Author Topic: Australian Investing Thread  (Read 691647 times)

kiwiozearlyretirement

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Re: Australian Investing Thread
« Reply #2900 on: March 21, 2017, 07:34:29 AM »
Anyone know about concessional super contributions if you don't have a job. For example once you FIRE and are no longer earning a wage can you contribute the passive income you do make (rent, dividends etc) to your super concessionally. Or do you have to be 'self employed with an ABN?

mjr

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Re: Australian Investing Thread
« Reply #2901 on: March 21, 2017, 02:35:13 PM »
If you are not employed, you can make personal concessional contributions up to the cap, but you can't contribute more than you earn.

deborah

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Re: Australian Investing Thread
« Reply #2902 on: March 21, 2017, 02:59:23 PM »
If you are not employed, you can make personal concessional contributions up to the cap, but you can't contribute more than you earn.
+1, and you definitely don't need an ABN (I know this is tautology, as mjr said "personal").

Ozstache

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Re: Australian Investing Thread
« Reply #2903 on: March 21, 2017, 07:38:24 PM »
If you are not employed, you can make personal concessional contributions up to the cap, but you can't contribute more than you earn.

And even if you are casually employed, as long as the income from that employment is less than 10% of your total taxable income for the year, you can also make personal concessional contributions up to the cap.

FFF

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Re: Australian Investing Thread
« Reply #2904 on: March 21, 2017, 07:45:44 PM »
Anyone know about concessional super contributions if you don't have a job. For example once you FIRE and are no longer earning a wage can you contribute the passive income you do make (rent, dividends etc) to your super concessionally. Or do you have to be 'self employed with an ABN?

What deborah and mjr have said is correct, but don't forget that as of July 1 2017 any Australian will be able to make tax-deductible super contributions.

My question would be, why would you want to do this? Concessional super contributions are taxed at 15%, so you'd need to be passively earning over $18200 to make this worthwhile. Even then earning up to $37200 will only 'save' you 6% in tax (21%-15%) and then the money is locked up in super until preservation age. Maybe I've misunderstood the intentions, but I can only see this being beneficial if you are earning well in excess of $37200.


steveo

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Re: Australian Investing Thread
« Reply #2905 on: March 21, 2017, 09:01:10 PM »
Anyone know about concessional super contributions if you don't have a job. For example once you FIRE and are no longer earning a wage can you contribute the passive income you do make (rent, dividends etc) to your super concessionally. Or do you have to be 'self employed with an ABN?

What deborah and mjr have said is correct, but don't forget that as of July 1 2017 any Australian will be able to make tax-deductible super contributions.

My question would be, why would you want to do this? Concessional super contributions are taxed at 15%, so you'd need to be passively earning over $18200 to make this worthwhile. Even then earning up to $37200 will only 'save' you 6% in tax (21%-15%) and then the money is locked up in super until preservation age. Maybe I've misunderstood the intentions, but I can only see this being beneficial if you are earning well in excess of $37200.

Good points. Personally I don't add anything extra to Super because I will need that money earlier. I already have enough in Super to be financially fine from 60 onwards. It's getting to 60 which is the issue.

deborah

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Re: Australian Investing Thread
« Reply #2906 on: March 21, 2017, 10:21:19 PM »
There are a number of reasons to put concessional contributions in if you don't have a job.

If you are retired and are nearing your preservation age, you may want to add everything you don't need to superannuation. Simplistically, in the year before you reach preservation age, you may want to put everything except a year's worth of expenses into super, if it's two years away, keep out only two years' expenses... Since the concessional amount you can put in (after 1st July) is being lowered to $25,000, you may want to add to your super each year so you can put in as much as possible, as early as possible, and still leave yourself with enough to live on until you reach preservation age.

With each change to legislation, there are fewer years between preservation age and 65, when you cannot add to your super at all unless you are working. This reduced window of opportunity to transfer savings to super means that people probably need to start thinking about using concessional contributions well before preservation age.

That will leave you with less to add as a non-concessional contribution if you want to keep as much as possible in the tax advantaged environment of super. Given that the maximum amount of non-concessional contributions is also being reduced by successive governments, contributions throughout early retirement may be the only way in future to add to your super.

