Thread: Superannuation question for my Dad

The ABC reports today

Retail super funds aren't matching it with banks - ABC News (Australian Broadcasting Corporation)

that from 1996 to 2010 the returns on super were less that you would have got just stuffing it in a term deposit at a bank. So I suggest you get them to put it somewhere safe ASAP.

I know my super fund allows me to swap my balance around at no charge, I have done it 5 or 6 times now & can't see where they have charged me.
I put mine in cash last week, the warnings have been pretty obvious.
It's too easy to say you will "lose" by doing so & hanging in with a share based portfolio. I "lost" 6k but, had I stayed it would have cost me another $1350 - and that is in 2 days.
Your dad needs to do what is comfortable for his well being long term &, for me, it was getting out of the risk element & hope to buy back in when things start to improve again. The only difference is I have a few more years in the workforce.

In early Aug when the US crisis was going on I moved my super to cash management fund and bought back in when things stabilised - made a few thousand on that - unfortunately I then fell ill and was not able to watch the trends over the past few weeks so am still in so riding it out - as soon as there is a pick up my more risky funds will be going to cash management funds until we are back in a bull market.

Made a fair bit in the time from 03 (start of Iraq war) to the GFC - lost heaps in the GFC, lost heaps in the first Greek crisis and lost heaps since April.

There has to be a better way to do super - my capital is about 10% behind - would have been better off putting the money under my bed, better would have been in term deposits - over 10 years I would have been $150K better off just putting my money in Cash Management Funds paying about 4% on average.

Garry

Hi,
Sounds like you should move it to cash if the market is going down. But will you get it back to shares before they have risen and you have missed the boat.
Always a difficult move, especially as your Dad is now looking at what will be a very short term investment.
Start moving on getting the paper work ready for the Aged Pension as soon as possible. It took me a few weeks to get mine ready, and I had to get some more papers after my first submission - stuff to do with identification and employment and bank accounts etc. My first payment came through calculated from my 65th birthday.
It is a bit of a pain, but the staff in the Age Pensions section (in our town at least) are very understanding and friendly.
My parents lived solely on the Aged Pension quite comfortably, owning their own house and living simply.
As soon as he gets his pension card, check with Telstra, Power company, Vehicle Registration, Water, Public transport, City Council etc for pensioner discounts on the various utilities. The savings are considerable.
cheers

Get it out of a fund with lots of shares exposure. Get it out of any private sector "for profit" fund with fees. Where are your parents? Have a look at Q-Super. It is a state govt. fund that now accepts contributions from other areas. It is a bunch of public servants looking after their own money.

They will need to start an allocated pension after they retire and claim an Age Pension. that amount thay have will not be aproblem with Centrewank. Unless they are living on acreage (2 hectares plus) then their assets are not likely to be a problem either.

they say super runs in cycles and there are highs and lows and long term look is what your supposed to take.
A bit stiff when you are just about to retire and things on the share market go belly up.
We all have this idea to enjoy retirement, caravan around the country. We don't expect to sell our homes to make ends meet and then perminately live in a caravan.
I've know a few old fellas that had to work right into their 70s and after 2 years of not working died. Where was their deserved put your feet up retirement?

Thanks guys.

I really should have taken more notice a couple of years back. But then hindsight an easy position to claim.

I'm sure they can live comfortably, just wish the peace of mind was easily achieved. My old man's carrying a few regrets, he was a great Dad, always the guy in the street that mowed the older neighbour's lawns, fixed their cars, drove my and my mates around when we needed, but pretty much from when they lost their house in the 80's, they've struggled to get ahead financially.

It would be great to see him sit back and feel he has a bit of security for once in his life. But if his super keeps going down, $3k in 3 months (plus his $3k in contributions), it's going to have him rethinking retirement, and that's not good.

Originally Posted by It'sNotWorthComplaining!

they say super runs in cycles and there are highs and lows and long term look is what your supposed to take.
A bit stiff when you are just about to retire and things on the share market go belly up.
We all have this idea to enjoy retirement, caravan around the country. We don't expect to sell our homes to make ends meet and then perminately live in a caravan.
I've know a few old fellas that had to work right into their 70s and after 2 years of not working died. Where was their deserved put your feet up retirement?

Exactly my fear. He has a heart of gold, he deserves time to do what he wants to do, without worrying whether he needs to work through part of his retirement years, he's earnt it.



The world would be a great place if there was lots of people like my old man around.