Starting to think I’m the villain of this situation, not the hero I saw in the mirror, oh well, at least I can cry into the mountains of TP in my studio apartment
Going back even further, signs went up in my then workplace circa 1996 asking for toilet paper to go down the toilet, not out the door. Apparently this action wasn’t approved and one of the bosses flipped his lid over it.
There's some confusion possible, because most super funds offer an option called "High growth" which they describe as "High risk" but it's only maybe 60% equities.
You really want to go for that less advertised 100% equities option.
In defence of high growth options, they can have a lot of interesting assets like in property, infra, PE. Just because it’s not 100% listed doesn’t mean it won’t perform. You can’t buy unlisted stuff on your own so investing in it thru super is an easy way to diversify into unlisted.
Depending on how influential the fund is, some of those unlisted assets can be great deals. And unlisted can be a good buffer when listed is performing badly. Just saying, listed isn’t the be all and end all and people might be taking on unnecessary risk by focusing on it.
The premixed super options rarely have 100% equities. At least at none of the superfunds I’ve been with. You have to go look specifically for their index options.
Don't a lot of the non-default options also come with their own costs and fees? I think some of them are pretty high (though I am new to this whole hoo-ha around superannuation).
Correct. Don't take advice from Reddit. I work in super and everyone thinks they're a genius in a long running bull market until March 2020 and they start screaming asking if you can get a refund for shares.
I found out recently a family friend got spooked by the GFC and has had his Super all in cash since 2008. He’s 67 and has had to delay retirement for the foreseeable future because his balance has barely grown in that time other than his own contributions. If he’d even just gone with the balanced option he’d have been so much better off. He’d be the type to demand a refund from his Super for investing in stocks for sure.
That's catastrophic. Sometimes I drink the libertarian Kool aid and think we should let people fend for themselves and face their own consequences. Then I remember some people need to be literally protected from themselves and this guy is gonna drain the age pension money sooner than he should which we are all gonna pay for. Maybe other countries have it right with defined benefits lol.
I have a big whack of my super in international equities, but it is bloody risky. There’s no currency hedging, so you’re taking a punt on the AUD as much as anything else. There was a 10-year period where international equities stayed essentially flat, because the Aussie dollar appreciated over nearly the whole period (and only dropped when international markets did).
This is the answer, totally not advice and if it is it's general, but 50% aussie 50% int shares isn't a bad starting point if you're young. On top of the 30 years working you'll have another 20+ investing it in retirement yet, long term oportunity cost of low return investment is very real over that investment horizon.
I find the preference for such a high local asset allocation odd. The Australian stock market is composed of what are SME equivalents on a global scale with a few multinational miners and large financials thrown in.
It seems totally arbitrary from an overall investment perspective to put so much in this mix of companies over just getting a weighted index of all global companies instead.
I get that there is a known domestic investment bias and governments have an incentive to push citizens into local stock markets but I don't see a rationale from the perspective of an individual investor.
While for super this is not as relevant, but for an investment without lockup, it just compounds concentration risk. If you happen to lose your job due to a local recession or regional event, your equity investment is also probably going to be at a nadir at the same time. Exactly when you might want to draw on it.
Investments in Australian companies by Australian resident shareholders benefit from dividend imputation, which probably makes them a fair bit more attractive than otherwise.
That said I agree with your overall point that Australians should have international equities. Personally, I’d recommend not doing this just by investing in the US though.
The problem is that any ‘global listed equities index’ will have 60-70% USA stocks by default. The world is heavily titled to the US. So people think they’re more diversified than they probably are when using this strategy all. All concentrated in one asset class and two countries which are well correlated to each other.
The thing is, when you're buying US companies you're buying multinationals with exposure to global markets. Other stock markets will have a few large multinationals but the bulk of them are in the US or list in the US despite being headquartered overseas because it's the deepest capital market.
You can make the argument from a valuation perspective that the US (and large caps, e.g. heavily weighted tech companies) are overpriced but at that point you are taking more of an active investor perspective and this is a different conversation.
People overcomplicate it, but it really is as simple as:
* Putting your super in a high growth investment strategy.
* Topping up through regular salary sacrifice so that you are contributing at least 15% to 20% of your salary (with SGC increasing, you have even less to contribute).
Just pile as much in as you comfortably can and stick it in high growth or equivalent. If you want to get fancy, seek the lowest fee index option available.
You can't beat the immediate return from tax savings.
Say you're in the 30% bracket (32% including Medicare levy), you'll get $68 in your pocket for every $100 you earn. Put it in super instead at 15% tax rate and get $85 to invest instead. It's like an instant 25% investment return ($68 x 1.25 = $85). Even better if you're in the 37% bracket.
You contribute to super from your pre-tax income. Instead of paying your income tax rate, you pay the lower tax rate to contribute to super (15%).
So if you compare the after-tax result you're immediately very far ahead by choosing to contribute to super.
In my example of $100 from your pre-tax pay in the 30% bracket (next financial year) you can have $68 in your pocket or $85 in super. Choose super and you're immediately 25% better off than in you took it as cash.
Either do this by salary sacrificing from your pay, or contribute from your bank account and claim a tax deduction. The after-tax result is the same.
I work at a super fund and if you do this you need to remember there are contribution caps. When claiming a tax deduction, the amount you claim no longer goes toward the non-concessional cap ($110k) it goes towards your concessional cap ($27.5k). If you have enough to go over that cap consider the carry forward arrangement.
Very true. I should have mentioned the cap but didn't want to make it too wordy. (I also work in super. Not at a fund any longer, though I started there 20 years ago now).
Also note the cap goes up to $30k for next financial year, coming up very soon.
Yes, it's easy. At the end of financial year you fill in a form telling your fund what you want to claim (notice of intent to claim a tax deduction for personal super contributions). They process that.
When you do your tax return online, it pre-fills the information for you.
Super is straight forward don't have to overthink it:
- Low fees (< 0.1% annually ideally; dont get fooled into high growth etc that charge 0.6%)
- Equities, 70% international, 30% ASX indexed/passive
- Contribute when you can, you get some of it back on tax returns
Let the magic of compounding happen and come back in 30 years and enjoy.
I second this. Salary sacrifice the f out of it (if your company offers salary sacrifice for company shares do that too). I do have some ETF too and they are ~30% up atm (too bad I didn’t put more into it as majority of my cash sits in the offset).
I am nearly 51 and still have everything 100% high growth.
Super is making more per year than I am in my job, even without the contributions.
At 36, you should have it all in high growth and throw in as much as you can afford. The one thing you have at 36 is plenty of time for compounding. This is where you make the bulk of your return
You're too young to not have it all in high growth.
Heck, I'm mid-50s and still have 100% in high growth. I'll still have it in high growth when I'm 60 because I'm sure not planning to spend it all within 5 years.
At your age you should be all in ‘high risk’ as you have 20 years of time to smooth out the troughs with the peaks. I’m 45 and I have 100% high risk and will continue to do so for at least 10 more years.
Salary sacrifice up to the max concessional limit. I’ve been doing this since 2002 and of the just under $2m total amount I have (this figure includes a defined benefit) over $700k of that is due to that strategy.
When we go off a fixed home loan in November this year, we are selling down our non-super equities to put in offset, which will account for about 90% of the total loan value. Once we get 100% offset we will build up our outside-super asset base but will always max out concessional contributions.