The earlier you have your money in super, the less likely you are to be badly affected by changes of legislation, as they tend not to be retrospective (ha ha).

Finally, when people retire, they tend to be more likely to move or downsize (both of which are generally CGT free) or to trigger other CGT events, so putting in concessional contributions in years when you do have CGT events may significantly lower your tax bill, even if you don't have a job.

As you must take out equal percentages of concessional and non-concessional super, adding NON-concessional contributions to super can reduce the tax your estate pays when you die, because it dilutes the relative percentages of each, and nothing else can. So it is worth while working out what form of contribution is best for you whenever you are adding to your super.
« Last Edit: March 24, 2017, 11:06:09 PM by deborah »

Little Bird

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Re: Australian Investing Thread
« Reply #2907 on: March 22, 2017, 12:05:06 AM »
Just wondering what everyone does with their emergency cash funds?
After a rude wake-up call I'm now looking to properly get my finances in order and I figured I'd start at #1 on the list!
I'm looking to close my Commbank account and bring about AUD$13,000 from overseas. I'm figuring a high-saver but it seems most want a regular deposit, which won't happen as I'm not working in Australia.
I've looked at finder and it lists a bunch. There's more bank there now than when I was last home and I guess I've really only ever experienced the big ones.
So just after some guidance on which ones might be better or ones to steer clear of.
Cheers!

Luckyvik

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Re: Australian Investing Thread
« Reply #2908 on: March 22, 2017, 03:26:23 AM »
I put my emergency fund in my offset account.


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Eucalyptus

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Re: Australian Investing Thread
« Reply #2909 on: March 22, 2017, 05:58:03 PM »
Now that I have a PPOR home loan, emergency funds also in offset account (technically, just in the homeloan account in my case, free redraws of any amount)

Eucalyptus

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Re: Australian Investing Thread
« Reply #2910 on: March 22, 2017, 07:50:05 PM »
Super Rebalancing:

I'm with UniSuper and really happy with them.

I just did my first ever rebalancing. I get one rebalancing per financial year for free. Extra rebalancings cost $13.50.

I can alter my contributions strategy at any time for free....so I could go to the effort of calculating optimum distribution strategy regularly in an attempt to rebalance my portfolio more often with no fees (just as you should outside Super, to avoid sell/buy rebalance events). I now have almost $21k in Super (years of being a student or postgrad or lowly paid Ecologist, having casual jobs with multiple super accounts, etc, leaves my Super not that great at 32 years old). I've spread my asset allocation across ten different holdings, some of which are diversified in themselves between asset classes. At this current $ level I'm not sure its really worth the effort of doing this. I would have to, from what I can tell, adjust this after every pay fortnight at this stage otherwise I would quickly get unbalanced in the opposite direction. In a couple of years when my Super is larger I think this effort will be more worth it.

My thoughts for now, until my super gets larger in a couple of years, is to do a rebalance at the start of each FY, and then pay the $13.50 for one on Jan 1st. Perhaps in between that at the three month mark, and nine month mark, I could do the distribution calculations and changes for a fortnight to get it back closer, and then change back to the default in the following fortnight. I might also be able to do that at Jan 1st to rebalance successfully, rather than pay the $13.50.

Anyone have other ideas?
Anyone recommend a distribution rebalancing calculator when you have 10 assets to rebalance?

deborah

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Re: Australian Investing Thread
« Reply #2911 on: March 22, 2017, 08:37:33 PM »
This is a lot of work. Vaguard looked into how often you should rebalance, and concluded:

Quote
we conclude that for most broadly diversified stock and bond fund portfolios (assuming reasonable expectations regarding return patterns, average returns, and risk), annual or semiannual monitoring, with rebalancing at 5% thresholds, is likely to produce a reasonable balance between risk control and cost minimization for most investors. Annual rebalancing is likely to be preferred when taxes or substantial time/costs are involved.
The dates you have chosen are just before you get your quarterly dividend from Vanguard, so you could alter your contributions strategy at that point, and get the dividends to do the rebalancing for you, without paying a cent.
« Last Edit: March 22, 2017, 08:40:58 PM by deborah »

GT

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Re: Australian Investing Thread
« Reply #2912 on: March 22, 2017, 08:40:04 PM »
And at 32, your core choices should be growth, growth and more growth, how much rebalancing do you need to do on that?

cakie

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Re: Australian Investing Thread
« Reply #2913 on: March 22, 2017, 08:40:12 PM »
I would have thought once a year is plenty for rebalancing. Especially if you have to pay for more frequent changes... I never rebalance my super, but i don't have much

Why do you have 10 different types in your allocation? Seems overkill on a small balance when there are single diversified options available that rebalance for you. What are the 10?

