Hi Rob_S thanks for those links. I had read superannuationfreak's blog before, but I re-read it as it was worth refreshing my memory. It was such a shame that he stopped because of his perceived bias. I have seen him post on the Aussie Investment thread, so he must still be around.
The link to superguide is also a valuable blog for Aussies. I tried reading them to my husband but he tuned out by the second paragraph. What the original poster was proposing seemed a simple straightforward strategy, especially conserving your capital for as long as possible by living off dividends and franking credits, but it seems that would go against prevailing thought about diversification. Also I don't know if a SMSF would be good for us in the future as, if I cark it first husband would have no idea.
MustacheAndaHalf, so true in regard to fees and charges. Interestingly I went to a Juggernaut Superfund's meeting this morning for their pension fund recipients. Gees. They went over the usual blurb about why the rules are changing: life expectancies rising over the last 100 years, the ratio of workers to Centrelink pension recipients. How they outperformed their benchmarks, how big they are with $100 billion under management blah blah blah. Their charts showing their performance looked good since they only reflected the last five years!
Interestingly I got to talk to their financial advisor at the end of the meeting. He had been in the business for 20 years. I told him how we had been advised by Centrelink's financial information service to take the super pension approximately two years ago, otherwise the super balance would be counted as an asset, and he looked at me blankly :(
I had to double check with my husband that I really had heard that advice correctly! Sheesh, so we didn't really have to take a pension after all.
Then they showed us a bar chart demonstrating how low their fees were:
For a balance of $50,000 - Juggernaut Industry fund $498, others $724
For a balance of $100,000 - Juggernaut Industry fund $918, others $1320
So a balance of $200,000 would be attracting fees of approximately $1800 according to today's figures. The financial advisor insisted it would only be $1300? So I think I'll phone them for further information.
Cakie, it seems getting accurate advice is a bit of a mine field, and it's all care and no responsibility from both Centrelink and financial advisors. If Centrelink make a mistake in my favour I have to pay it all back, fair enough. If they make a mistake in their favour, they only have to backpay me 3 months worth or from when I challenged it. I trusted them to tell me the truth and give accurate advice. So I asked them, does that mean I must challenge every bit of your advice to cover myself in case of a mistake made by your staff? Apparently so.
I did learn today that earnings are not taxed (yet) in a super pension so the return is better, whereas in the accumulation phase earnings attract 15% tax.