Super Funds

This is what I’m in due to employer preference. It’s done ok. But this last little period has been rough like everyone else.

I mean I lost that money… the total went down.

You have kept your units in the fund. The unit price has decreased. You have only “lost” that money if you materialise it. Ie sell the units in the fund for the unit price today.

Most funds have decreased over the year. But that’s normal over the course of your working life that will probably happen 4-5 times to everyone. The rest of the years the balance will increase and overall beat inflation and offer a real return.

The reason people who don’t spend all their time managing their money pick a life stage style default option in their super is that it takes your date of birth and as you age puts your money into more and more defensive assets within your fund.

Those defensive assets are much less likely to lose real value(as much, everything can go down) but also are much less likely to gain in much value.

That’s the setting you want as you close into retirement to ensure your nest egg remains intact.(when you actually want the money to spend on living)

If you’re under the age of say 45-50 you want your money taking some risks. That means you will have some bad years but your good years will outweigh them and make your nest egg bigger.

It’s the opposite to how people act in real life. You seen the number of old people who buy buckets of lotto tickets and gamble? You don’t want to do that with your retirement r money when you’re old.(although unlike gambling the “risky” assets super invests in rarely go to zero like a used TAB slip or a lotto ticket with no winning numbers)

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Thanks! I feel a bit better now.

Fwiw Vanguard have all of the options a decent modern superannuation fund have including what I meant by lifecycle default MySuper option.(it’s not really that brilliant as their marketing suggests. MySuper is by law the default option for all new members of a MySuper fund. Which basically means they can just get say an employer nominate them and you know your getting low fees and appropriate asset allocation)

MySuper is law because the government doesn’t want ■■■■ loads of people losing their life savings to irresponsible fees and poor asset choice.

The blind spot in that is self managed super and in a really bad down turn could smash our economy somewhat(imho)

You may want to look up what MySuper actually is handypoint. It’s not what you are saying.

Mixing up too many concepts.

@Hoffy you PSS? I snuck in to Commonweatlh PSS, defined benefits. I can punch out between 55-60 years of age and take a lump sum and pension for life, lump sum, pension and preservation etc.

I’ve been contributing the maximum amount from I started because I have a chronic illness and knew my working life might be cut shot. Very grateful and lucky to be in this scheme.

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Yep, in PSS and thankful everyday. Although, I call them the golden handcuffs occasionally when I think about leaving.

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It’s exactly what I’m saying.

Default optioned fund for new members, low fee structure and they have a lifecycle option.

What’s misleading?

Here’s wiki which explains things better than me

Prior to the reforms sneaky (particularly retail super like the banks or your colonial/amps) fund would put you in a higher fee paying product. Now you must ask for it.

There are two reasons to stay and this is in the one of them.

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You’re out of date.

https://asic.gov.au/regulatory-resources/superannuation-funds/superannuation-guidance-relief-and-legislative-instruments/communicating-with-employees-about-choice-of-superannuation-fund-what-you-can-and-cannot-do/

Behind on what?

Since Gillard if you start a new job, take the default fund that default fund has to be a MySuper product.

Otherwise a superannuation fund is not a default product. Ie you need to nominate it.

What boat have I missed on the basics of super these days?

Your wording is all over the shop and doesn’t hold true in all circumstances.

Also read the employer obligations again. All employers ‘must’ have default nominated fund. If the employee doesn’t nominate, the employer must first confirm with the ATO that the employee doesn’t already have a previous super fund. If they do then the employer will pay to the existing fund (this was brought in to stop people having a new fund setup each time they are with a new employer with different my super options). If the employee doesn’t have existing super and the employer has confirmed that with the ATO only then does the funds get paid to the employers nominated default fund (which obviously has rules to which funds they are).

So MySuper has LOTS of different products. It’s not one product and they can be quite varied between the products. MySuper has a minimum specs guideline.

So, employer says Handypoint, do you have a super fund? If yes then you can nominate that fund. If you don’t want to use your existing fund then you need to nominate and setup the new account for it to go to and to inform the employer of these details.

If no, then the employer default fund can be used but only after confirming with the ATO that you don’t have any other existing super accounts.

If the employee doesn’t answer then the employer needs to check with ATO if you already have any form of super. If the answer to that is YES then the employer MUST pay to that existing fund. The only way the employee can now change that option is to setup first where they want it paid and then to complete their choice of super fund which then the employer can pay the money to.

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(i’m being technical)

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You will find the default strategy is a lifecycle strategy in MySuper. Every fund I’ve worked with operates this way. Yes you can change from that and invest slightly differently but most people don’t. And why would you unless you plan on retiring later than the preservation age.(when you can get the money and what the government keeps ■■■■■■■ us on)

When you start a new job your employer gives you a form when you either give your existing super info or take their default. Which must be the above.(MySuper compliant)

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You’d have to be doing pretty well for this to affect you…

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a long time strategy (down this way) has been for farmers to use cgt consessions to role their farm land into their superfund.

with farm prices skyrocketing in the past few years it wouldnt surprise me to see a good number of these be over that threshold.

edit, cancel that: as the farms are most of the time split between spouses theyll be right :man_facepalming:t2:

Ace wont be happy.

I would have made it 5 million. but semantics

yep 3 million will make it tricky for those that have business real property and or farmland held in superfunds, which is a pretty good strategy. tricky to do though unless you ahve a big super balance already.

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It affects less than 10,000 very wealthy. Ie the top 0.05 percent of Australians.

Yet the murdoch rags, LNP and then the muppets who read papers not policy get outraged.

Super above a cap should be taxed.

The super below the cap should be a reward for working your whole life and the payout not affect your aged pension.

Encouraging participation in the workforce for a better retirement.

Perhaps even only allowing contributions to come from payroll if thats what you want to do.

Then fund the pension properly.

So you have three groups of people:

  1. People who saved nothing for retirement but receive a living pension.

  2. Workers who receive that same pension plus their super payment(just tax effective savings from their pay)

  3. People who have done so well they are self funded and receive no pension. (But can take their super payment as much as group 2 along with what they have made outside of super)

And the capped super shouldnt be accessible by anyone else. Banks, marriage breakups, kids etc etc. its simply a workers reward for working and paying a lump of income tax along with it.

At present super can handicap your ability to get a proper pension. Which is why home ownership is so keenly sought after(not in assets test)

Superannuation up to a particular cap should be whats not included in said asset test.

This would be much fairer on those who cant afford to purchase a house throughout their workint lige to enable them to rent comfortably in retirement.

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The assets test is higher without a house, but only a couple hundred thousand from memory ($224,500), should probably be at least $500,000 these days.

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