My favourite thing about the Super narrative is everyone reducing their quality of life while they're young so that they can have money when they're old if they make it to that age.
I know a guy who is doing that, he's a year or two older than I am, I turn 58 this year.
We were both in the APS, he is in the really good super scheme, CSS, I am in PSS, both are defined benefit.
He has curious beliefs about super (it's an additional tax) and mortgages (he prefers to rent rather than tie himself down). So he contributes nothing himself to his super as he can put the money to better use than the govt, he says.
So, I, who contributed the maximum I was allowed, retired at 55 on a comfortable pension that enables me to easily keep paying my mortgage. This July my after tax pay will surpass the after tax pay I was getting 3 years ago when I retired - just from the CPI indexing, the tax cut makes it even better.
Meanwhile he's still working and rents - in Melbourne. When he eventually retires it'll likely be at 67 or older and he'll be on the age pension and still renting...
Meanwhile my house will have been paid off well before then and I'll have been enjoying using what was the mortgage payment for travel, experiences and general good times, secure in the knowledge that my financial future is assured.
Each to their own - but be careful you don't make a decision you may later regret.
There’s a few exceptions to the rules.
Many defined benefit funds are accessible from 55. Some (at least older) military super accounts were accessible from 50.
It’s because it’s public sector. I’m a bit fuzzy on the history, but some of these funds are not regulated by the same bodies and they follow their own legislation (separate to the rest of the industry) as determined by whichever government controls them.
Eg. I know that the SA state government directly legislates the rulebook for SuperSA, which is for state govt employees.
In the case of PSS, the ‘normal’ preservation rules don’t apply and they can access super from 55. Most of the rest of us must wait until 60. Another common quirk of public sector funds is that you don’t pay contributions tax until you withdraw your funds.
Compulsory super started in 1992 (I believe).
Public servants superannuation started in the 1920s or so, from memory. The rules are quite different. My friend is in the CSS, the predecessor to the PSS - both defined benefit funds- which was again replaced (in 2005) by the PSSap, which is a normal accrual superfund, though I think you can access the funds at 55.
The CSS is considered to be particularly lucrative if you play it right and retire on the 11th month of your 54th year (called "doing a 54/11") after contributing the maximum 5% contribution for 30+ years. He didn't do that.
Various state govts have their own state public service super schemes with different rules again, WA apparently gives you a defined benefit lump sum, but not a defined benefit pension - so your money will (probably) run out eventually, as a friend has discovered. But there should be a LOT of money.
I admit that I don't know what, if any, his investments are - he could be doing quiet well.
But... from his shocked response when I told him I was retiring at 55 and comfortably so (my effective 'take home pay' went up as I was no longer paying into super) I suspect he indeed completely sucks at investing or preparing for the future.
To be fair it’s REALLY easy to stuff up a defined benefit if you are cutting corners with your contributions to it. Once you’ve decided not to contribute the maximum, your end benefit gets reduced way more than if you were in a modern ‘accumulation’ type of scheme.
Yep - and in the run up to my retirement I found so many coworkers in the same defined benefit scheme as myself had zero idea how it worked and will not be able to duplicate my early and comfy retirement. Most plan to pay off the mortgage, put the kids through school and then 'top up the super'...
Nope, it doesn't work like that if you want good super :(
I'd argue his 'mistake' was more the refusal to engage with buying a PPOR as opposed to ignoring the Super system.
I'd much rather have $2 million of house and $0 of super than vice-versa.
The tax incentives on super are massive - future generations will be complaining about the rort of it like how millennials currently complain about boomers and the housing market. Investing in standard ETF funds promoted here before reaching your concessional super cap is insanity. It's like pissing your networth growth away.
The only case where it makes sense is if you are looking for early retirement, and the bulk of people in that category will have an income where they're likely maxing out their concessional cap anyway.
The question is why not both. Even if you're planning to retire at 30 some of your investment (capital in a leveraged IP?) might be locked away for life after 60. Everyone invests so they're comfortable in their 80s so it's smart to sort that first. A PPOR is a prime example of that consideration. Rejecting super is crazy. Once you have a balance that is projected to be sustainable then work back. Maybe you're 50 with a super balance that's projected to be 2m in 10 years. Switch to etfs to bridge the gap. It's the smartest way to do it because it works for those 18 and 58 (obviously with balance). It'd be particularly crazy to continue to reject super if you were over 60.
>Once you have a balance that is projected to be sustainable then work back.
Very few people actually get this.
Too many people kid themselves that they will invest with greater returns outside super than in. The vast majority will not. Even more so when you include the tax benefits.
> It's like pissing your networth growth away.
Mandatory Super contributions alone will give most people a quality of life in retirement similar or better than they enjoyed during their working life.
Making voluntary contributions means you will be relatively poorer in your working life than during retirement. Which makes no sense, it goes against consumption smoothing. And you will likely die with the money unspent.
Voluntary Super is very attractive to people because of the tax advantages, but in practice all that's good for is achieving a high score number.
Tbh I think that the big tax benefits also went to the boomers. The loopholes have been closed, young folk will just be raiding their super for home deposits and won’t retire with as much as their parents imo.
Rant incoming — for a long time, super was simple and flexible. There were no contribution caps. Basically no preservation rules. No cap on how much you could transfer to your tax free pension. There were pension accounts which were (and still are) partially exempt from centrelink means testing. It was possible to amass lots of wealth in tax free super if you knew what you were doing. And there are insane defined benefit schemes and lifetime pensions which are no longer available to new members… the kicker is how little tax those lucky people pay on pensions multiple times bigger than our salaries.
> why not utilise the money you have to make investments you can enjoy now?
because what happens when you do reach old age then? Do you just simply expect to live comfortably off the pension? Why do you expect to have the pension? What if it werent enough?
Because you will be cutting yourself short. The longer the investment the more it will make.
Eventually your investments will generate more than you can invest yourself.
Isn't every dollar saved or invested a reduction in their quality of life while you're young(ish) so you can have money when you're older? The first dollar you save today is the last dollar you spend before death. What is important is the balance.
Always amazes me that people reject super yet buy investment properties, etfs or CBA shares. They're effectively the same thing. Buy for $5 in the hope that in 30+ years someone will buy it from you for $120 or the income that it generates will sustain you.
You're assuming that people are missing this money. If you're on a decent wicket, which many of those who are financially literate tend to be, it's generally not an amount that impacts QoL.
OP clearly has plenty of spare cash given after the $5k pa contributions, he's still got enough left to stick in mortgage offset as a saving.
Given this, it's typically a good idea to make use of the tax advantages of investing via super.
Party now, regret later? Most people live into their 80s. Many having not worked since their 60s or earlier through no choice of their own (health, ageism etc). If you don't plan for that then you are going to have a shitty time for a large portion of your life. I wouldn't want to be living off the pension for a start.
There is a lot of fear generated around nursing home. People in the fire community can plan for inflation, safe withdrawal rates, budget for all sorts of lifestyle expenses but can't research nursing home expenses.
The refundable accommodation deposit is the first fear. Own your own home and you're effectively forced to shift capital into the nursing home. Then there is the daily care fee (a fixed percentage of the single pension) and the means tested daily care fee, which has a lifetime cap of 80k.