Eucalyptus

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Re: Australian Investing Thread
« Reply #2914 on: March 22, 2017, 08:47:52 PM »
I just found this tool:

http://optimalrebalancing.tk/?i=1

Works well.

I created a spreadsheet in excel to help be do the calcs (If I could be bothered I could incorporate their calcs into one sheet, might take a while, though it would save me maybe 60 seconds each time).
Basically I log into Unisuper (easy), input the current 10 asset $ values into my excel sheet. Copy and paste a box of info into optimal rebalancer. Then input the $ back into the spreadsheet to get the new distribution % for the next fortnight.

Then click on the change button in unisuper. Input the new %s. Confirm it.

In all should take me less than five minutes!

For the next fortnight I can just log into unisuper and change it back. Or I can rebalance again using the above method.

deborah

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Re: Australian Investing Thread
« Reply #2915 on: March 22, 2017, 10:52:49 PM »
Why would anyone want to rebalance every two weeks?

misterhorsey

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Re: Australian Investing Thread
« Reply #2916 on: March 22, 2017, 11:54:25 PM »
There may be only a $13.50 fee for rebalancing, but does it also subtract a fee for buy/sell spread?

If so, that second fee won't be charged to you so you won't be out of pocket - but it may be taken out of your funds to cover brokerage/admin.

kiwiozearlyretirement

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Re: Australian Investing Thread
« Reply #2917 on: March 23, 2017, 10:18:15 AM »
Anyone know about concessional super contributions if you don't have a job. For example once you FIRE and are no longer earning a wage can you contribute the passive income you do make (rent, dividends etc) to your super concessionally. Or do you have to be 'self employed with an ABN?

What deborah and mjr have said is correct, but don't forget that as of July 1 2017 any Australian will be able to make tax-deductible super contributions.

My question would be, why would you want to do this? Concessional super contributions are taxed at 15%, so you'd need to be passively earning over $18200 to make this worthwhile. Even then earning up to $37200 will only 'save' you 6% in tax (21%-15%) and then the money is locked up in super until preservation age. Maybe I've misunderstood the intentions, but I can only see this being beneficial if you are earning well in excess of $37200.

I am looking at this as partner is close to preservation age and the tax treatment for retirees is just so generous. He has not got long to get it in there and his balance is relatively small. Currently passive income is just over $30000 so the thought was to contribute what was left over about the 18200 threshold. I'm not sure I understand about any australian able to contribute after June 30. Can they not do that now?

kiwiozearlyretirement

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Re: Australian Investing Thread
« Reply #2918 on: March 23, 2017, 10:22:58 AM »
There are a number of reasons to put concessional contributions in if you don't have a job.

If you are retired and are nearing your preservation age, you may want to add everything you don't need to superannuation. Simplistically, in the year before you reach preservation age, you may want to put everything except a year's worth of expenses into super, if it's two years away, keep out only two years' expenses... Since the concessional amount you can put in (after 1st July) is being lowered to $25,000, you may want to add to your super each year so you can put in as much as possible, as early as possible, and still leave yourself with enough to live on until you reach preservation age.

With each change to legislation, there are fewer years between preservation age and 65, when you cannot add to your super at all unless you are working. This reduced window of opportunity to transfer savings to super means that people probably need to start thinking about using concessional contributions well before preservation age.

That will leave you with less to add as a non-concessional contribution if you want to keep as much as possible in the tax advantaged environment of super. Given that the maximum amount of non-concessional contributions is also being reduced by successive governments, contributions throughout early retirement may be the only way in future to add to your super.

The earlier you have your money in super, the less likely you are to be badly affected by changes of legislation, as they tend not to be retrospective (ha ha).

Finally, when people retire, they tend to be more likely to move or downsize (both of which are generally CGT free) or to trigger other CGT events, so putting in concessional contributions in years when you do have CGT events may significantly lower your tax bill, even if you don't have a job.

