Changes To Super for Retirees

Discussion in 'Superannuation' started by bax, Nov 30, 2011.

  1. bax

    bax New Member

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    Another of the many changes that is currently being considered by the Government, relates to the removal of the ability to withdraw Lump sums from SMSF's ( and probably other Funds).
    The reason behind this change is to prevent retirees from withdrawing lump sums from Super, and then going onto a Centrelink pension.
    This approach ensures that you receive all the Govt benefits like Health Care Card and the myriad of other concessions.
    So if you withdraw all lump sums and keep it in cash, or bullion, or wherever and your assessable assets fall within the guide lines, you can reduce the probability of Capital gains Tax and Death Taxes.

    The sad thing about many of these issues, is that nobody cares about it until it is too late.
    Most younger retirees, do not consider this part of Super, as they think that they will never get old.
     
  2. hiho

    hiho Active Member Silver Stacker

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    source?
     
  3. Yippe-Ki-Ya

    Yippe-Ki-Ya New Member

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    I've said all along - super is simply just another tax, and you'll never see most of it!

    It belongs to the GUBBERMINT - not to you - as long as you get that through ya thick skull its all hunky dory from then on in...
     
  4. mmm....shiney!

    mmm....shiney! Administrator Staff Member Silver Stacker

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    Thought you didn't pay CGT when you are over 60 and retired? And we don't pay death taxes in Oz. Don't we?
     
  5. nonrecourse

    nonrecourse Well-Known Member

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    Correct you don't pay CGT when in pension mode while your alive. But once you snuf it if your spouse doesn't have a binding death nomination or she dies before you and your kids are not dependent minors then effectively your super is not part of your estate and the robbin hoods are there to rape and pillage the beneficiaries with both CGT and virtual death duties.

    Kind Regards
    non recourse
     
  6. Matthew 26:14

    Matthew 26:14 New Member

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    15% of the returns during the pension phase are TAXED then the capital less the tax goes to beneficiaries.
     
  7. notanother

    notanother New Member

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    Precisely!

    When the old age pension was first introduced it was touted that it would match wages and everyone would retire in luxury. Has anyone observed the lifestyles of those on a basic old age pension these days?

    The super lie is no different as I see it. It was introduced (made compulsory) when interest rates on investments were 15% on average. The masses didn't question it because their greedy bone told them they would be rich! I remember when they changed the rules in 2005 and made it "Your Super, Your Choice". When I saw the info-commercials on the back of all the council buses I knew something was up? It was the blame shift time before the crash (well in advance it seems to us but those in power have longer timelines) The masses were so conditioned by 20+ years of control they just left the money where it was and took the hit in 2008. It takes time to study markets and the economy and most people are too busy working and watching TV.

    Self Managed is no different as I see it, still government controlled, can still be taxed to death or stolen outright. Self Managed, I believe, was primarily introduced as a vehicle to lure the last crop of lemmings into the property bubble. Now that wealth is doubly trapped and it is certainly not a liquid asset any more.

    What were people thinking? That real estate would double every 10 years? It took 20 years for the doubling up from 1950~1970 and for the 30 years prior RE prices fell, steadily. If you were alive in 1925, were aged 65 and retired with housing assets, you would not see break-even in price until you were aged 90. Plus you had government rent controls limiting your cash flow. (something being discussed by government right now). 90, you may as well be dead.

    Anyway it's nice to be part of the forum. My local coin dealer comes here so I thought I join and touch base with him. I began collecting PM's in 2004, just before the first leg up. Now I'm just sitting on the sidelines and watching because they have both gotten too expensive for my tastes.
     
  8. nonrecourse

    nonrecourse Well-Known Member

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    To Quote Oscar Wilde;What is a cynic? A man who knows the price of everything and the value of nothing

    I guess I'm just a stupid rich lemming because I set up an SMSF and also invested in property. So prey tell notanother where do you have your fortune parked if its not in an SMSF and its not in property? Have you speculated on the share market and now you cannot afford to buy anymore pm's?

    Kind Regards
    non recourse
     
  9. Lav

    Lav New Member

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    screw super! all the young people these days should work on building a strong asset base and converting it into something that provides a stable stream of cash. There's your super.

