What’s new at The New Daily?

I was just checking on what our admin charge is buying these days over at The New Daily (very little by the way).  (Yes, I know what you are thinking – I will withdraw my funds from Australian Super, but I have to get some free time to work things out.)

And here is this ‘helpful’ piece from Susannah Guthrie.  I am wondering whether this is some sort of parody because it is really hilarious.  Here are her tips (is she a registered financial planner, I wonder):

  • Pay down your mortgage (actually made more difficult because of compulsory superannuation);
  • Contribute extra to superannuation, even if your are a low-income earner;
  • Monitor the suitability of your superannuation funds, including the fees charged;
  • Take advantage of splitting superannuation balances between couples;
  • Pay off all your personal debts, including credit card debts, but don’t even think of helping your children with their debts (evidently, debts to schools can be ignored according to this weighty piece).

The only thing she didn’t add is to enjoy yourself in these amazingly straitened circumstances in which you are paying off your mortgage and other debts as well as making voluntary contributions to your superannuation.

I wonder what kind of world she is living in?  Maybe it’s the kind of world in which Daddy picks up her expenses (contrary to the advice of her column) because Daddy tells us Susannah is working as an unpaid volunteer to The New Daily.

Here it is:

As with most things in life, it’s best to get in early when it comes to sorting out your superannuation.

But if you’ve waited until middle age to start thinking about retirement, don’t panic.

The New Daily brings you some failsafe tips for salvaging, managing and increasing your superannuation once you hit the big four-zero.

Eliminate debt

Greg Harper, general manager of advice services at CBUS, says that the main cost for people in their 40s is a significant mortgage.

Do whatever you can to eliminate this and any other non-income producing debt, such as money that you owe on credit cards.

This means “living within your means by earning more or spending less,” Mr Harper said.

Look at your retirement goals

Empowerment coach Linda Fitzhardinge of Women Building Wealth says that most of the women in her seminars say they want to retire at 55.

A younger retirement age coupled with an increasing life expectancy means that people are now looking at a longer retirement and need to start planning accordingly.

“My motto is set it up in your 30s and make it in your 40s,” Ms Fitzhardinge said.

ASIC’s MoneySmart website offers a retirement planner to help you see where you’re currently placed.

If your findings are worrying, ASIC advises you to consider opting for a more modest lifestyle.

According to the Association of Superannuation Funds Australia, a comfortable retirement income for a couple can cost about $56,000 a year.

Split super with your spouse 

There are benefits to creating superannuation equilibrium within your marriage, although Mr Harper advises that super-splitting requires a certain degree of financial advice before couples take the leap.

Contributing to your non-working or low income-earning spouse’s superannuation may enable you to receive an 18 per cent tax offset on contributions of less than $3000, according to ASIC.

While this is great, don’t rely on it completely.

Ms Fitzhardinge reminds those in their 40s that, unfortunately, this is the age that the divorce rate tends to rise.

Make sure your own super is in good condition and avoid relying completely on your spouse.

Salary sacrificing

If you earn more than $37,000, salary sacrificing can be a good way to grow your retirement nest-egg.

It involves giving up some of your take-home pay (for now, at least) and asking your employer to contribute it to your super instead.

By putting away some of your before-tax earnings, you will be taxed at the special rate of 15 per cent, allowing you to save money in more ways than one.

Reduce your fees

Ms Fitzhardinge recommends assessing your fund every two years to make sure it isn’t costing you too much money and is suitable for your current life stage.

In other words, the fund you contributed to in your 20s may no longer be appropriate now you’re in your 40s.

Evaluate your investments

Educate yourself about where your super is invested, how much risk is involved and whether it’s appropriate for your goals.

Consider investing in other areas too, or buying shares to help spread your risk and increase growth.

If you think it’s too late to invest in property, think again.

Ms Fitzhardinge advises you to seek out like-minded people in a similar situation and partner with them to enter the property market if doing it alone seems intimidating.

Have a Plan B

A lot of careers have a “shelf-life”, according to Ms. Fitzhardinge.

As such, it pays to have a back-up plan.

Choose something that you love, in case you suddenly find yourself without a job and your savings are insufficient to live on.

Maintain your skills and be prepared to consider drastic options like selling the family home or seeking a part-time job.

Be selfish

Preparing for your finacial future is a bit like dealing with an emergency in an aeroplane.

“Put your own mask on before assisting those around you,” Ms Fitzhardinge warned.

Don’t pay other people’s debts when you haven’t dealt with your own.

This means prioritising your mortgage or credit card payments before getting caught up in your kids’ school or university debts.

