I saw many peoples super funds decimated during the GFC which...

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11/06/19

08:29

Post #: 38993398
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Originally posted by Hittman ↑

I once was an avid fan of compulsory superannuation, not a complete fan of the compulsory side of it but understood the reasoning.

Now, I am less a fan and am actually becoming concerned. The changing of rules and moving of goal posts are making superannuation less and less attractive to me.

Certainly, I can not bring myself to contribute extra to superannuation and have not for a number of years now.

Changes that have occurred over the last few years have mostly been about limiting your ability to access your own money.
You once could access your superannuation fund at anytime if you commenced a super pension/annuity from it. That was stopped many years ago.
If you were leaving the country permanently you could take your superannuation with you, now you can't. It has to remain in the country until you reach your preservation age.
The Transition to Retirement age was raised from 55 to 60 (Baby Boomer excepted I believe)

If you're GenX or younger I'd really be questioning whether contributing extra into superannuation and having it locked away for another 10 years or more, subjected to unknown changes, without any means of moving your money out. Tax benefits alone are not enough to take that risk imho.

I do agree with the $1.6M Cap on tax free status. 5% draw down on that is $80k a year, $80K a year tax free is a generous income.
Every balance under that is tax free.
Changes I see happening in the next 5 years include but likely not limited to are,
Raising the preservation age.
Limiting Lump Sum Withdrawals
Compulsory Pensions or Annuities to be taken.

I also fear a liquidity problem for Superfunds down the track due to an ageing population, low wage growth leaving a strong possibility of more money coming out than in to funds in the future,

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I saw many peoples super funds decimated during the GFC which occurred not long after Howard announcing that there was an opportunity for people to contribute up to $1million. Many people do not seem to understand that unless there super is in cash deposits it can and will go negative in major events like the gfc turning $1million super funds into $500k funds very quickly.
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