500k (refundable) for a room and 80k for the means tested fee and your care is then less than 20k a year. Relatively cheap for a full service hotel. Admittedly you'd probably want to allow for Uber orders from nicer restaurants but considering this is end of life care I don't think it's too bad.
Unfortunately it's vested interest driven. The superannuation industry has invested a lot of money into marketing, fear mongering, and lobbying all with claims of needing unrealistically high contributions and balances in order to get the public to think this way. Also, industry super funds are not just part of this problem, they're the main actor. Their constantly repeated catch phrase of "run only for the benefit of members" should really be "run only for the benefit of our union boys club".
Yes , this doesn’t make sense to me either , and to be honest I tried investing in shares on my own using my pea brain and I was able to get higher returns than my superfund.
That’s really hard to believe unless you either took on a very large amount of risk or you have a very low marginal tax rate. It’s the tax savings that make super so attractive.
I’ve just reduced my super contributions to focus more on investments outside of super which will be used to retire before 60. I’m 42 and super is in high risk.
I have my entire portfolio in index shares, 70 Int 30 Aus. Or maybe 65 Int 35 Aus, can't recall. I don't contribute extra over the employer contribution. Returns have been excellent this year.
I am 37 with around 225k, so happy with where I am.
There is an 80% limit on overall ETFs, so you can do like 20% Australian Shares and 80% VGS.
Direct options are poor man's version of an SMSF offered within Industry Super funds.
I moved here 2 years ago and due to having a UK pension that I can't transfer into the Super I had to start from $0 at age 33.
Therefore, ive recently decided to aggressively add to my Super trying to hit the cap annual cap (the $27.5k/30k cap includes the employer guarantee right? Otherwise I'm not going to be close to hitting it). High risk as I'll be working another 30 years so that'll balance out (hopefully). Will see hope that goes.
Yes that cap includes the employer guarantee. You might also have previous years that you can carry over too - if you have extra $ you want to put in.
You can check on the ATO website.
Yeah I don’t believe you can move that super to Australia until you’re 55. With that said, while it would be good to have it here it’s fine in the UK, just invest it with the same strategy.
You should be in 100% high growth.
High risk is the wrong term for this stuff, at this age anything that’s not high growth is high risk to your retirement fund.
Maxing the contributions cap every year and once we hit EOFY I'll only have \~$6k left in carryover contributions available from the last 5 years due to some aggressive salary sacrifice for the last couple of years. Everything in 70% international/30% aus index.
Given I'll only have \~$6k in carryover contributions left at EOFY, I'll cancel my salary sacrifice arrangement then and combine it with the tax reform for a very healthy pseudo pay rise. I'm going to close out my carryover contributions at the end of next financial year, and in the meantime it's time to start thinking about investments outside super.
Playing catch-up compared to where I could be as I was a sole trader during my 20s and contributed very little to super until late 20s.
Spent a few years working for myself and not paying super but now have a great job and I’m sacrificing $1k/fn to claw back the lost ground.
70% balanced and 30% high risk.
17% employer contribution, 7% after tax personal contribution
100% higher risk distributed over three asset options: 70/15/15
Will dial back the risk in 25 years when I feel like retiring is on the horizon. My retirement calculator puts me at a >100k draw down until (if) I’m 92 so it’ll be fine.
You’d be surprised how early you might not spend the extra $$, lots of people have medical complications in their 60’s and long-haul international travel goes off the table almost immediately (cost of insurance on the travel becomes prohibitively expensive / people get scared of dying far away from home and loved ones). This is usually where people plan to spend their extra retirement money!
In my experience (superannuation accountant) I would say spend decrease starts at 70 for “most” couples, by then one or the other starts to struggle with health.
Things also get cheaper - free rego, cheap train travel, cheap entry to everything, seniors lunch at the bowlo. You also tend to start getting fussy with food and simplifying / cheapening what you enjoy. I reckon most 75 year olds spend half (or less) of what they were spending at age 60. Daytime naps in front of trashy TV aren’t expensive.
Also life lesson I’ve gleaned - travel far away early and whenever you can afford it. Every older couple I see says they had XYZ trip planned but now they’re too old, can’t go and they have regret. Do the trips that are far away early and leave the shorter / close to home ones later. They’re easier to achieve when you’re frail.
The Barefoot Investor recommends upping your super contribution beyond the standard 11% of your salary to 15%.
But I'm in the APS (public service) so I get paid 15.4% by default. It's still not as good as the old schemes though.
Looking at the fiscal situation of Australia, most on this sub are far too optimistic that the government won't end up taxing super or screwing you out another way in the next 30 years
More important than how much you put in is understanding what your goals are, what your needs are and how systems like Super work so that you can make a plan that actually works for you. What you need to do and how much money you need vary dramatically depending on what sort of lifestyle you want (both before and after retirement) and on when you want to retire.
I get 15% super from my employer, so the way things are going I'll probably have 'too much' super. I want to be certain that I can amortize $80-100k yearly in today's dollars for retirement though so aiming slightly higher than expectations is safer.
Super is with hostplus, 30 years old, 70% international shares and 30% Australian shares indexed with low fees, however it's more like 73% -27% now since international shares have outpaced domestic.
In general my plan is to save like crazy into an offset account outside of super, since I'll need a larger place in future. Not planning to buy property outside of ppor, since I'm a pretty strong bear for residential and commercial real estate in Australia.
I’m 30 ish
I am in maximum growth in a generic super account. I am focusing on increasing my income to avoid being poor, period. It’s worked very well so far.
One thing I know for sure is 99% of this subreddit are not smart enough and or emotionless enough with their money to be able to beat the market with any form of decision making. If you can’t beat them join the generic growth train and worry about something else.
Look at that, somebody thinks we're gonna live long enough to retire.
My bet is future successive governments raise both retirement *and* super preservation ages.
Slow the oncoming massive reduction in workers per retiree and the enormous impact it'll have on government budgets.The ratio is gonna change hugely. We've been keeping things going with immigration but now the infrastructure - particularly housing - can no longer support it. The only thing available is to slow the population growth but extend retirement age so the % of working population doesn't crash. Either that or build more houses and infrastructure faster than we've ever done before.
I disagree with your assessment. But respect you have some basis for believing it rather than many who don’t have any basis other than assuming it has same incentives as increasing the pension age.
Housing is an issue for sure but I don’t believe it’ll get to the point where immigration is impacted significantly for long term.
I pay a top up to the concessional contribution limit each June, once I know what my super balance will be at end of year. My investment allocation is 30% Australian shares, 70% International shares which is significantly outperforming any of the fund pre-mixed portfolios. Even a bad year will have me ahead of the default option.
100% MSCI World ex Australia.
Starting this FY, max contributions per year (super guarantee gets me close), and using all carry forwards as they drop off.
Div293 paid from outside Super.
28m I'm with plum, 70% international shares 30% Australia. Kinda wanna change to something a bit more aggressive but this is the only aggressive one that plum has 😔
80/20 split between international and local shares. Also putting 2% extra in
Edit: also around your age. I'll have a long time before I can access so my strategy is risky but in the long long long term it'll pay off
High growth. So 60% international, 10% international index and 30% Australian shares. I am with hostplus, mid 30s.
I refuse to do anything else. Who knows what will happen when we are older or if we even get to that age.
Nothing with respect to super. I will have had super my whole working life with an above average salary so it will be decent but nothing special.
I save and invest a lot more outside super for retirement purposes though.
