Superannuation Discussion + market volatility

[lovetravellingoz]

I think Quickstatus meant what proportion of income would be replaced by annual pension (super + state (if applicable). Expenses should go down in retirement and much of the pension should be tax-free (so compared with net current income).
Personally I'm aiming to replace all except mortgage/life/disability insurance/regular savings/professional expenses at least.
Can't imagine we will change our spendthrift ways. And hopefully lots of travel by then

Effectively I will have more disposable income as I was consuming income on:

• Building wealth (including super)
• Paying Taxes
• Living costs
• Spend for fun

Whereas this will now be:

• Not building wealth (well ignoring the growth of investments)
• Not paying any significant tax (Franking may mean that I actually get refunded)

So the only things that I am now consuming income on is:

• Living costs
• Spend for fun

 

[andye]

The other expensive thing is children but I'm not counting my chickens that they will all be completely off the books

 

[lovetravellingoz]

The other expensive thing is children but I'm not counting my chickens that they will all+qq+ be completely off the books

Well you can decide if they are a Living Cost or Spend for fun

 

[NM]

Well you can decide if they are a Living Cost or Spend for fun

I put it into the Paying Taxes category

 

[tgh]

Spending for fun opportunities have been truncated somewhat of late, while the markets have given most funds a decent boost.
Inevitably the funds with excess will be burgled by the feds for social needs.

 

[andye]

Spending for fun opportunities have been truncated somewhat of late, while the markets have given most funds a decent boost.
Inevitably the funds with excess will be burgled by the feds for social needs.

I'd be surprised if they do. It would make the franking credits uproar look minuscule. Politicians like their own pensions too so difficult to craft legislation that won't impact them.

(As an aside and in my view the super system is one of the best legislative differences between the UK and Australia. Also means so many Australians are financially literate as they are invested)

 

[CaptJCool]

Age Pension Calculator | Noel Whittaker

www.noelwhittaker.com.au

from this accounting income (which includes all tax-free super (less 10% from vague memory for defined benefits) thresholds above which one is ineligible for age pension.....
COUPLE $86,185


SINGLE $54,210

 

[lovetravellingoz]

Also means so many Australians are financially literate as they are invested)

"Skin in the game"

 

[Quickstatus]

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

if you follow the 4% rule you need 25 times the amount you want each year

Interesting rule of thumb.

I think Quickstatus meant what proportion of income would be replaced by annual pension

That age old question…
The proportion of current income replaced by super to ensure a comfortable living.

ASFA says $63k pa per couple for comfortable post retirement

 

[Quickstatus]

COUPLE $86,185

Basically that means that if lifelong super is expected to return an annual annuity of less than that amount , there is little point of turbocharging super contributions above the statutory amounts.

 

[CaptJCool]

Basically that means that if lifelong super is expected to return an annual annuity of less than that amount , there is little point of turbocharging super contributions above the statutory amounts.

And remember Age pension is accounting income
comm seniors health care card is taxable income which means majority on tax-free super are eligible

 

[Quickstatus]

And remember…

Can you rephrase please thanks

 

[Quickstatus]

you need 25 times the amount you want each year.

Basically that means that if lifelong super is expected to return an annual annuity of less than that amount

Basically = super balance of $2M according to @Buzzard
Likely also many will find their tax rate to be not much different to the 15% super entry tax

 

[Buzzard]

Basically = super balance of $2M according to @Buzzard
Likely also many will find their tax rate to be not much different to the 15% super entry tax

That's correct. 4% of $2M is $80k.

 

[cove]

With inflation over the next 25 years you might want to up your numbers @Buzzard.
Probably ok because i do see 80 plus year olds spending less in my group of friends. With travel expenses mostly stalled now is a very good time to save a bit more.

 

[CaptJCool]

Can you rephrase please thanks

To be eligible for Age Pension, pretty much any earnings are included in the income test, including all tax-free superannuation income streams, and for former public servants, 90% of defined benefits income streams. This is what I call “accounting income”

to be eligible for the Comm Seniors health care card, it’s age pension age and only what’s included on an income tax return, so all the tax-free super, and any other exempt income is completely excluded. It means many, many self-funded retirees are eligible, even where ineligible for age pension. This is what I call “taxable income”

 

[lovetravellingoz]

To be eligible for Age Pension, pretty much any earnings are included in the income test, including all tax-free superannuation income streams, and for former public servants, 90% of defined benefits income streams. This is what I call “accounting income”

to be eligible for the Comm Seniors health care card, it’s age pension age and only what’s included on an income tax return, so all the tax-free super, and any other exempt income is completely excluded. It means many, many self-funded retirees are eligible, even where ineligible for age pension. This is what I call “taxable income”

So reading just now, the other key thing for many also would be that there is no assets test.

Who can get a Commonwealth Seniors Health Card - Commonwealth Seniors Health Card - Services Australia

You can get a Commonwealth Seniors Health Card if you meet certain criteria.

www.servicesaustralia.gov.au

 

[OZDUCK]

So reading just now, the other key thing for many also would be that there is no assets test.

Who can get a Commonwealth Seniors Health Card - Commonwealth Seniors Health Card - Services Australia

You can get a Commonwealth Seniors Health Card if you meet certain criteria.

www.servicesaustralia.gov.au

We got the Health Card last year after the government reduced the deeming rates. There was no assets test just an income one which included my Public Service pension plus deemed income from our bank accounts, super etc. But no worries about car values, chattels etc.

 

[lovetravellingoz]

We got the Health Card last year after the government reduced the deeming rates. There was no assets test just an income one which included my Public Service pension plus deemed income from our bank accounts, super etc. But no worries about car values, chattels etc.

I was more thinking about for example an investment portfolio of shares. So that asset is not counted, just the income from it.

 

[OZDUCK]

I was more thinking about for example an investment portfolio of shares. So that asset is not counted, just the income from it.

As far as I am aware, yes. We had to provide copies of our Tax Returns which showed the income from our, few, shares but not a listing of any shares.