As you must take out equal percentages of concessional and non-concessional super, adding NON-concessional contributions to super can reduce the amount your estate pays when you die, because it dilutes the relative percentages of each, and nothing else can. So it is worth while working out what form of contribution is best for you whenever you are adding to your super.

Thanks Deborah I found this helpful. I'm not sure how to contribute concessionally as I have always had an employer do it for me. How would we do it with dividends or interest?

kiwiozearlyretirement

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Re: Australian Investing Thread
« Reply #2919 on: March 23, 2017, 10:52:44 AM »
Ok if you are contributing to a super fund you have to submit a form before the end of the tax year 'notice of intent to vary or claim a deduction for personal super contributions'. Apparently super funds have their own form for this.

I had a go working out what the actual benefit might be of the paltry passive income partner earns.

Earn $30000

Scenario A = Contribute $10000 to super concessionally
Pay 15% tax  leaves 8500 in super                 $8500

Taxable income               $20000
Pay tax $342 (0.19x1800)   - $342         19658

Total money at year end                           $28158

Scenario B = No super contribution

Earn 30000
Pay tax (0.19 x 11800) $2242         
Total at year end                              $27758

This seems to put $400 in our pocket I know it is not much but I would still pick up a dollar in the street if I found it.
Have I got this concept correct?



deborah

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Re: Australian Investing Thread
« Reply #2920 on: March 23, 2017, 12:55:15 PM »
Don't forget that if you are on a low income and you contribute to super, you get the government co-contribution, but only if at least 10% of your income came from working.

marty998

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Re: Australian Investing Thread
« Reply #2921 on: March 23, 2017, 02:47:13 PM »
Has the tax rebate in super been abolished yet (was it this year or next year?)

Seem to recall the Liberals wanting to get rid of it. This measure provided for rebating the 15% tax on employer super contributions for low income earners because tax in super was worse than their personal tax rates - so it would be better to receive wages instead of super.

deborah

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Re: Australian Investing Thread
« Reply #2922 on: March 23, 2017, 05:04:14 PM »
I'm not sure I understand about any australian able to contribute after June 30. Can they not do that now?
The self employed can, but concessional contributions for the employed are via the employer, so if your employer doesn't have salary sacrifice you more or less can't (you can with termination pay).

mjr

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Re: Australian Investing Thread
« Reply #2923 on: March 23, 2017, 05:49:08 PM »
I'm not sure I understand about any australian able to contribute after June 30. Can they not do that now?
The self employed can, but concessional contributions for the employed are via the employer, so if your employer doesn't have salary sacrifice you more or less can't (you can with termination pay).

The rule about income received from employment needing to be less than 10% of the year's total income to be able to make personal contributions ends 30 June 2017.

From 1 July 2017, the 10% rule no longer applies.  Hence "any Australian (under 65) can contribute", subject of course to the $25,000 cap which will apply then.

FFF

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Re: Australian Investing Thread
« Reply #2924 on: March 23, 2017, 07:50:51 PM »
Ok if you are contributing to a super fund you have to submit a form before the end of the tax year 'notice of intent to vary or claim a deduction for personal super contributions'. Apparently super funds have their own form for this.

I had a go working out what the actual benefit might be of the paltry passive income partner earns.

Earn $30000

Scenario A = Contribute $10000 to super concessionally
Pay 15% tax  leaves 8500 in super                 $8500

Taxable income               $20000
Pay tax $342 (0.19x1800)   - $342         19658

Total money at year end                           $28158

Scenario B = No super contribution

Earn 30000
Pay tax (0.19 x 11800) $2242         
Total at year end                              $27758

This seems to put $400 in our pocket I know it is not much but I would still pick up a dollar in the street if I found it.
Have I got this concept correct?

Your calculations are correct, however don't forget the 2% medicare levy on top of the 19% income tax rate. Therefore you are effectively saving 6% on the $10000 you contribute to super, which puts $600 in your pocket.

Don't forget also to consider the low income tax offset in your calculations. The LITO effectively increases the tax-free threshold to $20543.