If this sounds harsh, remember that paying for absolutely everything in your family members’ lives will prevent them from learning important financial planning skills.

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24 Responses to What’s new at The New Daily?

  1. Walter Plinge

    This is the same boiler-plate pap you get on any superanuation funds’s website. Not one single original or useful idea here. It really gets up your nose to be patronised by lightweight types like Guthrie,

  2. ar

    You read that article? No one reads those…

  3. H B Bear

    Don’t forget folks – it’s not nepotism if you’re not paid.

    I’m not sure what it is though. Work experience? Charity? Therapy?

  4. miker

    Thanks Judith
    I read your original article on this matter and like you I disagree with industry funds as part time media companies.
    It’s not core industry Super fund business and I can only see it spending some of their budget all of which comes from members funds with little or no chance of return. Its only a disguised marketing tool for super really.
    Whereas once I was somewhat content with my fund, I am now looking around and comparing its fees and salaries with other industry funds that are not part of the media cartel.
    Yes and that homework has shown me that I can do better if I switch!

  5. Andrew

    Anything with “Wymin” and “Wealth” in the name makes the “property spruiker” light flash wildly for me. Also when their coaches write stuff like

    “There are a lot more women getting into investment property,” Ms Fitzhardinge said.

    More than what? Is that an argument from authority, by consensus? Should that be a contrarian signal?

    Should it turn out that a bunch of Wymin blow up from being “empowered” into lots of investment property poorly selected by conflicted advisors, then what? Why is AusSuper creating a venue for this unlicensed, uncontrolled “education not financial advice” to advertise?

  6. Jannie

    I have fairly big fund with Australian Super, it decends from Agest – a fund I made voluntary contributions towards for a number of years, my wife has an even bigger fund with them. I have looked at SMSF options, but its a bit messy, and AS has done OK in terms of market performance. Their fees are low, I have been stung in the past with fees in private contributory arrangements, Macquarie and AMP for eg.

    It does concern me that they have Union and Leftists moonbats on the board, not to mention Paul Howes and Heather Ridout, but so far the performace of the fund has been OK, and the fee structure is low. I am a bit concerned about their commitment to “Sustainability”, but so far that appears to be window dressing.

    But if they really do start up a News agency type propaganda outlet, I will seriously look for alternatives. We still have a couple of properties which we could pay off under a SMSF arrangement, maybe. But despite my reservations, AS looks OK to me, I mean does anyone want to punt on a better alternative?

  7. mundi

    These kinds of things go hand in hand with the absolute non-sense that is super.

    Super will be the one that ends up causing people to live the majority of their years in near poverty.

    I have a $200k mortgage, but I have $150k in super. Makes no sense at all, as interest rates have averaged higher than super returns. All I am doing is putting $$$ into union pockets (doesn’t make sense to do SMSF until you have about $220k due to all the ‘compliance’ costs).

  8. Bruce

    Hard being a young media and communications graduate. So many kids do it nowadays and the quality of the course can be miserable. Unpaid internships are pretty soul destroying, and worse at dad’s business. If there are no jobs I guess you take what you can.

    If Ms Guthrie reads this she might consider applying to the Australian Diplomatic Service, her CV looks quite good for something like that.

  9. MemoryVault

    Anybody under 60 who actually believes they are ever going to see any of their Super at retirement age, except as a government paid, assets and income tested “age pension”, is seriously delusional.

    Those who refuse to learn from history are condemned to repeat it, and we’ve been here before.

  10. Anybody under 60 who actually believes they are ever going to see any of their Super at retirement age, except as a government paid, assets and income tested “age pension”, is seriously delusional.

    Upon my retirement at the age of 80, I expect to open the box and find in it some moths and a little note saying IOU, signed by the Federal Government.

  11. MemoryVault

    Upon my retirement at the age of 80, I expect to open the box and find in it some moths and a little note saying IOU, signed by the Federal Government.

    That’s what happened with the last lot, the last time around.
    99% of the readers here and, I suspect, most of the contributors as well, think the current Age Pension is a welfare payment like the dole.

  12. stackja

    Philippa Martyr
    #1112816, posted on December 16, 2013 at 5:33 pm
    Anybody under 60 who actually believes they are ever going to see any of their Super at retirement age, except as a government paid, assets and income tested “age pension”, is seriously delusional.
    Upon my retirement at the age of 80, I expect to open the box and find in it some moths and a little note saying IOU, signed by the Federal Government.

    Plus a demand for fees from your friendly fund manager.

