use 16 to calculate how much is enough for retirement

Originally posted by cafa ↑

'Over my working life I paid 15% and 30% contribution tax, tax on earnings in the fund , and tax on pension upon retirement.'

Occam, appreciate your view. However we need to take the emotion out of any argument, and look at hard numbers.

If you paid 30% tax on money going into super them you would have been on very high levels of marginal tax, and probably still got best end of a 20% tax saving. If you invested this outside of super you would have had about 20% less each year in which to invest.

On an ongoing basis your super funds would be paying tax on income at 15% or eventual capital gains at 10%. Investments held outside of super would be taxed at about 50% and 25% respectively.

Over a number of years the above differentials are huge impact to the final outcome. Secondly any growth assets in super would never get taxed if held until pension phase.

I just don't see how super was not a gift for you. compared to investing outside of super.

Lastly if you are paying tax on your pension then either you have in excess of $1.6m in super, in which case these additional funds are being taxed at 15% or 10%, OR you have a government service pension where it was unfunded and thus is just another income stream. Even if the later, there are significant tax benefits that would avoid anywhere near marginal rates of tax. There are other reasons but would only impact a very small minority of folks.

Can there be better ways of funding pension, yes for sure, and I'm not suggesting that what we have is the best there can be. I only make the point that if one is happy to tie up funds until 60,then super if a gift from the taxpayers of Australia.

In relation to property, then one can do this within super or outside, and the same data points above are still relevant.

Best.

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my smsf isn't a gift from taxpayers. it's my gift to them that ensures that they won't have to fund my retirement.

in the circus leading up to the last election, it was hugely disappointing that people who should know better didn't openly push back hard against this garbage being spouted about super being a "rort" or a "gift".

if you offered people a way to get some relief from highly punitive income tax rates in a way that incented them to look after their own financial future, which would in turn lessen the percentage of ageing population that will be dependent on taxpayers in retirement, wouldn't that be a good thing? it was one of the few things that we were doing well but it's now slowly being wrecked by small mindedness and politicking.

it's particularly galling to hear about financial advisers telling people with super amounts above the pension means test to spend/blow/give away funds that will enable them to get back below the amount required to receive a full pension. this doesn't seem to get any air time when the super "problem" is discussed.