Superannuation Discussion + market volatility

[lovetravellingoz]

Better get that gap loaded up to bring you up to the top level then!

You cannot. Once you are in pension phase you cannot bring more money in.

 

[kpc]

Only started reading this thread today. I have maxed out my voluntary (post tax) contributions to my Super. The only thing going in now is my 10% work contribution . When I retire (hopefully in < 10 years), what happens to the amount in excess of 1.7 million that I TF to the pension phase? Can I leave it where it is and it continues to grow? Is that taxed.? If I spend all the 1.7 million in the pension phase can I TF more in?

 

[Quickstatus]

Better get that gap loaded up to bring you up to the top level then!

Once you load, the cap is set in stone and will never go up.

Except in cases of partial loading
The portion that does not get loaded is proportionately eligible for the % indexation raise

At least that’s how I understand it.
But due to taxation differences it may better to load to 100% if there are funds for it.

 

[Flashback]

Super is an interesting thing, right?

I have always worked for myself and never really seen a need - trying to work out why that's better than just having your own investment pot etc. However, in the UK you can do carry forward for 4 years (similar to what's been mentioned here) so in the last 2 years I've dumped in £200k. That way, at least if I fall off the perch then Mrs FB has a good chunk of dosh added to her pot. Am I missing something else? Why lock money away when you can spend it.......

 

[Quickstatus]

When I retire (hopefully in < 10 years), what happens to the amount in excess of 1.7 million that I TF to the pension phase?

I asked this earlier - see post subsequent to this : (post #1824)

Superannuation Discussion + market volatility

Well I’ve got probably another 20-25 years worth of working life ahead of me! Early retirement plans aside… @Denali - can you share where you got that infographic from. I’d read about the delays but in a dry boring legislative update and would love to send that one on to my HR guys. It was in...

www.australianfrequentflyer.com.au

 

[lovetravellingoz]

I asked this earlier - see post subsequent to this : (post #1824)

Superannuation Discussion + market volatility

Well I’ve got probably another 20-25 years worth of working life ahead of me! Early retirement plans aside… @Denali - can you share where you got that infographic from. I’d read about the delays but in a dry boring legislative update and would love to send that one on to my HR guys. It was in...

www.australianfrequentflyer.com.au

Note that the $1.7 million Cap will go up again. It has just gone up from $1.6 million.

The new cap is then relevant for people who enter after that cap increase. However once money is in, it is is and if your money in your fund outperforms then you go above the limit but all the money still earns at the tax free rate. ie The limit is not enforced on increases, just on transfered in amounts.

But it only goes up in $100K increments linked to the CPI, and due to that the next jump may not be for 2 to to 4 years. It all depends on the CPI increase.

 

[Quickstatus]

Why lock money away when you can spend it.......

The $$$ is taxed less inside Super compared with outside

***The $$$ is generally not available to creditors especially in bankruptcy.***

Locking away means the $$$ is not used for discretionary spending

Can be excellent investment vehicle.
I am Averaging > 11% pa since the GFC without doing much and the fees are nominal (industry super fund).

Who wants to be on the Age Pension?

It’s interesting though - the amount of super necessary to replace the Age Pension completely for life. Anyone done the calculations? Im told it’s about $700k?

If projected super is going to be unable to replace the Age Pension - maybe better to spend it. Though many say you can supplement the Age Pension but I have not investigated this as it is academic for me given my super balance

 

[Flashback]

Meanwhile in the UK, certain CPI increases have been frozen...... part of austerity measures basically.

 

[kpc]

Based on my reading of the last 2-3 pages my Super seems sorted now....now to work out what to do with the rest of my $$ instead of donating to Canberra!

 

[Flashback]

Based on my reading of the last 2-3 pages my Super seems sorted now....now to work out what to do with the rest of my $$ instead of donating to Canberra!

Sounds like a good position to be in.

 

[Quickstatus]

As a %, how much of aftertax income are people aiming to replace with super at retirement?

 

[Flashback]

As a %, how much of aftertax income are people aiming to replace with super at retirement?

All of it, or is it a trick question?

Only 30 years to go....

 

[Pushka]

Super is an interesting thing, right?