    Never rely on anyone for anything.
     
  10. notanother

    notanother New Member

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    Truth passes through 3 stages
    1/ It is ridiculed
    2/ It is vehemently denied
    3/ it is accepted as self-evident.

    We are well into stage 3/ with the stock markets now. I can recall not 6 months after the crash people telling me things like "yeah, you could see it coming" To which I replied "So you pulled your super out of stocks and into money markets?" They went silent at that point...
    Nearly everyone will tell you now that stocks are a terrible investment, even though they have half their super in them? It's a form of cognitive dissonance.

    We are in truth stage 2/ as far as real estate is concerned. 5 years ago people would have laughed at you if you said houses were a bad investment, you would have been a social pariah, driven out of dinner parties and BBQ's. Not today though, now people will debate and argue with you. But why? I only have to look at the US, Ireland, Spain, any number of countries to see the results of a doubling in house prices without a commensurate doubling in wages and salaries. And half the houses in Australia are in weak hands now, people who will put them on the market at the drop of a hat if they get scared enough. I saw it in 2007 when we had that big correction, every street was littered with For-sale signs.

    To answer your questions though, I don't regard myself as a cynic, just a realist. I am self-employed, have been for 20 odd years now. This allows me freedom from compulsory super as well as plenty of time to research global trends. This along with the great free advice from many contrarian investors on the net has allowed me to avoid the madness of the past 5 years unscathed. I don't have a fortune, just savings for retirement in PM's and cash, mostly in PM's, mostly bought back in 05, 06 and 08. I have nothing in the stock market, though I do plan to buy into uranium and gold shares after the stock market crashes to what I think is a bottom. I have property, undeveloped land up in the country, not of great value but owned outright. I think in 10 or so years when I plan to retire the country will be a better choice than the city.

    The secret of a happy retirement is to keep things in reality, not in the delusion world of the 2 bob millionaires who go out and buy brand new cars by drawing equity out of their house. One should plan to live below their current means and by this they will be pleasantly surprised when they find they have an excess of wealth in the future.

    But getting back to houses, the trouble with bubbles is that they are very hard to see from the inside. Especially when there are 5 TV shows telling you you're smart, when the government is throwing you bones like negative gearing and when the central bank sets interest rates at historic lows AND when all your friends and peers are clamoring to be millionaires as well by re-mortgaging their homes to buy investment properties.

    So you said "I guess I'm just a stupid rich lemming?" Well that depends on whether you have a realistic exit strategy for your investments. Every investment should be bought with an eye on selling it for the maximum gain, right timing. The trouble with most people speculating on houses is that their timing usually equates to "When I'm ready"or "When I feel I need the money". This assumes that
    a) Houses will always go up in my lifetime.
    b) Capital gains tax will remain low
    c) Interest rates will remain low until it's paid off
    d) I will have no long voids while paying it off.
    e) There wont be a crash like in America.
    f) All the immigrants will get high paying jobs and be able to afford my house.

    Truth is the smart money has already fled the property markets as was evidenced by the big sell off in established (held for years) unit complexes back in 04, 05. The writing was on the wall even then and although the markets gained until 07 those gains have been given back now.

    Secondly you must ask the question "Are you really a RICH lemming" The common calculation, namely generic Net Worth, is totally delusional unless you plan to sell your assets tomorrow. And even that doesn't usually account for taxes. One should include plunges in the price of assets, increases in the interest rates, possible loss of your job, in other words, real world factors like those facing millions of property speculators outside of Australia and Canada today.

    But of course, it can't happen here can it? "They" wouldn't let it happen here. Nor in a Canada! And definitely never like it happened in Japan!!
     
  11. nonrecourse

    nonrecourse Well-Known Member

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    The smart money has their paid out property titles in a bank vault along with their outstanding mortgage documents, bullion, trust deeds, current lease documents , medical and legal powers of attorney

    Kind Regards
    non recourse
     
  12. jnkmbx

    jnkmbx Well-Known Member

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    Let's hope it remains that way :)
     

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