Retirees suffer!

[Merlin66 (Ken)]

http://www.abc.net.au/news/2016-01-2...shares/7114806

You do the right thing....put all you can over the years into Super, sell and downsize the house. No demands on the Government for Pensions/ Benefits.....
There's no more funds going into the box...it just gets smaller and things tighter.
Where does it make sense??????

[AndrewJ]

Gday Ken

put all you can over the years into Super

Not me
As soon as i learnt that i have no real control over my super, or where it goes, i stopped putting in any more than was legislated.
Anyone who believes their money will still be there in 15 years or so, and that they will be able to do with it what they want, is not facing reality.

Where does it make sense??????

It makes sense for the people who run the system, as they get to skim money off the side all the time. Nothing like a guaranteed feed.
The govt likes it, as it means they can pass the buck if the "private" super scheme runs out of money. Just too bad if you are in the fund that crashes.


Andrew

[bugeater (Marty)]

I've got one comment on that article. When you retire your superannuation does not suddenly stop generating a return. Positive or negative. Think on that.

[Merlin66 (Ken)]

marty,
The "positive" gains are our income!
The "negative" gains severely reduce the capital ( the box gets smaller)and hence further reduces the possible future "positive" gains (on a smaller box).

[bojan]

Well... we live in privatized society..

[Merlin66 (Ken)]

Yeah but....
If I'd pi$$$ away all the funds I'd be eligible for a Gov pension, medical rebates and subsidised transport.......

[glend (Glen)]

Originally Posted by bojan

Well... we live in privatized society..

Unless your one of the retired public servants on indexed defined benefit schemes. That is the real retirement graveyard train, and all the tax layer are paying for it. I know people in the Commonwealth Scheme that are making more in retirement than they did when they were working - thanks to defined benefits and indexing on top of indexing year after year.

[bugeater (Marty)]

For most people, if they didn't have equities in the first place, they wouldn't have had the money to lose in the first place. In fact they would be worse off overall (due to the strong long-term performance of equities). Funny thing is people tend to prefer this situation. It's called loss aversion.

[bojan]

Originally Posted by Merlin66

Yeah but....
If I'd pi$$$ away all the funds I'd be eligible for a Gov pension, medical rebates and subsidised transport.......

Exactly right.. but even then you (and me) will not live in any sort of luxury on Gov pension.. Regardless of all taxes paid during working life.

I think they should introduce compulsory euthanasia.. to put us out of all possible dilemmas and miseries

[AndrewJ]

Gday Bojan

Well... we live in privatized society..

I'd say partially privatised.
If we were truly privatised, then my taxes would be lower and i would not be "forced" to put money into govt legislated/controlled super system. The tradeoff would be no pension under any circumstances.

Currently, the govt still forces us to invest in a system that we may not want to, and has moved all the risks onto us at the same time.
Once a large pot of money is created this way, it just becomes a baitball for the predators who know the system.

Andrew

[bugeater (Marty)]

Originally Posted by AndrewJ

Once a large pot of money is created this way, it just becomes a baitball for the predators who know the system.

You mean like those pushing self-managed super funds perhaps?

[AndrewJ]

Gday Marty

I mean ALL the financial advisors, accountants, traders, lawyers, govt depts, bankers etc who "run" any of the systems.
Self managed funds might be good ( choice of investment wise ) for some wealthier people, but the yearly compliance costs are way over the top ( for whats involved ) for many to make it work.
When i got made redundant, i parked my super in a cash only holding account ( ie super equivalent of a bank bill ) till i found a better deal.
The "fees" each year were equivalent to half the after tax income?????
How much overhead is there for managing a bank bill?????

I reckon a lot of it comes down to a simple economic fact
Skimming 10$ off 10million people each year wouldnt be noticed
but try taking $10million off 10 people and they will fight tooth and nail

The system runs on the fact that there is so much money there, and its moving around so fast, that "most" people dont notice when a bit gets removed along the way.

Andrew

[casstony]

The complaints generated in this thread stem from a lack of understanding of markets and finance in general.

My super has been in cash since before the crash in 2008, so I've missed the downturns and rises in the sharemarket. Overall people invested in shares have done better than I over time but now complain when they have a negative year. The smartest people had their money out of shares 6 months ago and will put it back in after the (probable) coming crash.

There's no point complaining about financial returns if you haven't taken the time to study how things work. My mistake in 2008 was in believing that governments and central banks would operate our financial systems with our long term interests in mind (the boom since then should not have happened since it is founded on debt and malinvestment) but I'm wiser now

[rrussell1962]

I've just read the article in the first post. Unless I am missing something doesn't it simply illustrate why superannuation funds offer a range of investment options ranging from higher risk potentially higher but more volatile returns to lower risk options with lower returns. One major issue is that most of us simply let our super sit in the middling default option without any regard to our willingness to accept risk or our age. Casstony and Bugeater hit the nail on the head imho.

[doppler (Rick)]

Originally Posted by bojan

Exactly right.. but even then you (and me) will not live in any sort of luxury on Gov pension.. Regardless of all taxes paid during working life.

I think they should introduce compulsory euthanasia.. to put us out of all possible dilemmas and miseries

If they keep pushing up the retirement age the average joe will never get a pension or their super.

[Merlin66 (Ken)]

Glen,
Your crystal ball (and/or financial advisors) must be much better than mine - I lost over $500,000 in the 2007 crash which has never been made up.
Now, we are VERY conservative, and unfortunately get a low return......
Bottom line - how do you survive when retired without being a "burden" on the Gov.

[AndrewJ]

There's no point complaining about financial returns if you haven't taken the time to study how things work.

Agreed, but if i choose cash only options, why does a super fund pay far less than if i just went and got my own bank bill?????
( Hint, you have to pay their management fees and bonuses, which probably get ammortised across all the members, irrespective of the workload to manage their form of investment )

Another benefit of doing yr own bank bill is several of the larger banks will remove fees on all yr other accounts if you have a set amount invested with them. Being in a super fund removes that negotiation tool from the owner of the cash.
Its all skewed to have a guaranteed way to remove money from the investors.

Andrew

[jenchris (Jennifer)]

Mine's doing ok.
Partner and I have been living off the super of one of us plus a bit from a service pension. We have more now than we did three years ago.
We've also bought a new ute and other expensive sundries plus flown to Europe for 6 months each year.
We don't have a big super nest egg.
We're just not daft with our money.
Your super is quite flexible. You aren't tied into one direction and it costs nothing to go see your accountant advisor. He's already been paid.

[multiweb (Marc)]

There is always the option to manage your super money yourself. Any employer will pay super in a compliant fund. So you don't have to go with industry super funds. You can do your own thing as long as you audit it each year.

[gts055 (Mark)]

"Your crystal ball (and/or financial advisors) must be much better than mine - I lost over $500,000 in the 2007 crash which has never been made up."

Agree totally with your comments Ken. The saying that "shares improve over the long term" is very misleading. It all depends on the period of time and when the investment was made. Losses from 2007-2008 have not been recovered, and those living on their super after that crash will have suffered greatly. They have had to live the subsequent years drawing from a reduced superfund value. Picking time to cash in superfund/shares is guesswork at best. None of the big name financial "advisors" predicted the crash, yet that is supposedly their specialty. I have yet to hear just one financial expert tell me what the market is going to do tomorrow. They are all experts on history Mark