  13. Andrew

    Let’s assume for a moment that anyone seriously believes that confiscation will occur. In what form? Which party (not govt – party, as it would have to be closed down afterwards) is going to actually commit suicide by appropriating $1tr – which is still, despite our attempts to chase Spain, considerably more than the govt actually owes? What High Court will uphold overturning centuries of Trust law? And what of SMSF? Are they actually going to hand over the money when they are their OWN trustees?

    Anyone who seriously believes this, and has a substantial balance – have you taken steps to get a HK passport and transfer your balance to the HK pension system? Or any other jurisdiction with low tax that you trust more (perhaps NZ)? If not, why not?

  14. MemoryVault

    Andrew,

    Let’s assume for a moment that anyone seriously believes that confiscation will occur.

    Who said anything about confiscation? They have already told us how they intend doing it, but you (and apparently pretty-much everybody else) just weren’t listening.

    I have no idea what they will do about SMSFs, but, when the time comes, most people with money in the established funds, will be grateful.
    Just like last time.

    As I said earlier, those who refuse to learn from history are condemned to repeat it, and we’ve been here before.

  15. Bons

    For heavens sake, I thought that this was a libertarian blog. It’s your money, how can you not run an SMSF. Why on earth would you trust your money to a bunch of 25 year old economics graduates, whose employers primary objective is – what?.
    A few hours study and a bit of entertaining record keeping gives you independence, and a sense of controlling your own destiny – what could be better when contemplating the excitement of retirement?
    Why does the Left hate SMSF? As always, the Left hate any group that demonstrates themselves to choose not to be dependent on or beholden to the State.
    Judith, with your credentials I am amazed that you trust one cent to the machinations of the Union Super fraud.

  16. Andrew

    90% of the SMSFs out there SHOULD NOT EXIST Bons. There are WAY more SMSFs in the country than there are competent people with sufficient balances to achieve economies of scale AND who cannot implement member choice ideas better through other means. A good platform will let you direct to almost anything that takes your fancy for a miniscule price, and avoid giving the money to any union officials at all.

    I have one, I didn’t bother until my balance passed $500k. I have it for very specific reasons – 75% of what’s in my SMSF cannot be chosen from an industry fund’s user-choice menu or from a selection of platforms. (I do also have some ASX-listed securities, which – since I have already absorbed the cost of the SMSF, have zero marginal cost that they would NOT have in a wrap.)

    I also have a “union fund,” not because I want to support their lifestyles but because they have more buying power for something I DO value (SCI insurance) than I do.

    A libertarian would not pay double for insurance just to reduce the balance of HostPlus by 0.00001%.

  17. duncanm

    Yes, I know what you are thinking – I will withdraw my funds from Australian Super, but I have to get some free time to work things out.

    Ditto.

    I had two entirely unsatisfactory explanations from the wonks in Australian Super when I queried why my admin fee was being splashed about like this.

    SMSF or something low-fee like ING.

  18. dan

    Memoryvault it would be more useful if you pointed us to some primary sources.

  19. Leigh Lowe

    - Pay down your mortgage (actually made more difficult because of compulsory superannuation);

    - oh, and download bread and dripping recipe.
    .

    – Contribute extra to superannuation, even if your are a low-income earner;

    Really? Any analysis to justify this throwaway line? What is “low income”? $10k? $30k? $45k?
    .

    – Monitor the suitability of your superannuation funds, including the fees charged;

    Brilliant! Avoid high fees. Just … Wow!
    .

    - Take advantage of splitting superannuation balances between couples;

    Um, darling, you can’t split super balances, only contributions.
    .

    Pay off all your personal debts, including credit card debts, but don’t even think of helping your children with their debts (evidently, debts to schools can be ignored according to this weighty piece).

    Classic banality straight out of Kochies homespun financial advice playbook.

    And this pearl ……

    ASIC’s MoneySmart website offers a retirement planner to help you see where you’re currently placed.
    If your findings are worrying, ASIC advises you to consider opting for a more modest lifestyle.

    What?
    So if I won’t have as much money as I thought I will have to spend less?
    No shit, Sherlock!

  20. MemoryVault

    Dan,

    Just what exactly would you like me to point you to?

    From memory, the Australian government of the day introduced a compulsory superannuation scheme of 9% of your gross earnings around 1910. It was collected with your tax, and to THIS DAY forms part of the tax collected – it was never rescinded. Up until 1971, and possibly later, an annual income tax return form was headed “Income Tax and Compulsory Superannuation Return”.