Also you mentioned that "submit a form before the end of the tax year 'notice of intent to vary or claim a deduction for personal super contributions'" My understanding was that you have to submit this form - and get a response back from the super fund - before you file your tax return. I've done this for the last few years (I'm self-employed) and typically wait until near the deadline for tax return submission. It's only when you submit the 'notice of intent' to your super fund that they deduct the appropriate amount needed to pay for tax.

FFF

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Re: Australian Investing Thread
« Reply #2925 on: March 23, 2017, 07:57:52 PM »
Sorry kiwioz, forget the bit above about medicare levy to be included. I've just seen that the medicare levy is not payable for low income earners below $21335, therefore not relevant. Still, as you say, $400 in your pocket is not bad!

https://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-reduction-for-low-income-earners/

Eucalyptus

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Re: Australian Investing Thread
« Reply #2926 on: March 23, 2017, 10:59:32 PM »
Why would anyone want to rebalance every two weeks?

I definitely don't want to rebalance every two weeks! This would be a correction I would do every 3 or 6 months in order to rebalance, for free, through my inputs.

It costs nothing to rebalance this way, its just changing how my distributions buy new assetts. The super fund charges nothing for me to do it (its just electronic on their part), I'm not selling anything, so there are no transactional costs to the fund either apart from buying more (which they will be doing anyway).

Luckyvik

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Re: Australian Investing Thread
« Reply #2927 on: March 24, 2017, 07:30:25 AM »
Sorry kiwioz, forget the bit above about medicare levy to be included. I've just seen that the medicare levy is not payable for low income earners below $21335, therefore not relevant. Still, as you say, $400 in your pocket is not bad!

https://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-reduction-for-low-income-earners/
Also you have to work out if you are better off contributing concessionally ie claiming a tax deduction or non-concessionally.
Non-concessionally if you contribute $100 you pay no tax in super (although presumably this is earned money you have already paid taxes on) if you contribute $100 and then put in the div290-170 to 'claim a deduction' then your $100 are taxed at 15% in super. Also if you claim a deduction then the contribution go into your taxable component of super which means that this portion is taxed when you die if not being paid to a dependant. So there are a number of factors to consider.

If you are considering contributing to your spouses acc there is an increase to the tax offset available from 1 July.

I suggest you have a read of the tax changes on the ato website:
https://www.ato.gov.au/individuals/super/super-changes/


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Luckyvik

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Re: Australian Investing Thread
« Reply #2928 on: March 24, 2017, 02:22:13 PM »
Has the tax rebate in super been abolished yet (was it this year or next year?)

Seem to recall the Liberals wanting to get rid of it. This measure provided for rebating the 15% tax on employer super contributions for low income earners because tax in super was worse than their personal tax rates - so it would be better to receive wages instead of super.
They're changing it from LISC low income super contribution to LISTO Low income super tax offset on 1 July, its effectively the same thing, the govt will contribute to a low income earners super acc so that they are not taxed more in super than outside it.


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cakie

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Re: Australian Investing Thread
« Reply #2929 on: March 24, 2017, 07:19:10 PM »
Anyone know about concessional super contributions if you don't have a job. For example once you FIRE and are no longer earning a wage can you contribute the passive income you do make (rent, dividends etc) to your super concessionally. Or do you have to be 'self employed with an ABN?

What deborah and mjr have said is correct, but don't forget that as of July 1 2017 any Australian will be able to make tax-deductible super contributions.

My question would be, why would you want to do this? Concessional super contributions are taxed at 15%, so you'd need to be passively earning over $18200 to make this worthwhile. Even then earning up to $37200 will only 'save' you 6% in tax (21%-15%) and then the money is locked up in super until preservation age. Maybe I've misunderstood the intentions, but I can only see this being beneficial if you are earning well in excess of $37200.

I am looking at this as partner is close to preservation age and the tax treatment for retirees is just so generous. He has not got long to get it in there and his balance is relatively small. Currently passive income is just over $30000 so the thought was to contribute what was left over about the 18200 threshold. I'm not sure I understand about any australian able to contribute after June 30. Can they not do that now?
I learnt about this stuff last month, earlier in this thread. Other thing to consider if you are earning a bit yourself, you can contribute extra to your own super, then after the EOFY transfer any/all contributions you made that year to your partner's super account (minus the 15% tax). Useful if you are the higher earner, but they are closer to preservation age...

