Superannuation Discussion + market volatility

[CaptJCool]

The key seems to be mental competence as the rest can be bought.
Cognitive decline is likely difficult to manage when you are the subject.
Having someone dress me, clean me, feed me while someone else plays with my money seems a fate little better than death

Having seen a male friend decline into immobility rather rapidly and still of very sound mind was despairing. And he had a good social network but once he accepted that he need “sell the house” he passed quickly

Then my fathers decline
Mild cognitive impairment means “slow recall” like can recognise famous figures
Dementia means “no recall” don’t even remember any of them and family members too
Parkinson’s is treatable as it’s the loss of the dopamine production that can be replaced through medication which stops the shaking and stabilises the living

The other issue for men in their 80s is many have no idea about meal preparation aside BBQs because they had a partner to do all that…

 

[Pushka]

I didn't know that, a big plus.
Home care assistance is a wonderful thing keeping people out of sad (>60% have depression unsurprisingly) end of life institutions. I'd enthusiastically use super to fund/co-fund that, unfortunately the package is inefficient, the actual worker's payment being only ⅓ of the $ paid to the provider (in my inlaw's experience).

The Covid lock up process for residential care was enough to make me ensure I never set foot in one again. (My mother was in residential care for 18 months). Given these residents were never going to get better, nor exit other than permanently, it was cruel and inhumane to prevent their only contact with loved ones at the end.

 

[CaptJCool]

I didn't know that, a big plus.
Home care assistance is a wonderful thing keeping people out of sad (>60% have depression unsurprisingly) end of life institutions. I'd enthusiastically use super to fund/co-fund that, unfortunately the package is inefficient, the actual worker's payment being only ⅓ of the $ paid to the provider (in my inlaw's experience).

It’s awful how the case provider and care management fees extract a capped 35% (legislated by this Govt) out of the home care packages. And then there’s the hourly charge rates that extract further profit out of the packages.
Oh wait sounds like the earn and burn levers held by airlines.

Given the means tested assessment
This means on a level 5 package one receives 6 hours of care a week. That’s right. For $53,000 annual spend you receive a mere 310 hours

That’s an hourly charge rate of $170
it’s profiteering getting someone else to be “your booking agent”. But often necessary when you “are unable to do it yourself”

All manner of BS is peddled
Oh but you don’t need to pay for the one-Orf modifications at home
Blah blah blah
I’ve heard lots of excuses to dress up lipstick on the pig

So my friend paid $150 to get 5 hours cleaning a week independently. And once swung onto the package paid $200 a week to get 6 hours of cleaning
By then he couldn’t reach into the bottom of his washing machine to get the clothes out. The top loader is an awful design for the infirmed

 

[Pushka]

It’s awful how the case provider and care management fees extract a capped 35% (legislated by this Govt) out of the home care packages. And then there’s the hourly charge rates that extract further profit out of the packages.
Oh wait sounds like the earn and burn levers held by airlines.

Given the means tested assessment
This means on a level 5 package one receives 6 hours of care a week. That’s right. For $53,000 annual spend you receive a mere 310 hours

That’s an hourly charge rate of $170
it’s profiteering getting someone else to be “your booking agent”. But often necessary when you “are unable to do it yourself”

All manner of BS is peddled
Oh but you don’t need to pay for the one-Orf modifications at home
Blah blah blah
I’ve heard lots of excuses to dress up lipstick on the pig

So my friend paid $150 to get 5 hours cleaning a week independently. And once swung onto the package paid $200 a week to get 6 hours of cleaning
By then he couldn’t reach into the bottom of his washing machine to get the clothes out. The top loader is an awful design for the infirmed

Washing machines in general. They are too heavy to go on top of another cupboard so you need to be able to bend low to get the front loader clothing in and out.

 

[andye]

We found 'Still Alice' to be one of the most confronting movies we've watched.

Spoiler: Won't spoil for those who haven't seen it

Makes one want to start to plan, which she had done but was prevented at the last minute from fulfilling and the moment was lost. That character did have issues to resolve but if there are none, well, I'd make sure the plan was followed through.

Dementia isn't a reason for assisted dying is it? It should be but I guess there's an issue in assessing recovery but then it can't be assessed until it's too late when consent can't be given.