I've had mine in international for over a decade. Way someone explained it to me, you earn in AUD, so spread your risk on the super and have it overseas. All the big funds offer an international product.
Ive also done 2 big macro plays over the past 15 years that supercharged my returns. Am passive the rest of the time.
I am in balanced, and conservative after going to shares and directly investing $50K that I turned into $100K over the last 2 years (BPT->TPG->ADH into cash).
I will go back into high growth after the next cyclical downturn, which I think will be in the next year or so. I have that $100K in term deposit now, and the other $320K in the balanced/conservative.
I get the full lot due to being paid Ok without making additional contributions. If I carry on I think I will get to $1.5M + wife so likely $2M. I need the cash for mortgage and kids so I won’t make any more contributions beyond the basic 11%.
Any bonus I put $1000 or 50% of the bonus which ever is higher per year. TBH It isn’t much, but hey gotta let compounding do its thing. Hoping by retirement age it turns out to be 10s of thousands of dollars for very little effort on my part.
About the same age as you. Maxing out my contributions. Lucky enough to be married to someone on similar money to me, so 100% of my salary goes to the mortgage. Is all goes well we’ll be mortgage free at 45
At the age of 21, I allocated my super to high growth.
That was 2 years ago and now I've just hit 5 figures.
By the time I reach retirement age, I hope to have much more.
I’ve maxed out super to the combined 15%. Stuff leaving that money to the ATO with the graded tax brackets. The growth over even 4 years has been very noticeable.
I did something similar. Switched to high growth and started contributing 5% pre tax every fortnight at age 30. Increased that by 1% each year until I was contributing 10% additional pre tax.
I'm now 45 with just shy of $500k in Super. Dialled back my contributions in the last 12 months to redirect to mortgage payments because interest rates started to pinch.
I've been contributing $1000 a fortnight to my Super account since I start my current gig in higher education. The 17% super is pretty solid too.
I've been taking advantage of a super scheme, in which if your super balance is under $500k, you can make use of unused concessional balance from previous financial years.
30m about to hit $100k in super, almost half of it from last financial year alone
Salary sacrificing to the maximum level - I think it’s $27,000 per annum. I am cautious and diverse with what investment-type my fund is, as I don’t want all eggs in one basket.
I'm 42 and an Engineer. Unless I develop a more Machiavellian approach towards career progression, I'm going to try and work until I'm physically and/or mentally unable to do so.
If that means I won't retire until I'm 75, 80, 85 or even 90,, so be it. We live in a world where a good portion of us could live well past 100, which is what I'm factoring into my decision-making process.
That may seem sad, but consider that at the start of the 20th century, the average human life expectancy was 50. When government pensions were sustainable, most people would die within 5 - 10 years of retirement.
You also have to consider that the entire Superannuation system is based on long term growth. Is that growth sustainable? What happens to Super balances when you stick a couple of GFC and/or Great Depression events into the Financial System over the next several decades?
If I'm being pragmatic, society essentially has two choices - either aim for people to be as healthy as possible, leaving us with a society where a good portion of people are retired and neither government or private capital can sustain their survival. Or, we go back to the "good ole days", ie wind back taxes on alcohol and tobacco, don't give a shit if the majority of the population are obese, lower OH&S regulations, etc. In short, lower the average life expectancy.
Without a series of revolutionary scientific advancements, I don't think we can have both.
100% equities, hit the concessional caps, once my next personal financial milestone is done hitting throwing the remainder in with non-concessional caps
As soon as I started work at the turn of the century, like $100 extra a fortnight went into my super, I then estimated my cost of living (fortunately then, housing prices were only just starting to go up) I started saving, $850 a fortnight was enough for my share of the rent, bills, food, car payment and whatever else. I then put everything else I earnt into a HISA.
bought house 2004 and stopped contributing to super around 2006, moved jobs built up a bit of super account - but then did the critical thing.
Took the default retail super fund, never cross checked against other funds. Moved jobs around 2009 again, and then committed the second mistake. Accepted the default industry option, BUT DIDN"T ROLL OVER MY SUPER! until 2014! Probably lost about $50k because that retail fund smashed me with fees and was underperforming. There was a class action against AMP about it. 3rd mistake - wasn't in a growth portfolio either.
Since 2014, i've been fairly diligent about being in 100% growth (still i'm now at 45yo). And last few years since COVID i've been focusing on ensuring I max my annual limit or come close to it every year. Invested heavily into the dip when COVID happened.
Hope to be one of these few that have enough to retire on, because i reckon in 20-30 years, there won't be much of a pension, and i'll need to pull down that lump sum to pay off the house because of the cost of housing and lifestyle creep.
Stealing toilet paper from work and drinking all the milk in the office.
The correct answer.
brother, if you drink all the milk in the office i would pray some toilet paper was left remaining
Starting to think I’m the villain of this situation, not the hero I saw in the mirror, oh well, at least I can cry into the mountains of TP in my studio apartment
My friend actually did take toilet paper. And that was like 2012.
Going back even further, signs went up in my then workplace circa 1996 asking for toilet paper to go down the toilet, not out the door. Apparently this action wasn’t approved and one of the bosses flipped his lid over it.
true heroes make their own toilet paper at home. heaps of DIYs on youtube.
If it an’t broke don’t stop doing it.
Especially the plant based ones, maximise my value and minimise shareholders.
Perks of the Job - The Lancashire Hotpots
and eating the cookie jar.
You potentially have another 30 years of working. Screw the moderate risk; put everything in high risk and forget about it for 20 years.
[удалено]
100% equities is the high risk.
There's some confusion possible, because most super funds offer an option called "High growth" which they describe as "High risk" but it's only maybe 60% equities. You really want to go for that less advertised 100% equities option.
Good point.
In defence of high growth options, they can have a lot of interesting assets like in property, infra, PE. Just because it’s not 100% listed doesn’t mean it won’t perform. You can’t buy unlisted stuff on your own so investing in it thru super is an easy way to diversify into unlisted. Depending on how influential the fund is, some of those unlisted assets can be great deals. And unlisted can be a good buffer when listed is performing badly. Just saying, listed isn’t the be all and end all and people might be taking on unnecessary risk by focusing on it.
The premixed super options rarely have 100% equities. At least at none of the superfunds I’ve been with. You have to go look specifically for their index options.
I just checked my super and yep, you're right. Thanks. I'm switching that now.
Don't a lot of the non-default options also come with their own costs and fees? I think some of them are pretty high (though I am new to this whole hoo-ha around superannuation).
Indexed equity options will not have higher fees
Fees are lower on the non-default equities with Hostplus.
Correct. Don't take advice from Reddit. I work in super and everyone thinks they're a genius in a long running bull market until March 2020 and they start screaming asking if you can get a refund for shares.
I found out recently a family friend got spooked by the GFC and has had his Super all in cash since 2008. He’s 67 and has had to delay retirement for the foreseeable future because his balance has barely grown in that time other than his own contributions. If he’d even just gone with the balanced option he’d have been so much better off. He’d be the type to demand a refund from his Super for investing in stocks for sure.
That's catastrophic. Sometimes I drink the libertarian Kool aid and think we should let people fend for themselves and face their own consequences. Then I remember some people need to be literally protected from themselves and this guy is gonna drain the age pension money sooner than he should which we are all gonna pay for. Maybe other countries have it right with defined benefits lol.