NotSure

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Re: Australian Investing Thread
« Reply #2930 on: March 26, 2017, 11:30:58 PM »
Joined Sunsuper to move my super from BT, but noticed that insurance is almost double the price and there is no way to opt out of TPD insurance?

For example I was paying ~$240 per year for $200k death insurance with BT, but with Sunsuper it's $440 for $153k (death and TPD combined). My wife is with Australian Super and it's also ~$240 per tear.

I wonder why SunSuper is so expensive?

Luckyvik

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Re: Australian Investing Thread
« Reply #2931 on: March 26, 2017, 11:42:26 PM »
Joined Sunsuper to move my super from BT, but noticed that insurance is almost double the price and there is no way to opt out of TPD insurance?

For example I was paying ~$240 per year for $200k death insurance with BT, but with Sunsuper it's $440 for $153k (death and TPD combined). My wife is with Australian Super and it's also ~$240 per tear.

I wonder why SunSuper is so expensive?

It could be that your cover with BT started as a corporate plan and you joined Sunsuper as a personal member ie not through an employer? Corporate plans often have cheaper insurance as they get a cheaper deal for insuring a group of members. Call Sunsuper and ask about whether you can cancel TPD and keep death only if that's the cover your after.


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marty998

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Re: Australian Investing Thread
« Reply #2932 on: March 27, 2017, 12:43:35 AM »
Cancelled my death and income protection cover with Aus Super.

Have net worth over $900k and no descendants... not like the relatives will need another several hundred thousand on top of that.

Income protection seems to just have too many exclusions to make it worthwhile bothering.

Kept a nominal amount of TPD but will probably cancel that too if the stache gets large enough.

potm

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Re: Australian Investing Thread
« Reply #2933 on: March 27, 2017, 12:54:56 AM »
My insurance with sunsuper is 8.xx per week. I upped the TPD to a mil though and income protect until 65, although it's based of my salary from a while ago.
Also have 100k of death which doesn't cost much.

Probably don't need so much insurance any more but I don't want to tempt fate by lowering them. Would just be my luck that something happens after I lower or cancel them. I'm more worried about my life aspect than the money!

FFA

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Re: Australian Investing Thread
« Reply #2934 on: March 27, 2017, 01:25:15 AM »
I have sunsuper with no insurance, so you should be able to opt out, well, I certainly have opted out of both.

cakie

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Re: Australian Investing Thread
« Reply #2935 on: March 27, 2017, 03:52:26 PM »
I'm in the process of getting tailored tpd and death with sunsuper, much cheaper for me than their regular insurance. Lot of hassle though if you have any past medical problems, there's at lot of back and forth with the underwriter...

settlement

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Re: Australian Investing Thread
« Reply #2936 on: March 27, 2017, 06:22:59 PM »
How are ETFs taxed in australia? Just as capital gains when selling? How are dividends treated - are they taxable also?

Yes, capital gains/losses apply when selling.  Dividends are taxed as income.

I see. What is the capital gains rate? Can losses on one stock index be offset against gains from another? In an accumulating UCITS ETF are dividends taxed? Is there a dividend withholding tax?

Ozstache

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Re: Australian Investing Thread
« Reply #2937 on: March 27, 2017, 10:09:18 PM »
I have sunsuper with no insurance, so you should be able to opt out, well, I certainly have opted out of both.

Ditto. Call Sunsuper up if you can't find a way to cancel them online.

Wadiman

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Re: Australian Investing Thread
« Reply #2938 on: March 28, 2017, 09:17:21 PM »
Retail Super Fund and SMSF?

Anyone running both?  Realise that running two super accounts is not great from a fees point of view but I am frustrated that some of the investment options I want to pursue and hold in a tax-advantaged framework are not possible through retail funds (i'm with ING direct).  Specifically I want to hold direct corporate bonds and possibly capital notes and unlisted property trust units. 

ESuper have a SMSF establishment special at present for $800 for two years (plus ATO fee). 

Thoughts?

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Re: Australian Investing Thread
« Reply #2939 on: March 28, 2017, 09:25:22 PM »
@Wadiman,

I'm not running both so can't help you on your question.

