Superannuation Discussion + market volatility

[love_the_life]

well I don’t like seeing red - no-one does unless they are a masochis_, but you have to just stay calm and remember it’s a cycle.

We do have some steady income from a property and I think Mr FM might continue with his 50 hours a month consultancy for a bit longer and maybe no extravagant trips planned for 2020. Might be time to spend a year decluttering the house instead!

You and the words ‘no extravagant trips planned’ don’t quite go together
I thought you had already done a lot of culling in the house.

 

[Flying mermaid]

You and the words ‘no extravagant trips planned’ don’t quite go together
I thought you had already done a lot of culling in the house.

Yes well that shows you the carnage on the share market doesn't it We had already planned a quiet 2020, as we seem to be doing a lot of travelling in 18/19, but I am going extra cautious.

We have culled masses - multiple skips to the tip, plus St Vinnies, Officeworks (they take old computers and printers) and others. However there is a lot still to do. I cant believe what hoarders we were. Its all come to a halt with Ms FM and the grand puppies - I cant think straight from one day to the next at the moment (not to mention, we have an extra household of furniture and goods cluttering up the place!)

 

[tgh]

I am not thinking of cancelling our '19 travels just yet.
All we have atm is a correction, has to be a lot worse than that before I start digging.

 

[lovetravellingoz]

@Pushka why are you accepting 1.5% when you can get 2.87% at call on a savings account?

Isn't a case of interest within super is very low interest (though tax free or at 15%) vs higher interest outside super but taxed at your marginal rate?

Though if one is retired without much income that marginal rate may well be 0%..

 

[Flying mermaid]

I am not thinking of cancelling our '19 travels just yet.
All we have atm is a correction, has to be a lot worse than that before I start digging.

Certainly not canceling 2019 trips, but with trips to Antarctica, New York and Fiji already booked between now and August, I might just take a breather for 2020 until I see how things go.

 

[Cossie]

I've told the boss that she may have to go back to work to pay for my rally trips. What she said can't be repeated here.

 

[love_the_life]

I've told the boss that she may have to go back to work to pay for my rally trips. What she said can't be repeated here.

And why don't I believe you?

 

[love_the_life]

Certainly not canceling 2019 trips, but with trips to Antarctica, New York and Fiji already booked between now and August, I might just take a breather for 2020 until I see how things go.

Well a breather for a month or two I bet.

 

[Buzzard]

Isn't a case of interest within super is very low interest (though tax free or at 15%) vs higher interest outside super but taxed at your marginal rate?

Though if one is retired without much income that marginal rate may well be 0%..

We keep our 2/3 years of living expenses in said high interest saver. No longer in the workforce we pay no tax.

 

[Jacques Vert]

well I don’t like seeing red - no-one does

I disagree.

'Tis a time to buy more....

 

[Flying mermaid]

That is usually my attitude - I bought heavily in 2008/9 and it turned out very well. Unfortunately once you are retired, it gets a bit harder. I am already as fully invested in shares as it is prudent to be, so at this point in my life I just sit and watch. I have friends who are still working, who are acting like kids in a lolly shop at the moment....so many opportunities....

 

[JohnK]

Super down....again. Sigh

Who sneezed this time? I've just increased my salary sacrifice to get closer to $25000/pa. Wonder if there'll be any left in 6 years!

 

[Pushka]

Who sneezed this time? I've just increased my salary sacrifice to get closer to $25000/pa. Wonder if there'll be any left in 6 years!

Remember that limit must include the SG of 9.5% contribution made by your employer.

 

[Flying mermaid]

Who sneezed this time? I've just increased my salary sacrifice to get closer to $25000/pa. Wonder if there'll be any left in 6 years!

I think in 6 years you will be pretty safe that it will be in an upswing again

 

[JohnK]

No it was totally random dumb luck. Which is why I understand JohnK when he speaks of the share market in terms of gambling.

I can't see how it can be anything other than gambling. You hope that shares will continue to pay divindends and share value will increase.

The all ordinary index was 6700+ in 2008 and currently 5700+ although 6400+ not that long ago. Those numbers are not very positive. Don't forget it fell to below 3300 in Feb 2009. Difficult to pick the peaks and troughs but if you're ready to retire or already in retirement that's a huge hit.

P.S. I don't have an answer.

 

[andye]

I can't see how it can be anything other than gambling. You hope that shares will continue to pay divindends and share value will increase.

The all ordinary index was 6700+ in 2008 and currently 5700+ although 6400+ not that long ago. Those numbers are not very positive. Don't forget it fell to below 3300 in Feb 2009. Difficult to pick the peaks and troughs but if you're ready to retire or already in retirement that's a huge hit.

P.S. I don't have an answer.

Those figures are ignoring the dividends earned and reinvested along the way. In retirement and with a 4% withdrawal rate, a good balanced share-based fund should continue to grow over time even allowing for troughs. Likely to be able to withdraw a bit more if aiming to have little left in 90s

 

[serfty]

P.S. I don't have an answer

The answer is to buy @ 3300 and sell @ 6700

What was the question?

 

[andye]

The slightly easier thing to do is not sell at 3300

 

[amaroo]

Some good news.... lifted from the Oz

Good news for self-managed funds as campaign to ban SMSF property borrowing appears to stall

The nation’s biggest super funds look to have lost a key campaign aimed at banning the right of self funded super operators to borrow for property, a rare slice of good news for the Self Managed Super Fund sector that has been under pressure throughout the last year.

SMSF funds have been fighting to retain the right to borrow after David Murray — now chairman of AMP — directly recommended the practice be outlawed in his financial inquiry report in 2014. Murray has been concerned SMSF borrowing could destabilise both the housing market and the wider economy.

But the all-powerful Council of Financial Regulators has offered the sector a new lease of life indicating no apparent appetite to quash the practice in its statement which points out that “near term risks have reduced with the shift in dynamics in the housing market”.

 

[Flying mermaid]

Some good news.... lifted from the Oz

I have always felt it was not right to borrow for property in your super fund. Quite happy to borrow outside it, but we have always bought property outright in the fund. I think it is fine if you know what you are doing, but there are too many people where the property sharks have dudded them. You can still buy a dud property when you don't borrow, but it is all magnified with borrowing and it is for retirement.