Retirees suffer!

[casstony]

The difficulty with predicting future returns is that the whole world financial system has been corrupted to an extent not seen in generations, if ever. Markets could be in for devastating falls as problems associated with excessive debt/easy money/malinvestment become insurmountable, or governments could go for broke with more printing and borrowing to keep upward pressure on markets for a while longer.

The current trend for the US share market (and therefore our shares) is down and that's likely to continue unless there's government support in the form of another round of quantitative easing and falling interest rates, IMHO.

The sensible business cycle including periodic recessions to keep economies healthy was abandoned a few decades ago it seems.

[AndrewJ]

Gday Morton

I'm genuinely curious - when you say the current system doesn't cater for that scenario, what would you like the system to do?

The current "semi privatised" system means each "individual" is subject to the vagaries of the state of the market ( and their particular fund ).
If we believe the guff that over the long term, things average out, then we need something that holds the funds of all people, and will pay out an "average" amount, probably based on amount input over time, irrespective of the short term fluctuations.
The govt "forces" us to invest in super, and many people have no real idea of what then happens in the background, so why should one person who has paid say 200,000 into a super fund that is badly managed lose 100,00 or more due to a short term blip in the markets, with no hope of recovering over time????

Thats what the old govt pension scheme was supposed to do, but somehow, all the money got spent on other stuff first.


Andrew

[alpal]

Originally Posted by AndrewJ

Gday Morton


The current "semi privatised" system means each "individual" is subject to the vagaries of the state of the market ( and their particular fund ).
If we believe the guff that over the long term, things average out, then we need something that holds the funds of all people, and will pay out an "average" amount, probably based on amount input over time, irrespective of the short term fluctuations.
The govt "forces" us to invest in super, and many people have no real idea of what then happens in the background, so why should one person who has paid say 200,000 into a super fund that is badly managed lose 100,00 or more due to a short term blip in the markets, with no hope of recovering over time????

Thats what the old govt pension scheme was supposed to do, but somehow, all the money got spent on other stuff first.


Andrew

I'm in capital guaranteed with Aussie Super so
the above can't happen - theoretically.

[MortonH]

The other problem is that everyone is living for longer. The Govt age pension is a "guaranteed" amount per year for the lifetime of the individual. The cost of providing that amount for longer and longer periods of time as longevity increases is a huge burden on resources, which is why the pension age has been increased.

In the future there is no doubt that the Govt pension will disappear as it's just too expensive.

The reasons that super is "forced" on individuals is to reduce reliance on the Govt pension and to ensure people have some money set aside for their retirement.

The idea that the Govt somehow can hold the money and pay out an "average" return regardless of actual market performance won't work. It just becomes another liability in the budget.

[MortonH]

Originally Posted by alpal

I'm in capital guaranteed with Aussie Super so
the above can't happen - theoretically.

There are plenty of capital guaranteed products but if everyone was in one we'd be complaining that the returns were too low when markets did well. For some it may be the way to go, however.

[AndrewJ]

I'm in capital guaranteed with Aussie Super so
the above can't happen - theoretically.

Im sure the investors in Barings bank ( etc ) thought the same :-)
I doubt anyone really knows whats happening in the background for any of these entities, in these days of automated trading etc.

The idea that the Govt somehow can hold the money and pay out an "average" return regardless of actual market performance won't work.

If this were true, insurance companies would not be able to make a profit.
It also means that the doctrine that the markets will average out over time is also a lie
ie in the past, if you lived long enough, you got a pension, if you died early, you didnt get paid out, ( but the govt kept all you had paid in ),
It was a swings and round abouts lottery.

Andrew
who as noted earlier has as little as possible in super.

[alpal]

Originally Posted by MortonH

There are plenty of capital guaranteed products but if everyone was in one we'd be complaining that the returns were too low when markets did well. For some it may be the way to go, however.

If I thought the markets would do well
I'd transfer some over to the bourse.

I have heard only doom & gloom since 2008 & that GFC.
In some ways we haven't recovered from it &
the resource boom has long ended e.g
with BHP at just over $15 when it was $48 not so long ago.

[Chee]

Putting money into super for your old age is not a sure thing.
The share market is just another casino. Our ASX hit 6500 prior to the 2008 GFC. Over the past subsequent eight years, it only recovered to 5600 and since then gone down to 5000 points again. it look like, the ASX will have no gain for ten years. All these adverts
about growing your super nest eggs is just a mirage, just to get your money in.
Mum and dads and retirees are the big losers while fund managements, and the big four banks are the big winners.
How can they lose, when they continue to collect their fees, even during the rainy days, when they lose your money?

[bugeater (Marty)]

Originally Posted by MortonH

There are plenty of capital guaranteed products but if everyone was in one we'd be complaining that the returns were too low when markets did well. For some it may be the way to go, however.