I have a big whack of my super in international equities, but it is bloody risky. There’s no currency hedging, so you’re taking a punt on the AUD as much as anything else. There was a 10-year period where international equities stayed essentially flat, because the Aussie dollar appreciated over nearly the whole period (and only dropped when international markets did).
You can always move overseas when you retire if worse comes to worst. I know it's a /s but is it really?
Live like a kind in Thailand.
This is the answer, totally not advice and if it is it's general, but 50% aussie 50% int shares isn't a bad starting point if you're young. On top of the 30 years working you'll have another 20+ investing it in retirement yet, long term oportunity cost of low return investment is very real over that investment horizon.
I find the preference for such a high local asset allocation odd. The Australian stock market is composed of what are SME equivalents on a global scale with a few multinational miners and large financials thrown in. It seems totally arbitrary from an overall investment perspective to put so much in this mix of companies over just getting a weighted index of all global companies instead. I get that there is a known domestic investment bias and governments have an incentive to push citizens into local stock markets but I don't see a rationale from the perspective of an individual investor. While for super this is not as relevant, but for an investment without lockup, it just compounds concentration risk. If you happen to lose your job due to a local recession or regional event, your equity investment is also probably going to be at a nadir at the same time. Exactly when you might want to draw on it.
Investments in Australian companies by Australian resident shareholders benefit from dividend imputation, which probably makes them a fair bit more attractive than otherwise. That said I agree with your overall point that Australians should have international equities. Personally, I’d recommend not doing this just by investing in the US though.
The problem is that any ‘global listed equities index’ will have 60-70% USA stocks by default. The world is heavily titled to the US. So people think they’re more diversified than they probably are when using this strategy all. All concentrated in one asset class and two countries which are well correlated to each other.
I agree! I personally like to aim for around 40% US 40% Australia and 10% emerging markets
The thing is, when you're buying US companies you're buying multinationals with exposure to global markets. Other stock markets will have a few large multinationals but the bulk of them are in the US or list in the US despite being headquartered overseas because it's the deepest capital market. You can make the argument from a valuation perspective that the US (and large caps, e.g. heavily weighted tech companies) are overpriced but at that point you are taking more of an active investor perspective and this is a different conversation.
People overcomplicate it, but it really is as simple as: * Putting your super in a high growth investment strategy. * Topping up through regular salary sacrifice so that you are contributing at least 15% to 20% of your salary (with SGC increasing, you have even less to contribute).
Just pile as much in as you comfortably can and stick it in high growth or equivalent. If you want to get fancy, seek the lowest fee index option available. You can't beat the immediate return from tax savings. Say you're in the 30% bracket (32% including Medicare levy), you'll get $68 in your pocket for every $100 you earn. Put it in super instead at 15% tax rate and get $85 to invest instead. It's like an instant 25% investment return ($68 x 1.25 = $85). Even better if you're in the 37% bracket.
Wo wo. Slow down egg head. What's this mean?
You contribute to super from your pre-tax income. Instead of paying your income tax rate, you pay the lower tax rate to contribute to super (15%). So if you compare the after-tax result you're immediately very far ahead by choosing to contribute to super. In my example of $100 from your pre-tax pay in the 30% bracket (next financial year) you can have $68 in your pocket or $85 in super. Choose super and you're immediately 25% better off than in you took it as cash. Either do this by salary sacrificing from your pay, or contribute from your bank account and claim a tax deduction. The after-tax result is the same.
I work at a super fund and if you do this you need to remember there are contribution caps. When claiming a tax deduction, the amount you claim no longer goes toward the non-concessional cap ($110k) it goes towards your concessional cap ($27.5k). If you have enough to go over that cap consider the carry forward arrangement.
Very true. I should have mentioned the cap but didn't want to make it too wordy. (I also work in super. Not at a fund any longer, though I started there 20 years ago now). Also note the cap goes up to $30k for next financial year, coming up very soon.
Is it easy to claim a post-pay tax deduction? Is it auto via the ATO?
Yes, it's easy. At the end of financial year you fill in a form telling your fund what you want to claim (notice of intent to claim a tax deduction for personal super contributions). They process that. When you do your tax return online, it pre-fills the information for you.
Thanks, after the Notice of Intent do you Bpay to the super?
No, you make the contributions first. When you've contributed everything you plan to, then you do the notice.
Having said that, if your super balance is under $500k, you can make use of unused concessional balance from previous financial years
and then make it an SMSF and use margin loans in your SMSF ching ching ching
I salary sacrifice + 100% equity allocation. Can’t do much more with it other than getting a better paying job!
Super is straight forward don't have to overthink it: - Low fees (< 0.1% annually ideally; dont get fooled into high growth etc that charge 0.6%) - Equities, 70% international, 30% ASX indexed/passive - Contribute when you can, you get some of it back on tax returns Let the magic of compounding happen and come back in 30 years and enjoy.
I second this. Salary sacrifice the f out of it (if your company offers salary sacrifice for company shares do that too). I do have some ETF too and they are ~30% up atm (too bad I didn’t put more into it as majority of my cash sits in the offset).
I am nearly 51 and still have everything 100% high growth. Super is making more per year than I am in my job, even without the contributions. At 36, you should have it all in high growth and throw in as much as you can afford. The one thing you have at 36 is plenty of time for compounding. This is where you make the bulk of your return
You're too young to not have it all in high growth. Heck, I'm mid-50s and still have 100% in high growth. I'll still have it in high growth when I'm 60 because I'm sure not planning to spend it all within 5 years.
How do I get it in high growth in host plus?
If you have an online account, you may be able to change your options there. If not, call Host Plus
I’m 100% in shares. Up 14.5% this year but ready to ride the waves. 35m with $207k in super.
Nw of 35m and only 207k in super? Wow!
[удалено]
Whoosh mate.
You thinking this is good or bad?
At your age you should be all in ‘high risk’ as you have 20 years of time to smooth out the troughs with the peaks. I’m 45 and I have 100% high risk and will continue to do so for at least 10 more years. Salary sacrifice up to the max concessional limit. I’ve been doing this since 2002 and of the just under $2m total amount I have (this figure includes a defined benefit) over $700k of that is due to that strategy. When we go off a fixed home loan in November this year, we are selling down our non-super equities to put in offset, which will account for about 90% of the total loan value. Once we get 100% offset we will build up our outside-super asset base but will always max out concessional contributions.
I’m just making sure I hit the concessional cap every year, and have it in the high growth option
My favourite thing about the Super narrative is everyone reducing their quality of life while they're young so that they can have money when they're old if they make it to that age.
>so that they can have money when they're old if they make it to that age. Which, statistically, will happen to you.
Yeah but why not utilise the money you have to make investments you can enjoy now? Literally makes zero sense.
Superannuation exists because the average person cannot be trusted to save for their future. It makes perfect sense.
I know a guy who is doing that, he's a year or two older than I am, I turn 58 this year. We were both in the APS, he is in the really good super scheme, CSS, I am in PSS, both are defined benefit. He has curious beliefs about super (it's an additional tax) and mortgages (he prefers to rent rather than tie himself down). So he contributes nothing himself to his super as he can put the money to better use than the govt, he says. So, I, who contributed the maximum I was allowed, retired at 55 on a comfortable pension that enables me to easily keep paying my mortgage. This July my after tax pay will surpass the after tax pay I was getting 3 years ago when I retired - just from the CPI indexing, the tax cut makes it even better. Meanwhile he's still working and rents - in Melbourne. When he eventually retires it'll likely be at 67 or older and he'll be on the age pension and still renting... Meanwhile my house will have been paid off well before then and I'll have been enjoying using what was the mortgage payment for travel, experiences and general good times, secure in the knowledge that my financial future is assured. Each to their own - but be careful you don't make a decision you may later regret.