You have to be capacitous at the time to be eligible for voluntary assisted dying so no.
There is nothing to stop you making up an Advanced Care Directive, while you are capacitous, to say you don't want any life-prolonging treatment (e.g antibiotics) when you do get incapacitous dementia. Needs to be carefully worded (e.g you'd probably want broken bones treated to avoid pain) and best to discuss with loved ones so they are not shocked that you could die from a potentially medically-treatable condition

 

[tgh]

Gosh this is an awful subject.. and on friday 13th too…..

 

[Pushka]

You have to be capacitous at the time to be eligible for voluntary assisted dying so no.
There is nothing to stop you making up an Advanced Care Directive, while you are capacitous, to say you don't want any life-prolonging treatment (e.g antibiotics) when you do get incapacitous dementia. Needs to be carefully worded (e.g you'd probably want broken bones treated to avoid pain) and best to discuss with loved ones so they are not shocked that you could die from a potentially medically-treatable condition

Yes and we've done that but in the case of dementia you'd have to decide to have something in place before you reached that stage but because you hadn't reached end stage then likely not eligible. When you are eligible it's too late. Life prolonging treatment is already in our directive but that isn't the issue with dementia.

Mum had a directive in place and I didn't realise prior that if she dropped while I was with her on an outing, then that meant she didn't want me to try to resuscitate her. A couple of years later I was the one to invoke her directive when she had a stroke at the nursing home and I was asked if I wanted to enact it as per her directive. Guess they didn't want to make the decision even though they had all the paperwork to do so.

 

[Brissy1]

JohnK started this thread so here's an idea:

For far less than the cost of RAD, 6 of us have a cluster of new houses built in northern Thailand, include onsite accommodation for carer, with others coming in daily to cook/clean. I love Thai food. We're coming @JohnK!

 

[Pushka]

JohnK started this thread so here's an idea:

For far less than the cost of RAD, 6 of us have a cluster of new houses built in northern Thailand, include onsite accommodation for carer, with others coming in daily to cook/clean. I love Thai food. We're coming JohnK!

Or Bali? But food not as nice as wonderful Thai food and which we are having tonight. Before dementia sets in

 

[lovestotravel]

JohnK started this thread so here's an idea:

For far less than the cost of RAD, 6 of us have a cluster of new houses built in northern Thailand, include onsite accommodation for carer, with others coming in daily to cook/clean. I love Thai food. We're coming JohnK!

Put me down as well, but not for another 30 years at least

 

[CaptJCool]

Yes
And the way a couples directives are written up AND the power of attorney and authority to enter a public hospital as a private patient are all issues that fall apart upon real life

While events can be foreseen, the impact of directives don’t get road-tested ahead of time so they fell apart when my parents and I got COVID. Dad got really sick and his POA vests with mum who was not permitted near the hospital

My sister and I had staged an intervention but she didn’t have his POA. She signed the paperwork but legally it’s not valid. So the hospital couldn’t bill the private health fund. We had to retrieve the paperwork and until we did, the hospital wouldnt act. Once it was supplied, they followed dad’s wishes (no artificial ventilation, pumped full of anti-virals and whatnot) and he lived to tell the tale. (The guy in the next bed died within the week of old age but I could see it was the reality when I was visiting)

Thats made for mess - And conflict

 

[andye]

Yes and we've done that but in the case of dementia you'd have to decide to have something in place before you reached that stage but because you hadn't reached end stage then likely not eligible. When you are eligible it's too late. Life prolonging treatment is already in our directive but that isn't the issue with dementia.

Mum had a directive in place and I didn't realise prior that if she dropped while I was with her on an outing, then that meant she didn't want me to try to resuscitate her. A couple of years later I was the one to invoke her directive when she had a stroke at the nursing home and I was asked if I wanted to enact it as per her directive. Guess they didn't want to make the decision even though they had all the paperwork to do so.

There's a lot of community angst around "not for resuscitation" but the fact of the matter is that it's almost never effective in frail people. It's important in sudden witnessed cardiac arrhythmia, drowning, some trauma and overdose but in someone who loses cardiac output when ill for a non-cardiac reason, it rarely works.