However, I see that your retail fund is ING Direct. What are your views on their recent announcement regarding their fees as of July 2017?

I personally see it as a dramatic increase, and I will be jumping ship to somewhere else at FY end (probably HostPlus - SMSF has an allure but I don't think my balance ~$80k is high enough to justify at the moment). It will be a pain and a cost having to liquidate what I have with ING already but it won't take long to recoup those fees back with the lower running costs elsewhere.

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Re: Australian Investing Thread
« Reply #2940 on: March 28, 2017, 09:33:07 PM »
There was a time when I had both - work wouldn't salary sacrifice into an SMSF, so I needed to have an account with a fund. In fact after telling me that I could do it to any fund, and going through the paperwork, they then said the fund I had selected wasn't on their list either, so I finally got out of them a fund I could use (AND I had to have signed advice from a financial adviser that they had given me advice to salary sacrifice into super - there were plenty of people salary sacrificing car leases which I'm SURE no one advised them to do). It was all very annoying!

Got out of the fund as soon as I retired. The fund had a lot of options that would have been difficult to have in the SMSF, so I used it to give me some diversity.

It could be a good way of getting the insurance (through the fund).

NotSure

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Re: Australian Investing Thread
« Reply #2941 on: March 29, 2017, 12:13:30 AM »
Thanks everyone, found on Sunsuper website that I can opt out from TPD, so cost wise insurance should be almost the same as with BT.

I've another question regarding asset allocation. One of the reasons for moving to Sunsuper was that I can use low cost index funds, currently they have:

- Australian Shares - Index 0.08% p.a.
- International Shares - Index (Hedged) 0.09% p.a.
- International Shares - Index (Unhedged) 0.09% p.a.
- Australian Property - Index 0.11% p.a.
- Fixed Interest - Index 0.12% p.a.

There is no more index options at the moment, Emerging Markets is not index option and is base 0.54% p.a. + 0.04% performance. Also no index fund for international property.

I'm 48 years old and was thinking something like:

Australian shares - 35%
International unhedged - 40%
Australian Property - 10%
Fixed interest - 10%
Cash - 5%

I guess this would be similar to growth or high growth in managed options. Also, I read somewhere that it's better to allocate more in your local share market e.g. where you live?

Any tips/advice is welcome. :) If you're doing something similar would be nice if you could share your allocation and reason behind it.
 

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Re: Australian Investing Thread
« Reply #2942 on: March 29, 2017, 12:21:04 AM »
Like Wadiman and FFF, I'm also currently with ING Direct for super, and I too am looking to move, partly due to the fee increase for next financial year.

I'm looking first at SunSuper and Australian Super based on the discussions on this thread, but find it tricky to make a clear comparison between them...

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Re: Australian Investing Thread
« Reply #2943 on: March 29, 2017, 12:53:01 AM »
How are ETFs taxed in australia? Just as capital gains when selling? How are dividends treated - are they taxable also?

Yes, capital gains/losses apply when selling.  Dividends are taxed as income.

I see. What is the capital gains rate? Can losses on one stock index be offset against gains from another? In an accumulating UCITS ETF are dividends taxed? Is there a dividend withholding tax?

Capital gains are taxed at your marginal tax rate. You take your gain and add it to all your other income.

The exception being capital gains on assets you hold longer than a year - in this case you only have to add half the gain to your other income.

Capital losses can generally be used to offset capital gains, except losses generated from collectibles/antiques and artwork, which can only be used to offset gains on the same/similar.

UCITS are are European regulatory creation.... you may need European tax advice for that, not Australian. Your ETF administrator will be able to assist you with forms to ill out to minimise withholding tax.

marty998

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Re: Australian Investing Thread
« Reply #2944 on: March 29, 2017, 01:05:57 AM »
Some of you who have read this thread will know I dabble in the odd speccie stock. AVB has been one I've followed for years which is finally coming good.

I've recently purchased a small stake in Amaysim (AYS). Pulled the trigger slightly early on the day of the half year results announcement at $1.83, watched it fall to $1.73 and last traded today at $1.91. These guys do discount mobile phone plans (they also own Vaya now).