I have always worked for myself and never really seen a need - trying to work out why that's better than just having your own investment pot etc. However, in the UK you can do carry forward for 4 years (similar to what's been mentioned here) so in the last 2 years I've dumped in £200k. That way, at least if I fall off the perch then Mrs FB has a good chunk of dosh added to her pot. Am I missing something else? Why lock money away when you can spend it.......

The most annoying thing about super is that the rules keep changing.

 

[Flashback]

The most annoying thing about super is that the rules keep changing.

Par for the course, happens with anything tax related...

 

[andye]

The $$$ is taxed less inside Super compared with outside

***The $$$ is generally not available to creditors especially in bankruptcy.***

Locking away means the $$$ is not used for discretionary spending

Can be excellent investment vehicle.
I am Averaging > 11% pa since the GFC without doing much and the fees are nominal (industry super fund).

Who wants to be on the Age Pension?

It’s interesting though - the amount of super necessary to replace the Age Pension completely for life. Anyone done the calculations? Im told it’s about $700k?

If projected super is going to be unable to replace the Age Pension - maybe better to spend it. Though many say you can supplement the Age Pension but I have not investigated this as it is academic for me given my super balance

Depends on a few variables
This is my favourite calculator though

Welcome - Retirement Income Simulator

Find out how much you might have at retirement, how long it might last, and what you can do to prepare now.

supercalcs.com.au

 

[cove]

Superannuation is a very good idea if you are never going to qualify for an age pension. It is concessionally taxed at 15% so no 47% tax rate for high income earners.
Currently in retirement we are obliged to draw a percentage of the funds as a pension but it is not subject to further taxes.

 

[Pushka]

Par for the course, happens with anything tax related...

Especially when the Feds see the eye watering billions just sitting there. Likely super funds help to fund Jobkeeper et al.

Post automatically merged: Aug 14, 2021

Superannuation is a very good idea if you are never going to qualify for an age pension. It is concessionally taxed at 15% so no 47% tax rate for high income earners.
Currently in retirement we are obliged to draw a percentage of the funds as a pension but it is not subject to further taxes.

If you are still working do you have to draw down anything or is it that once started to draw down you can’t revert?

 

[Flashback]

Especially when the Feds see the eye watering billions just sitting there. Likely super funds help to fund Jobkeeper et al.

Post automatically merged: Aug 14, 2021

If you are still working do you have to draw down anything or is it that once started to draw down you can’t revert?

Billions? They mustn't be looking at my super then! Although, my Aussie one, as small as it is isn't doing too bad as I dumped it in the highest risk return. 20%+ most years.

 

[RooFlyer]

I have always worked for myself and never really seen a need - trying to work out why that's better than just having your own investment pot etc.

I was in the same boat, until about 15 years out from retirement (it ended up being 10 years ...) I paid a financial advisor 'fee for service' (ie no trailing commission on investments made) for a "tell me about Super.." report.

I then set up my SMSF and started transitioning investments from personal into the Fund and making new investments in the name of the fund. Along the way, a number of 'one-off' incentives to put $$ into Super were implemented by the Feds which enabled me to accelerate the process.

When I retired, age 58, it was there. A year before retirement, I got another 'fee for service' report from a new Financial Advisor on how to go about retirement the right way.

Am I missing something else? Why lock money away when you can spend it.......

I can't fault the second bit but the trick to Super here is those magic words ... 'tax free income'

 

[Flashback]

I was in the same boat, until about 15 years out from retirement (it ended up being 10 years ...) I paid a financial advisor 'fee for service' (ie no trailing commission on investments made) for a "tell me about Super.." report.

I then set up my SMSF and started transitioning investments from personal into the Fund and making new investments in the name of the fund. Along the way, a number of 'one-off' incentives to put $$ into Super were implemented by the Feds which enabled me to accellerate the process.

When I retired, age 58, it was there. A year before retirement, I got another 'fee for service' report from a new Financial Advisor on how to go about retirement the right way.



I can't fault the second bit but the trick to Super here is those magic words ... 'tax free income'

Merci beaucoup monsieur @RooFlyer - more or less aligns with my thinking. If you can sink in big sums rather than drip feeding it can work as well, albeit without the accumulated income.