My view is that if you really want to reduce your chances of ending up bedbound in aged care, you should document in advance that you wouldn't want drips and antibiotics if you go on to develop incapacitous dementia but are still mobile and at home. At that stage, there is often a lot of preserved personality and its really hard for families (and doctors) to decline ostensibly simple treatment. It also avoids doctors being suspicious that families are denying treatment for nefarious purposes.

 

[tgh]

It's not just friday the 13 , it's morbid Friday the 13th

 

[MARTINE]

It gets back to one of the other threads (not sure which) where reality based communication is needed between family/carers etc.
In my life as a former dr and experience of family/friends much conflict arises in the area of end of life dignified care between family members. A dying parent brings together the good,the bad and the ugly. The latter can force opinions about ‘keep alive at all costs’ against known documented wishes of the individual (and their family). Many times this person has had the least involvement in their loved one’s care.
Many families don't speak about these things long before frailty, choose not to speak about the inevitable reality or just cannot. The conflict in life gets expressed tenfold in death

 

[JessicaTam]

[mod hat]
Back to the (slightly cheerier) superannuation discussion please.
[/mod hat]

 

[andye]

Apologies if this is a really dumb SMSF question but I'm embarking on this soon.

I realise that there is a 15% (with discount to ~°10% if held for over a year) tax on gains in accumulation phase

However, what constitutes a gain?

E.g
Say I buy 100 shares at $100 each. After a year, the shares are worth $120 each and I receive $2/share in dividend

I presumably pay 15% on the dividend but do I have to pay any tax on the increase in share value if I don't actually sell them?

 

[CaptJCool]

Apologies if this is a really dumb SMSF question but I'm embarking on this soon.

I realise that there is a 15% (with discount to ~°10% if held for over a year) tax on gains in accumulation phase

However, what constitutes a gain?

E.g
Say I buy 100 shares at $100 each. After a year, the shares are worth $120 each and I receive $2/share in dividend

I presumably pay 15% on the dividend but do I have to pay any tax on the increase in share value if I don't actually sell them?

These are two different things

Dividends are taxed as income with the 30% franking credit so you may well end up with a refund

While you own the shares there’s no capital gains tax. This is only calculated once you sell the shares

 

[andye]

These are two different things

Dividends are taxed as income with the 30% franking credit so you may well end up with a refund

While you own the shares there’s no capital gains tax. This is only calculated once you sell the shares

That was my impression logically but thanks for confirmation

So am I right that if you hold the shares until you convert to pension phase, the gains in share price don't end up getting taxed at all (seems to go against the prevailing view that returns are ~15% higher in pension than accumulation).

A couple of follow ons:
1. Does it make a difference to the dividend taxation if you opt to reinvest the dividend in that company shares rather than take the cash?
2. Is it any different if you invest directly in an ETF or other managed fund during accumulation? Presumably the fund managers are buying and selling the underlying shares all the time

 

[Quickstatus]

Does it make a difference to the dividend taxation if you opt to reinvest the dividend in that company shares rather than take the cash?

Any dividend reinvestment plan is deemed to be dividend paid in $$$ then the $$$ net of tax is then used to purchase further shares
They are just a tool by the company to entice (often with a bit of a discount on the "reinvestment" price) shareholders to give it more capital

 

[CaptJCool]

That was my impression logically but thanks for confirmation

So am I right that if you hold the shares until you convert to pension phase, the gains in share price don't end up getting taxed at all (seems to go against the prevailing view that returns are ~15% higher in pension than accumulation).

A couple of follow ons:
1. Does it make a difference to the dividend taxation if you opt to reinvest the dividend in that company shares rather than take the cash?
2. Is it any different if you invest directly in an ETF or other managed fund during accumulation? Presumably the fund managers are buying and selling the underlying shares all the time

Dividend reinvestment plans | Australian Taxation Office

How tax applies to your dividend if you use it to buy more shares from the same company.

www.ato.gov.au

As for the ETF, it’s an investment group and they pay you an after tax earnings - they as the shareholder get the benefit of the franking credits - you are a unit holder

ATO is here to help first-time share and ETF investors | Australian Taxation Office

The Australian Taxation Office (ATO) is supporting first-time share and Exchange Traded Funds (ETF) investors to lodge their tax returns and avoid errors that can delay tax refunds. First-time investors often misunderstand their tax obligations in relation to reporting capital gains from the...

www.ato.gov.au

The explanation there is helpful