Business is scalable and the potential market is opening up now to include NBN plans. What really makes me happy is today I was sent a job ad for 2 Accounting and Financial Reporting positions they are hiring for (always a good sign when a business is expanding its accounting function!) as well as several new executive and manager positions covering marketing, customer acquisition, digital strategy and distribution. All up 9 positions being advertised just in the last 3 weeks.

The Company's balance sheet is a pile of crap with current liabilities well in excess of current assets. However cash is being generated at a fast rate of knots so I'm not too concerned about this (the accountant in me is screaming NO NO NO!)
They are not in any danger of insolvency as the debts are payable to Optus at contractually defined times, which are well covered by expected cash generation from the subscriber base.

Potential for earning stop materially increase is large, coming off a small base currently.

Watching in earnest for any news and updates, should be a good one to hold for the next couple of years.
« Last Edit: March 29, 2017, 01:07:54 AM by marty998 »

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Re: Australian Investing Thread
« Reply #2945 on: March 29, 2017, 02:56:11 AM »
@Wadiman,

I'm not running both so can't help you on your question.

However, I see that your retail fund is ING Direct. What are your views on their recent announcement regarding their fees as of July 2017?

I personally see it as a dramatic increase, and I will be jumping ship to somewhere else at FY end (probably HostPlus - SMSF has an allure but I don't think my balance ~$80k is high enough to justify at the moment). It will be a pain and a cost having to liquidate what I have with ING already but it won't take long to recoup those fees back with the lower running costs elsewhere.

FFF - I haven't worked out the potential fee increases yet but will remain with them due to the CGT issue that would be triggered if I had to sell for a rollover - I've held some equities for a while and 10% CGT on 75% of the portfolio (proportion held in equities) would be nasty.

Wadiman

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Re: Australian Investing Thread
« Reply #2946 on: March 29, 2017, 02:58:49 AM »
There was a time when I had both - work wouldn't salary sacrifice into an SMSF, so I needed to have an account with a fund. In fact after telling me that I could do it to any fund, and going through the paperwork, they then said the fund I had selected wasn't on their list either, so I finally got out of them a fund I could use (AND I had to have signed advice from a financial adviser that they had given me advice to salary sacrifice into super - there were plenty of people salary sacrificing car leases which I'm SURE no one advised them to do). It was all very annoying!

Got out of the fund as soon as I retired. The fund had a lot of options that would have been difficult to have in the SMSF, so I used it to give me some diversity.

It could be a good way of getting the insurance (through the fund).

Deborah - yes - i plan to stay with the retail fund for the insurance benefits (and also to avoid CGT on sales).  Thank goodness that with super choices in place there's not any issues with changing funds now!

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Re: Australian Investing Thread
« Reply #2947 on: March 29, 2017, 04:17:35 AM »
How are ETFs taxed in australia? Just as capital gains when selling? How are dividends treated - are they taxable also?

Yes, capital gains/losses apply when selling.  Dividends are taxed as income.

I see. What is the capital gains rate? Can losses on one stock index be offset against gains from another? In an accumulating UCITS ETF are dividends taxed? Is there a dividend withholding tax?

Capital gains are taxed at your marginal tax rate. You take your gain and add it to all your other income.

The exception being capital gains on assets you hold longer than a year - in this case you only have to add half the gain to your other income.

Capital losses can generally be used to offset capital gains, except losses generated from collectibles/antiques and artwork, which can only be used to offset gains on the same/similar.

Note, also - something I learnt the hard way.  You must apply capital gains against losses before the 50% discount. Doh!

marty998

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Re: Australian Investing Thread
« Reply #2948 on: March 29, 2017, 04:33:50 AM »

Note, also - something I learnt the hard way.  You must apply capital gains against losses before the 50% discount. Doh!


Yes that too... catches out a lot of people who are not tax accountants or who don't get advice first before doing things they shouldn't :)

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Re: Australian Investing Thread
« Reply #2949 on: March 30, 2017, 03:03:09 AM »


What's everyone currently investing in?

Hey everyone. I have about $30K more in cash than I would like at the moment but everything seems at the top of the 52 week range so I want to invest but keep hesitating as everything seems so expensive.

I have money invested in AFI, ARG, WAX, VGAD. I don't want to add more to AFI & ARG. Curious to know what others have bought lately in the way of ETF/ LICs? Thanks in advance :)




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