I am a superannuation cynic. I have no problem with it being a choice, but any whiff of compulsion gets me very nervous. You see, I have experienced the "joys" of compulsory super in Australia.
When we left in 2003, we had already lost half the money that we'd put into our compulsory super schemes since the compulsion in Australia began. Things had got so bad with super schemes at that time, that in desperation, we had set up our own private super scheme and just put the money in the bank. It was cheaper paying all the fees to do this than it was to continue to lose money in the way that we had been. It was the smartest super decision we had made, and stopped the haemorrhaging of what little was left of our money.
Australia's equivalent of the Financial Services Council at the time had the gall to suggest that if super contributions were raised to 20% of income, then all would be sweet. What's more to the point, if the super scheme companies only took as service fees a proportion of the profit made each year, then many people's super would be fine.
From what I could see, the only people that really benefit from compulsory super are large super companies, who must be hoping like heck that such a scheme is implemented here.
In the meantime, we are still trying to make a dent in the mortgage so that we are mortgage free by the time we retire. I'm always amazed to think back to my Dad, who was able to pay off his mortgage in two years by taking a second job in the 70's. Mortgages as a proportion of income must have been so much smaller back then.
Every once in a while I think about the remainder of the super money that we have in Australia - it would be so much more useful parked against our mortgage, even if it was in a separate account that couldn't be touched. Some how I doubt there will be anything left of it by the time we retire, but in the meantime I'll know that I've made some large super company stay in business.
Related link: Bigger chunk of KiwiSaver 'to save Super'
When we left in 2003, we had already lost half the money that we'd put into our compulsory super schemes since the compulsion in Australia began. Things had got so bad with super schemes at that time, that in desperation, we had set up our own private super scheme and just put the money in the bank. It was cheaper paying all the fees to do this than it was to continue to lose money in the way that we had been. It was the smartest super decision we had made, and stopped the haemorrhaging of what little was left of our money.
Australia's equivalent of the Financial Services Council at the time had the gall to suggest that if super contributions were raised to 20% of income, then all would be sweet. What's more to the point, if the super scheme companies only took as service fees a proportion of the profit made each year, then many people's super would be fine.
Politicians are divided over a suggestion by the Financial Services Council for an increase in KiwiSaver contributions to 10 per cent of incomes to help pay for Superannuation.
The council, which represents investment and life insurance companies, says raising KiwiSaver contributions by 1 per cent a year will enable people to still retire at 65, despite the growing costs of the scheme because of the ageing population.
From what I could see, the only people that really benefit from compulsory super are large super companies, who must be hoping like heck that such a scheme is implemented here.
In the meantime, we are still trying to make a dent in the mortgage so that we are mortgage free by the time we retire. I'm always amazed to think back to my Dad, who was able to pay off his mortgage in two years by taking a second job in the 70's. Mortgages as a proportion of income must have been so much smaller back then.
Every once in a while I think about the remainder of the super money that we have in Australia - it would be so much more useful parked against our mortgage, even if it was in a separate account that couldn't be touched. Some how I doubt there will be anything left of it by the time we retire, but in the meantime I'll know that I've made some large super company stay in business.
Related link: Bigger chunk of KiwiSaver 'to save Super'
It's obscene the tiny rates of return made by some so-called professionals.
ReplyDeleteFool.com is a good web site for investing, but sadly it's US based.