    Now in return for those contributions you get what is widely believed to be a welfare payment called the Age Pension, which is assets and income tested. This is because in the Sixties the politicians of the day decided to withdraw the accumulated superannuation funds and spend them on ” public infrastructure”. It was sold as a good idea that would reduce the need to raise taxes, and was generally heartily accepted at the time.
    .
    Despite the so-called “economic crisis”, in the very first media interview by our new Treasurer, he spoke instead at length on the “need” to attract private investment in public infrastructure spending. He spoke glowingly about what a good idea it would be if Australian Superannuation Funds could be “allowed” easier access to investing in public infrastructure.

    He spoke glowingly of a plan for Treasury to issue government guaranteed “infrastructure bonds” which could be bought by Super Funds to “allow” them to “invest” in public infrastructure, to the “advantage” of their members. Such a transfer of funds would allow the government to funnel super funds into “infrastructure” projects, which in effect will mean handing the funds over to favoured corporate interests – JUST LIKE LAST TIME.

    .
    And when the “infrastructure investments” fail to be able to pay the promised returns (much like last time), the government of the day (which will be a different government than the one initially responsible), will come to the rescue and “save the day”, by appropriating ALL of the super funds and paying out a set lifetime pension, to everybody. JUST LIKE LAST TIME.

    And for all of you fat Cattalaxians out there boasting of your $500K plus super funds, who don’t believe this could ever be possible, just remember the average couple have less than $200,000.00 in Super between them, enough for about five to six years, assuming they don’t have a residual mortgage to pay off, which most of them do.

    THEY will think it is a “super” idea (pun intended), and as voters, they outnumber you twenty to one.

    .
    Now Dan, since almost all of this is either recorded history or recent, reported news, what “primary source” would you like me to point you to?

  21. Another Dan

    Memory Vault! Spot on. That treasurer who just not long ago disappeared somewhere. He may have just decided to retire on a nice pension indexed for life,(a bit like that bob bloke), was reported as saying, these people who have too much in their super aren’t paying enough tax, so I shall hit any income over a certain level with another 15 percent. One of his mates in Treasury, “what’sisname kensomeone, also said treasury should look after super. Another good idea they cooked up with a little leprechaun who wrote a report, got paid a nice one then shot through to run a public company promoting long term savings as annuities, thought it would be a good idea to save all the people with small balances in their funds to either transfer them to funds where the fees are going to be higher and carry a life insurance premium which would eat up what they had in double quick time or transfer there balances to the Tax Office and you know what would happen to it there.
    Now Dan! That is another pointer for you.

  22. Truthseeker

    MemoryVault,

    You say,

    Anybody under 60 who actually believes they are ever going to see any of their Super at retirement age, except as a government paid, assets and income tested “age pension”, is seriously delusional.

    Well I am under the age of 60 and I do not expect to get any pension from the government. I have about 15 years left in the work force, I have no mortgage, a commercial super fund that I am my employers have been contributing to all my working life and over $300,000 available for investment into property (which will occur when the current market peak is over).

    I for one am not delusional.

  23. Andrew

    Bullshit. You think people with “under $200k” will love the idea of confiscation. But look at the bleating about the “loss” of low income contributions (“funded” by the MRRT), and that’s on the order of $hundreds. People will simply NOT vote for confiscation, or indeed any govt action that makes them even $1 a week worse off.

  24. MemoryVault

    Andrew,

    You keep harping on about “confiscation”. Nothing is going to get “confiscated”. That’s not how they work. Besides one cannot “confiscate” that which no longer exists.

    The first two steps are in the process of being planned and implemented right now.
    There’s the “infrastructure bonds” which I have already outlined, and which have been openly reported in the MSM. That allows transfer of monies out of the super funds, to the corporate sector.
    The other step which has also openly been discussed, is the “necessity” of making it “harder” for people to draw out their super on retirement – for their own good, naturally.

    Substitute “ever-increasing preservation age” and “punitive tax rates” for “harder”, and within five or six years you have a situation where most people will be drawing a “pension” from their private super fund – in most cases topped up with a part-payment of the government Age Pension, since most people don’t have enough private super to fully negate entitlement to the Age Pension.

    Then will follow a period wherein returns from the super funds will dwindle as the “infrastructure investments” fail to produce the anticipated results, and people will start to demand the government “do something”.

    Throw in on top of that a GFC style crash like 2008-2009 when many people lost upwards of 30% of their super nest egg, and around 80% of retirees and about-to-be-retirees will be clamouring to swap their theoretical $100,000.00 worth but actually now-worthless “infrastructure bonds” for a full government pension.

    It will then take about another ten years for the general population who weren’t involved in, or affected by any of this – all those under 30 now – to start whining about having to pay taxes to support all those old bludgers on age pension “welfare” who didn’t have the good sense to “provide for their own retirement”.

    JUST LIKE HAPPENED LAST TIME.

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