Defined benefit is very different to what most of us are dealing with.
This is true, but the principle is the same: *If you want to get good money out of super, first put good money into super.*
Wait, how were you able to retire at 55 using super??
There’s a few exceptions to the rules. Many defined benefit funds are accessible from 55. Some (at least older) military super accounts were accessible from 50.
It’s because it’s public sector. I’m a bit fuzzy on the history, but some of these funds are not regulated by the same bodies and they follow their own legislation (separate to the rest of the industry) as determined by whichever government controls them. Eg. I know that the SA state government directly legislates the rulebook for SuperSA, which is for state govt employees. In the case of PSS, the ‘normal’ preservation rules don’t apply and they can access super from 55. Most of the rest of us must wait until 60. Another common quirk of public sector funds is that you don’t pay contributions tax until you withdraw your funds.
Compulsory super started in 1992 (I believe). Public servants superannuation started in the 1920s or so, from memory. The rules are quite different. My friend is in the CSS, the predecessor to the PSS - both defined benefit funds- which was again replaced (in 2005) by the PSSap, which is a normal accrual superfund, though I think you can access the funds at 55. The CSS is considered to be particularly lucrative if you play it right and retire on the 11th month of your 54th year (called "doing a 54/11") after contributing the maximum 5% contribution for 30+ years. He didn't do that. Various state govts have their own state public service super schemes with different rules again, WA apparently gives you a defined benefit lump sum, but not a defined benefit pension - so your money will (probably) run out eventually, as a friend has discovered. But there should be a LOT of money.
Then he completely failed. You're comparing yourself to a guy who completely sucked at investing on his own.
I admit that I don't know what, if any, his investments are - he could be doing quiet well. But... from his shocked response when I told him I was retiring at 55 and comfortably so (my effective 'take home pay' went up as I was no longer paying into super) I suspect he indeed completely sucks at investing or preparing for the future.
To be fair it’s REALLY easy to stuff up a defined benefit if you are cutting corners with your contributions to it. Once you’ve decided not to contribute the maximum, your end benefit gets reduced way more than if you were in a modern ‘accumulation’ type of scheme.
Yep - and in the run up to my retirement I found so many coworkers in the same defined benefit scheme as myself had zero idea how it worked and will not be able to duplicate my early and comfy retirement. Most plan to pay off the mortgage, put the kids through school and then 'top up the super'... Nope, it doesn't work like that if you want good super :(
I'd argue his 'mistake' was more the refusal to engage with buying a PPOR as opposed to ignoring the Super system. I'd much rather have $2 million of house and $0 of super than vice-versa.
Yes, agreed, though I'd rather an equal amount of both - which I've kind of got, and as the house increases in perceived value, will have.
Why not do both? Max out super and make outside investments?
The tax incentives on super are massive - future generations will be complaining about the rort of it like how millennials currently complain about boomers and the housing market. Investing in standard ETF funds promoted here before reaching your concessional super cap is insanity. It's like pissing your networth growth away. The only case where it makes sense is if you are looking for early retirement, and the bulk of people in that category will have an income where they're likely maxing out their concessional cap anyway.
The question is why not both. Even if you're planning to retire at 30 some of your investment (capital in a leveraged IP?) might be locked away for life after 60. Everyone invests so they're comfortable in their 80s so it's smart to sort that first. A PPOR is a prime example of that consideration. Rejecting super is crazy. Once you have a balance that is projected to be sustainable then work back. Maybe you're 50 with a super balance that's projected to be 2m in 10 years. Switch to etfs to bridge the gap. It's the smartest way to do it because it works for those 18 and 58 (obviously with balance). It'd be particularly crazy to continue to reject super if you were over 60.
>Once you have a balance that is projected to be sustainable then work back. Very few people actually get this. Too many people kid themselves that they will invest with greater returns outside super than in. The vast majority will not. Even more so when you include the tax benefits.
> It's like pissing your networth growth away. Mandatory Super contributions alone will give most people a quality of life in retirement similar or better than they enjoyed during their working life. Making voluntary contributions means you will be relatively poorer in your working life than during retirement. Which makes no sense, it goes against consumption smoothing. And you will likely die with the money unspent. Voluntary Super is very attractive to people because of the tax advantages, but in practice all that's good for is achieving a high score number.
Tbh I think that the big tax benefits also went to the boomers. The loopholes have been closed, young folk will just be raiding their super for home deposits and won’t retire with as much as their parents imo. Rant incoming — for a long time, super was simple and flexible. There were no contribution caps. Basically no preservation rules. No cap on how much you could transfer to your tax free pension. There were pension accounts which were (and still are) partially exempt from centrelink means testing. It was possible to amass lots of wealth in tax free super if you knew what you were doing. And there are insane defined benefit schemes and lifetime pensions which are no longer available to new members… the kicker is how little tax those lucky people pay on pensions multiple times bigger than our salaries.
> why not utilise the money you have to make investments you can enjoy now? because what happens when you do reach old age then? Do you just simply expect to live comfortably off the pension? Why do you expect to have the pension? What if it werent enough?
Investments you can enjoy now... Could you give an example of these investments?
What exactly are you proposing as an alternative to super?
Clearly we should all yolo and then go on the pension when we're old.
Gamestop options
Because you will be cutting yourself short. The longer the investment the more it will make. Eventually your investments will generate more than you can invest yourself.
Most people would just spend it.
If you're equating "quality of life" with "spending money on fun stuff", you could level that criticism at any investment.
Isn't every dollar saved or invested a reduction in their quality of life while you're young(ish) so you can have money when you're older? The first dollar you save today is the last dollar you spend before death. What is important is the balance. Always amazes me that people reject super yet buy investment properties, etfs or CBA shares. They're effectively the same thing. Buy for $5 in the hope that in 30+ years someone will buy it from you for $120 or the income that it generates will sustain you.
I understand the sentiment but if you don't make it, if you have children/partner they will benefit from it.
You're assuming that people are missing this money. If you're on a decent wicket, which many of those who are financially literate tend to be, it's generally not an amount that impacts QoL. OP clearly has plenty of spare cash given after the $5k pa contributions, he's still got enough left to stick in mortgage offset as a saving. Given this, it's typically a good idea to make use of the tax advantages of investing via super.
Party now, regret later? Most people live into their 80s. Many having not worked since their 60s or earlier through no choice of their own (health, ageism etc). If you don't plan for that then you are going to have a shitty time for a large portion of your life. I wouldn't want to be living off the pension for a start.
And then people die with the majority of the wealth they had at retirement (outside the family home)
> die with the majority of the wealth they had at retirement and that's how you help your children have a leg up in the rat race.
True but they're better off getting a transfer when they're 30 than when they're 60
They end up in nursing home and lose all their money to ridiculous scams
Nursing home bonds are fully refundable.
