
• Would you consider indexes like this 'set and forget' or would you rebalance them yourself?
• Has anyone done anything similar and have pitfalls or stories to share?

Or perhaps more importantly: Am I falling for the 'think I know what I'm talking about' trap and I'd be better off in a generic balanced fund? Recent visits to a financial advisor with a relative reminded me that there's rarely a silver bullet, and that if something was really a fantastic deal everyone would be doing it.

 

[lovetravellingoz]

and that if something was really a fantastic deal everyone would be doing it.

When everyone is doing it, often that is an alarm bell for me.

 

[Jeffrey O'Neill]

With ING direct's super fee structure changing (adding a $60 plus 0.64% admin and 0.25%+ investment fee) at 30 June I thought it was a good time to review. I also seem to be being sent a message with three separate podcasts I listen to singing the praises of passive index funds. Jack Bogle seems to be on an online speaking tour.

Or perhaps more importantly: Am I falling for the 'think I know what I'm talking about' trap and I'd be better off in a generic balanced fund? Recent visits to a financial advisor with a relative reminded me that there's rarely a silver bullet, and that if something was really a fantastic deal everyone would be doing it.

I use mostly ETF in my SMSF (use esuperfund for the admin side of things).

Costs for ETFs are generally quite reasonable and I like being able to get diversity on the cheap.

It all depends on how much responsibility you want to take for the performance. The more you direct the investments the more you have to accept the results were your choice.

 

[Quickstatus]

With ING direct's super fee structure changing (adding a $60 plus 0.64% admin and 0.25%+ investment fee) at 30 June I thought it was a good time to review. I also seem to be being sent a message with three separate podcasts I listen to singing the praises of passive index funds. Jack Bogle seems to be on an online speaking tour.

Statements like "not many fund managers outperform the market average, especially when you take fees into account" now have me reconsidering semi-smsf options like Hostplus Choiceplus with fixed fees around $250pa with the thought of diverting a large portion to index ETFs with fees around 0.15-0.25%.

Questions for the brains trust:

• What additional risks would I be taking with something like the Vanguard Australian Shares Index (VAS) that I wouldn't already be exposed to?
• Would you consider indexes like this 'set and forget' or would you rebalance them yourself?
• Has anyone done anything similar and have pitfalls or stories to share?

Or perhaps more importantly: Am I falling for the 'think I know what I'm talking about' trap and I'd be better off in a generic balanced fund? Recent visits to a financial advisor with a relative reminded me that there's rarely a silver bullet, and that if something was really a fantastic deal everyone would be doing it.

If financial advisors are so good with money, why are they working for commissions?

 

[Quickstatus]

I note some of the industry super funds like Australian Super via their fund manager arm, IFM Investors put money into the build of an export LNG plant at Freeport TX USA - signed on the dotted line just before recent Hurricane Harvey.

 

[theblank]

Statements like "not many fund managers outperform the market average, especially when you take fees into account" now have me reconsidering semi-smsf options like Hostplus Choiceplus with fixed fees around $250pa with the thought of diverting a large portion to index ETFs with fees around 0.15-0.25%.

are you married, kids, working kids?

Going for an SMSF like eSuperfund has your total costs pa at ~$1000. If your super is above $100k then your fees are already below 1% and will progressively get lower over time. Plus if you have If you have two or more in your fund, that reduces the fees even further.

I am started to migrate most of my SMSF investments in to the likes of Wilson Asset Management LIC's, rather than look at ETF's and the like.

 

[exceladdict]

are you married, kids, working kids?

Going for an SMSF like eSuperfund has your total costs pa at ~$1000. If your super is above $100k then your fees are already below 1% and will progressively get lower over time. Plus if you have If you have two or more in your fund, that reduces the fees even further.

I am started to migrate most of my SMSF investments in to the likes of Wilson Asset Management LIC's, rather than look at ETF's and the like.

Not quite at a stage for an SMSF to be viable for me just yet. What's behind the choice for LICs - better returns?

 

[QF WP]

I am started to migrate most of my SMSF investments in to the likes of Wilson Asset Management LIC's, rather than look at ETF's and the like.

Similar to my father . Handy that he can ring up Geoff Wilson, Kate Thorley or Chris Stott for a chat about any of them. Secretly, I think he's got a soft spot for Kate