@Rick "Many retirees would hardly notice a tax on investment earnings because it would be automatically deducted"---is this guy taking his cues from the RBA governor, sounds like ivory tower talk to me

Ummm

Havent the retirees been through the same thing?

werent they living next door to retirees, raising kids, paying taxes and paying a mortgage themselves a generation or two ago? (But not whining about how hard it was)

Id be the first to suggest that Australian society has now got a problem with wealth disparity compared to a few generations ago. Partly that is due to housing, but mostly due to the effects of assortive mating and Intergenerational wealth transfer. The wealth effect from housing (and most asset classes) may be in the process of correcting significantly anyway.

I’m not convinced changing the rules, after encouraging the population to save into Super is morally just, or indeed the solution to problem you describe.

I just realised I’ve given an off topic, political opinion oxygen. Perhaps we should not go too much further into this subject!

Hi Llati,

I’m in the self-funded retiree category paying no tax but I am sympathetic to some tweaks to the tax regime within superfunds.

The idea of slightly lower tax rate (ie. lower than the current 15%) on earnings while building your super (good for younger people) and a small tax on earnings once you are in pension phase ON BALANCES OVER A CAP of say $1.5 million doesn’t sound unreasonable, and probably fairer for young people trying to fund families and build for the future. We have adult children. We know how tough it is for young families at the moment, especially if you are trying to buy a home.

What I’m afraid of is that something like this could be the ‘thin edge of the wedge’ that erodes confidence in this wonderful super and franking credit system that is unique to Australia. This system is allowing hard working Australians to have control over funding their own retirement and encourages people to save for a better future.

Cheers,

Rick

That’s what super is for. So retirees don’t cost the state

Yeah, it doesn't seem like a good move to do something that would potentially drive more people back to the pension by reducing their ability to self fund?

The whole point of superannuation is to get people off the government teet and help them self fund retirement.

The pension is then there as a safety net for those who are unable to fund their own retirement for whatever reason.

Only change I could support would be taxing over a generous balance limit that is indexed to CPI e.g. $1.5M which increases every year with inflation to stay in touch wtih real costs.

I was reading an article about Super in the SMH - yes an actual hard copy - while getting my coffee the other day. I actually found myself agreeing with a lot of it, certainly the reasoning behind some of the discussion. There is no justification for having a $10m, $50m even $100 million Super fund other than using it for a tax haven: that kind of money is not "needed" for retirement. It is this that needs to be addressed and while I can see that it could be the thin edge of the wedge @Rick I also think that it is not in the spirit of why the system was created. Like many people here I imagine, we have an SMSF and we definitely use if for tax purposes - certainly not to those levels I can assure you - so any changes would likely directly effect us.

Would any side of politics be brave enough to repeal the proposed tax cuts for high income earners and then also change Super tax laws for the uber rich?

Gov also needs to keep in mind that with house prices where they are/going, younger people may not have the benefit of a home to fall back on. For some their super is their entire retirement. IMO this "cap" should account for the value of your home/primary asset

@markeewan you're being robbed. I use esuperfund to handle all my SMSF administration including auditor's report for $1000 a year.

Have been using them for 8 years and they have never put a foot wrong. End of year effort for me is 2-3 hours, but that's only because I have to manually record my US broker transactions. Aus transactions are fed in automatically from Commsec and ANZ bank.

Depends what you are getting for your monthly fee I guess but agree seems high. Does this include investment advice @markeewan ?

I visited the website and that looks like a good deal.

I received the same email from ausbiz. Others (such as Superhero) are starting to do similar things to democratise the self-management of Super. It's a great idea in theory but I have mixed feelings about whether it's really in many people's best interests. That's not a defense of some segments of the Superannuation industry, who have been appallingly bad at acting in members best interests. However, I think there are large segments of the community - not so much this audience - who might be attracted to take over management of their super if it was easy and cheap enough but are risking far more than they're aware of.

It just isn't that easy to beat the market, particularly when you're starting out and experiencing some of the mistakes - that we've all made (and continue to make!) - for the first time. If people did so and invested in broad indices (like NASDAQ) and maybe some satellite investments in ETFs around particular themes then I think they could do very well. However, I fear the temptation is to take on more and more risk and not appreciate investing is about risk-adjusted return.

I'm probably a closet leftie and would like to see a more equitable society and these initiatives do purport to do that but beware the wolf in sheep's clothing.

I got the same email and checked out the website for fun. It's quite ummmm...basic. I run our SMSF as a corporate trustee and it was really easy to set up (10 mins online through and several hundred dollars through topdocs). The service Stake are offering doesn't seem aligned with typical annual fees, so I'm a bit sceptical with those sorts of things (you get what you pay for) and inevitably there might be trailing fees etc. hidden somewhere or the service doesn't turn out to be what it claims to be. Typically accountants annual fees can be anywhere around $700-800 and then you have auditor fees on top of that. A good accountant does all required paperwork and lodges returns etc. with ATO so there is minimal to no cumbersome and clunky 'paperwork' other than providing information on returns (which trading platforms etc. provide). Setting up online trading accounts through various platforms is actually quite easy once you have your trust documents. Cheaper is definitely not better in the SMSF space and you need to have a really well considered financial plan/goals on why you are establishing one to begin with and what your investment strategy is - reviewed at a minimum annually.

I set up an SMSF about 6 months ago through https://growsmsf.com.au/ and use Stake as my broker account. Kris Kitto who runs growsmsf is also the head of Stake SMSF so I am fairly certain the backend systems and processes are the same. I have had a really good experience. The setup process was all online and automated, not such a huge hassle like the industry makes out. Have to say I am loving having control over all my super investments. I haven't been through an audit process yet, but I only have shares in my SMSF so it should be fairly straight forward.

I also got the email from Ausbiz - seems their marketing has ticked up recently, I don't recall getting daily emails a week or so ago. Looks like they've built a bit of traction in viewership which is good to see as I'm a fan of their content.

As for the SMSF, I also had a (very) brief look but swayed away.

For me personally I want my Super to be set and forget for a number of reasons, some have already been captured in previous posts below, but mainly:

1. I do not want my "Behavioral self" to react to market conditions and begin picking when may be the top or the bottom of the market. I can easily see myself starting out a SMSF in a "correct manner" averaging into long term reputable stocks or ETFs but then getting caught up in market talk and next minute I'll be near on day trading.
2. I don't have the time to be doing to due diligence it deserves, I work fulltime, study part time (MBAs are a pain) and still want to lead a somewhat social life, and keep my fiancé happy (the hardest of the lot)
3. I'm with AusSuper - they've had excellent performance over recent years, as have other industry super funds *insert hand sign here*
4. Let's not forget that the last ~18 or so month have been very favorable market conditions. So it's important to analyse how this is affecting your current decision making. It's been a bullish market for sometime so sure, a SMSF would be easy now, but what about when the market turns?

If you were to look as a SMSF, I'd suggest 'dipping your toes in the water' and going with an option inside the industry super fund that allows you to invest in the ASX300 or "vanilla" ETFs like AusSupers' Member direct or what ever equivalents HostPlus or Cbus has to offer.

Please note, I'm the furthest thing from a Financial advisor, so don't take any of this as advice, general information only (blah blah) merely my 2-cents and thoughts as I have pondered this before too. @Noddy74 has made some good points below.

Nor am I trying to pump AusSuper here, it's just merely what I'm with and what I have been happy with.