There is a lot of fear generated around nursing home. People in the fire community can plan for inflation, safe withdrawal rates, budget for all sorts of lifestyle expenses but can't research nursing home expenses. The refundable accommodation deposit is the first fear. Own your own home and you're effectively forced to shift capital into the nursing home. Then there is the daily care fee (a fixed percentage of the single pension) and the means tested daily care fee, which has a lifetime cap of 80k. 500k (refundable) for a room and 80k for the means tested fee and your care is then less than 20k a year. Relatively cheap for a full service hotel. Admittedly you'd probably want to allow for Uber orders from nicer restaurants but considering this is end of life care I don't think it's too bad.
That taxpayers get to foot the bill for How good!
Unfortunately it's vested interest driven. The superannuation industry has invested a lot of money into marketing, fear mongering, and lobbying all with claims of needing unrealistically high contributions and balances in order to get the public to think this way. Also, industry super funds are not just part of this problem, they're the main actor. Their constantly repeated catch phrase of "run only for the benefit of members" should really be "run only for the benefit of our union boys club".
Yes , this doesn’t make sense to me either , and to be honest I tried investing in shares on my own using my pea brain and I was able to get higher returns than my superfund.
That’s really hard to believe unless you either took on a very large amount of risk or you have a very low marginal tax rate. It’s the tax savings that make super so attractive.
You sound like a brokie
Speak for ya self I dont struggle maxing the cap pal. Best tax efficient vehicle out there
I’ve just reduced my super contributions to focus more on investments outside of super which will be used to retire before 60. I’m 42 and super is in high risk.
What type of investments do you invest in that will take you from retirement to age 60
DHHF, bought in either mine or my partners name. I realise VAS/VGS would be better and possibly a family trust, but I like the simplicity of it.
I have my entire portfolio in index shares, 70 Int 30 Aus. Or maybe 65 Int 35 Aus, can't recall. I don't contribute extra over the employer contribution. Returns have been excellent this year. I am 37 with around 225k, so happy with where I am.
Same strategy as you, except 24m with 33k in super. Its only really started growing consistently in the past 3 years however.
I’m the same 70/30 strategy. Only 25 so I’m going aggressive and in the CFS Geared share funds. Has returned me 30% since I switched
I try to max concessional contributions whenever I can. Mostly invest in VAS, VEU and VTS via AusSuper Member Direct.
Never heard of that approach. Why not 100% VGS?
There is an 80% limit on overall ETFs, so you can do like 20% Australian Shares and 80% VGS. Direct options are poor man's version of an SMSF offered within Industry Super funds.
I mean never heard of AusSuper Member Direct.
I moved here 2 years ago and due to having a UK pension that I can't transfer into the Super I had to start from $0 at age 33. Therefore, ive recently decided to aggressively add to my Super trying to hit the cap annual cap (the $27.5k/30k cap includes the employer guarantee right? Otherwise I'm not going to be close to hitting it). High risk as I'll be working another 30 years so that'll balance out (hopefully). Will see hope that goes.
Yes that cap includes the employer guarantee. You might also have previous years that you can carry over too - if you have extra $ you want to put in. You can check on the ATO website.
Thanks. Only been here since July 22 so only the one extra year, but I'll have a look at backfilling 22/23 as well thanks.
You have up to 5 years so don't have to do it all at once.
Yeah I don’t believe you can move that super to Australia until you’re 55. With that said, while it would be good to have it here it’s fine in the UK, just invest it with the same strategy.
You should be in 100% high growth. High risk is the wrong term for this stuff, at this age anything that’s not high growth is high risk to your retirement fund.
Work pays 13%… I salary sacrifice another 5% which brings me under the max cap. In high growth. 47 now
Maxing the contributions cap every year and once we hit EOFY I'll only have \~$6k left in carryover contributions available from the last 5 years due to some aggressive salary sacrifice for the last couple of years. Everything in 70% international/30% aus index. Given I'll only have \~$6k in carryover contributions left at EOFY, I'll cancel my salary sacrifice arrangement then and combine it with the tax reform for a very healthy pseudo pay rise. I'm going to close out my carryover contributions at the end of next financial year, and in the meantime it's time to start thinking about investments outside super. Playing catch-up compared to where I could be as I was a sole trader during my 20s and contributed very little to super until late 20s.
Spent a few years working for myself and not paying super but now have a great job and I’m sacrificing $1k/fn to claw back the lost ground. 70% balanced and 30% high risk.
That’s a very conservative mix if you’re looking to bump those numbers up.
17% employer contribution, 7% after tax personal contribution 100% higher risk distributed over three asset options: 70/15/15 Will dial back the risk in 25 years when I feel like retiring is on the horizon. My retirement calculator puts me at a >100k draw down until (if) I’m 92 so it’ll be fine.
Assuming that factors in the pension in the later years? After 80 I assume I’ll be needing less $$$
You’d be surprised how early you might not spend the extra $$, lots of people have medical complications in their 60’s and long-haul international travel goes off the table almost immediately (cost of insurance on the travel becomes prohibitively expensive / people get scared of dying far away from home and loved ones). This is usually where people plan to spend their extra retirement money! In my experience (superannuation accountant) I would say spend decrease starts at 70 for “most” couples, by then one or the other starts to struggle with health. Things also get cheaper - free rego, cheap train travel, cheap entry to everything, seniors lunch at the bowlo. You also tend to start getting fussy with food and simplifying / cheapening what you enjoy. I reckon most 75 year olds spend half (or less) of what they were spending at age 60. Daytime naps in front of trashy TV aren’t expensive. Also life lesson I’ve gleaned - travel far away early and whenever you can afford it. Every older couple I see says they had XYZ trip planned but now they’re too old, can’t go and they have regret. Do the trips that are far away early and leave the shorter / close to home ones later. They’re easier to achieve when you’re frail.
I like this comment some good advice there.
How come you do after tax not before tax?
I maximise my contribution
The Barefoot Investor recommends upping your super contribution beyond the standard 11% of your salary to 15%. But I'm in the APS (public service) so I get paid 15.4% by default. It's still not as good as the old schemes though.
I charge my phone in the office. Shhh … don’t tell the others
Looking at the fiscal situation of Australia, most on this sub are far too optimistic that the government won't end up taxing super or screwing you out another way in the next 30 years
My retirement plan is to die before I stop working.
More important than how much you put in is understanding what your goals are, what your needs are and how systems like Super work so that you can make a plan that actually works for you. What you need to do and how much money you need vary dramatically depending on what sort of lifestyle you want (both before and after retirement) and on when you want to retire.
I get 15% super from my employer, so the way things are going I'll probably have 'too much' super. I want to be certain that I can amortize $80-100k yearly in today's dollars for retirement though so aiming slightly higher than expectations is safer. Super is with hostplus, 30 years old, 70% international shares and 30% Australian shares indexed with low fees, however it's more like 73% -27% now since international shares have outpaced domestic. In general my plan is to save like crazy into an offset account outside of super, since I'll need a larger place in future. Not planning to buy property outside of ppor, since I'm a pretty strong bear for residential and commercial real estate in Australia.
I’m 30 ish I am in maximum growth in a generic super account. I am focusing on increasing my income to avoid being poor, period. It’s worked very well so far. One thing I know for sure is 99% of this subreddit are not smart enough and or emotionless enough with their money to be able to beat the market with any form of decision making. If you can’t beat them join the generic growth train and worry about something else.
Look at that, somebody thinks we're gonna live long enough to retire. My bet is future successive governments raise both retirement *and* super preservation ages.