I think this is part of the problem. People aren't willing to accept the lower returns that come with lower risk options, so end up with their super in inappropriately risky options.

Originally Posted by Chee

Putting money into super for your old age is not a sure thing.
The share market is just another casino. Our ASX hit 6500 prior to the 2008 GFC. Over the past subsequent eight years, it only recovered to 5600 and since then gone down to 5000 points again. it look like, the ASX will have no gain for ten years. All these adverts
about growing your super nest eggs is just a mirage, just to get your money in.
Mum and dads and retirees are the big losers while fund managements, and the big four banks are the big winners.
How can they lose, when they continue to collect their fees, even during the rainy days, when they lose your money?

Your super should be in much, much more than just listed equities. Plus you have to remember than the GFC was a particularly brutal event by historical standards, even though Australia seemed to come through mostly unscathed (thanks China!). Plus I doubt the numbers you are quoting include dividends, which makes quite a difference.

[Renato1 (Renato)]

Originally Posted by MortonH

"Long term" to me means 20+ years traditionally. Looking at an 11-year period that contained a GFC isn't representative.

However, if you believe another GFC is around the corner as some suggest, and then consider the possibility that markets may never return to pre-GFC stability, then you might consider it reasonable to adopt your own definition of "long term".

I recollect reading where the US share market took around 30 years to recover from the 1929 crash. Which sort of had me wondering if that period was included in the statistics about long term returns of the share markets.
Regards,
Renato

[multiweb (Marc)]

That's bound to throw another spanner in how money management is going to work in the future especially for people who need to save. Few countries have started. It's going to be interesting.

[sn1987a (Barry)]

I don't see any point.

Billions of dollars and massive amounts of brain power are now being thrown at the race for general AI. A few more breakthroughs and the whole thing will go exponential.

No one's going to have a job, it's Universal Basic Income for everyone or bust.

[Chee]

Very true.
Robotic maids will be the next big thing and I dare say, every household will have a couple or two. They will do all your household chores. They will be able to cook, do the washing, vacuum and tidy up, wash your car, do the gardening , mind the kids and even be your body guard.
That is, provided, we don' t kill off humanity by empowering robotic soldiers, the likes of terminators.
Assuming, we are wise enough to recognize the threat pose by AI and speak out against those, who are pouring billions of dollars into developing robotic killers!
Life will be so much more easy. No more mundane chores when you retires.

[bojan]

Isaac Asimov's "Three Laws of Robotics"

1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
2. A robot must obey orders given it by human beings except where such orders would conflict with the First Law.
3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

http://io9.gizmodo.com/why-asimovs-t...-us-1553665410

[raymo]

I don't think that life would be all sweetness and light [as the old saying goes], if all work was done by robots. A few highly motivated geniuses
could continue their research unhindered by every day chores, but the rest of us would have to find things to do all day every day for a lifetime.
raymo

[Neutronstar (T)]

Originally Posted by Chee

Robotic maids will be the next big thing and I dare say, every household will have a couple or two. They will do all your household chores. They will be able to cook, do the washing, vacuum and tidy up, wash your car, do the gardening , mind the kids ...

But what about Robot Retirement. Who will pay for that?
We'll need Robot Superannuation now.

[RickS (Rick)]

Originally Posted by raymo

the rest of us would have to find things to do all day every day for a lifetime.

Fortunately, we have the Internet now and can spend our time arguing with strangers and posting pictures of cats

[alpal]

Hi Guys,
I wanted to find out how I could get hold of some of my super for a retirement income.
I can do so as I was born before 1 July 1960 – 30 June 1961
see here:
https://www.australiansuper.com/reti...liansuper.aspx

but you won’t believe this -
there is a 56 page document of terms & conditions & heaps of laws & fees etc

https://www.australiansuper.com/~/me...Statement.ashx


wow – they make it so hard.
You can’t just use your super like a bank account & make a small withdrawal every few weeks.

This is all sounding like a con job as they make it complicated & grab heaps of fees & charges on the way.
Before the age of 60 the Govt. is right in there grabbing tax as well!


Allan

[Renato1 (Renato)]

Originally Posted by alpal

wow – they make it so hard.
You can’t just use your super like a bank account & make a small withdrawal every few weeks.

Allan

Well - actually yes and no, and it depends on the type of superannuation you had, whether it was from pre-tax money or post tax money, or combinations of each. I have allocated pensions, some of which I would have to pay 15% tax on withdrawals (so I don't withdraw) and others on which I don't initially have to pay the tax, but on which I eventually have to do so on part of it because of earnings (though there is a tax-free threshold on that, though I still have to pay the Medicare levy on it).

Regards,
Renato

[Chee]

The share market is headed for a ship wreak!
Those nearing retirement or retired, with superannuations or a share portfolio wil be having sleepless nights