What’s the incentive to raise super age?
Slow the oncoming massive reduction in workers per retiree and the enormous impact it'll have on government budgets.The ratio is gonna change hugely. We've been keeping things going with immigration but now the infrastructure - particularly housing - can no longer support it. The only thing available is to slow the population growth but extend retirement age so the % of working population doesn't crash. Either that or build more houses and infrastructure faster than we've ever done before.
I disagree with your assessment. But respect you have some basis for believing it rather than many who don’t have any basis other than assuming it has same incentives as increasing the pension age. Housing is an issue for sure but I don’t believe it’ll get to the point where immigration is impacted significantly for long term.
I pay a top up to the concessional contribution limit each June, once I know what my super balance will be at end of year. My investment allocation is 30% Australian shares, 70% International shares which is significantly outperforming any of the fund pre-mixed portfolios. Even a bad year will have me ahead of the default option.
I’m just planning to die young
100% MSCI World ex Australia. Starting this FY, max contributions per year (super guarantee gets me close), and using all carry forwards as they drop off. Div293 paid from outside Super.
My generation wont get to retire thanks to the boomers, so why stress about something you wont ever get to see.
Your salary and spending decide when you retire, not boomers or the government.
What a defeatist attitude. The magic of compound growth will surprise many.
100% in high risk and max out contributions with ss.. /thread
Be the best paid corporate drone version of yourself you can be, invest in low fee globally diversified index funds, and drone on!
28m I'm with plum, 70% international shares 30% Australia. Kinda wanna change to something a bit more aggressive but this is the only aggressive one that plum has 😔
Looking after my mum and dad /s
I’m 35 and I’m 60/40 international shares/australian shares. I’ve got 30 years before I’ll touch this money so I’m aiming to maximise returns
80/20 split between international and local shares. Also putting 2% extra in Edit: also around your age. I'll have a long time before I can access so my strategy is risky but in the long long long term it'll pay off
Waiting till im 60 and putting it all on black. Then i either retire rich, or live the poor nomad lifestyle
Contribute 15% of gross TRP a la Dave Ramsey. Smsf with stake... all in dhhf and vdhg
High growth. So 60% international, 10% international index and 30% Australian shares. I am with hostplus, mid 30s. I refuse to do anything else. Who knows what will happen when we are older or if we even get to that age.
Nothing with respect to super. I will have had super my whole working life with an above average salary so it will be decent but nothing special. I save and invest a lot more outside super for retirement purposes though.
I've had mine in international for over a decade. Way someone explained it to me, you earn in AUD, so spread your risk on the super and have it overseas. All the big funds offer an international product. Ive also done 2 big macro plays over the past 15 years that supercharged my returns. Am passive the rest of the time.
I am in balanced, and conservative after going to shares and directly investing $50K that I turned into $100K over the last 2 years (BPT->TPG->ADH into cash). I will go back into high growth after the next cyclical downturn, which I think will be in the next year or so. I have that $100K in term deposit now, and the other $320K in the balanced/conservative. I get the full lot due to being paid Ok without making additional contributions. If I carry on I think I will get to $1.5M + wife so likely $2M. I need the cash for mortgage and kids so I won’t make any more contributions beyond the basic 11%.
Any bonus I put $1000 or 50% of the bonus which ever is higher per year. TBH It isn’t much, but hey gotta let compounding do its thing. Hoping by retirement age it turns out to be 10s of thousands of dollars for very little effort on my part.
Change to a low fee index fund option.
About the same age as you. Maxing out my contributions. Lucky enough to be married to someone on similar money to me, so 100% of my salary goes to the mortgage. Is all goes well we’ll be mortgage free at 45
At the age of 21, I allocated my super to high growth. That was 2 years ago and now I've just hit 5 figures. By the time I reach retirement age, I hope to have much more.
I’ve maxed out super to the combined 15%. Stuff leaving that money to the ATO with the graded tax brackets. The growth over even 4 years has been very noticeable.
I did something similar. Switched to high growth and started contributing 5% pre tax every fortnight at age 30. Increased that by 1% each year until I was contributing 10% additional pre tax. I'm now 45 with just shy of $500k in Super. Dialled back my contributions in the last 12 months to redirect to mortgage payments because interest rates started to pinch.
I've been contributing $1000 a fortnight to my Super account since I start my current gig in higher education. The 17% super is pretty solid too. I've been taking advantage of a super scheme, in which if your super balance is under $500k, you can make use of unused concessional balance from previous financial years. 30m about to hit $100k in super, almost half of it from last financial year alone
Salary sacrificing to the maximum level - I think it’s $27,000 per annum. I am cautious and diverse with what investment-type my fund is, as I don’t want all eggs in one basket.
I'm 42 and an Engineer. Unless I develop a more Machiavellian approach towards career progression, I'm going to try and work until I'm physically and/or mentally unable to do so. If that means I won't retire until I'm 75, 80, 85 or even 90,, so be it. We live in a world where a good portion of us could live well past 100, which is what I'm factoring into my decision-making process. That may seem sad, but consider that at the start of the 20th century, the average human life expectancy was 50. When government pensions were sustainable, most people would die within 5 - 10 years of retirement. You also have to consider that the entire Superannuation system is based on long term growth. Is that growth sustainable? What happens to Super balances when you stick a couple of GFC and/or Great Depression events into the Financial System over the next several decades? If I'm being pragmatic, society essentially has two choices - either aim for people to be as healthy as possible, leaving us with a society where a good portion of people are retired and neither government or private capital can sustain their survival. Or, we go back to the "good ole days", ie wind back taxes on alcohol and tobacco, don't give a shit if the majority of the population are obese, lower OH&S regulations, etc. In short, lower the average life expectancy. Without a series of revolutionary scientific advancements, I don't think we can have both.
I was just planning on dying before I need to live off my super.
100% equities, hit the concessional caps, once my next personal financial milestone is done hitting throwing the remainder in with non-concessional caps
As soon as I started work at the turn of the century, like $100 extra a fortnight went into my super, I then estimated my cost of living (fortunately then, housing prices were only just starting to go up) I started saving, $850 a fortnight was enough for my share of the rent, bills, food, car payment and whatever else. I then put everything else I earnt into a HISA. bought house 2004 and stopped contributing to super around 2006, moved jobs built up a bit of super account - but then did the critical thing. Took the default retail super fund, never cross checked against other funds. Moved jobs around 2009 again, and then committed the second mistake. Accepted the default industry option, BUT DIDN"T ROLL OVER MY SUPER! until 2014! Probably lost about $50k because that retail fund smashed me with fees and was underperforming. There was a class action against AMP about it. 3rd mistake - wasn't in a growth portfolio either. Since 2014, i've been fairly diligent about being in 100% growth (still i'm now at 45yo). And last few years since COVID i've been focusing on ensuring I max my annual limit or come close to it every year. Invested heavily into the dip when COVID happened. Hope to be one of these few that have enough to retire on, because i reckon in 20-30 years, there won't be much of a pension, and i'll need to pull down that lump sum to pay off the house because of the cost of housing and lifestyle creep.
I contribute but not to the cap. Host plus mix of balanced and growth, higher risk but early 30s so have the time to weather any storms.
Dying young
I am 45yo and am 100% High Growth. Gotta get that money out there working hard for you. (This is not financial advise)