Ignore Super, at this stage the major risk is government meddling (expect that you wont be able to access it until your 75 and it'll be taxed to buggery to pay for social security) and its locked away for far too long. Put your funds into Aussie Super's growth option and forget about it. Let it grow with just employer contributions.
Sounds like you have bought the over the top scare campaigns. I highly doubt they'll raise the age to 75 and no, it won't be taxed to buggery either. The Government is tying itself in knots over a proposal to have $1.6m tax free and only tax earnings above that... which is a level very few will get to anyway.
In his tax bracket he'll save 24% tax by salary sacrificing. It also means we won't get smashed on tax now by having investments outside of super. It's a huge benefit worth considering.
No I haven't bought any scare mongering, but I find that for a nation with a growing elderly population and very low birth-rates/extreme immigration control, that unless something drastic changes our social security will become increasing difficult to fund and Super, being one of the bigger asset pools available for the government to tap will be a target. Think about it, we have some of the highest income tax rates, business tax rates, so what's next? What's left.
Raising the age to 75 was more of a comment about how older people are finding they have to work longer and longer to be able to live above the poverty line. You only have to open the paper to see countless issues about pensioners being forced to make more of less.
Its also why I find MMM less about a lifestyle and more about necessity. For 90% of people, if they could live frugally earlier in their lives than the above wouldn't be such an issue. Social security would be far more tenable.
Fair point on the tax concession due to salary sac though. In fairness I forgot about that. My only argument would be that as super is locked away for such a long time and the OP wishes to buy a house in the near future, perhaps contributing super isn't the best allocation at this time.
Old people die eventually. We won't have to fund their full age pensions forever. The oldies entering retirement in 15 years time will have a level of super that will supplement a part age pension.
Interesting you think we have extreme immigration control when over 140,000 immigrants arrived in Australia last year (admittedly down from 300,000 a few years back). Birth rate is still over 2.1 as well so not sure what you are getting at.
You're in Tasmania, which has a population the size of a small portion of Sydney. Come here and I can tell you the city is bursting at the seams. The last thing we need is more people, without the infrastructure to cope.
Tax rate is high because we hand out too many concessions to old people. Taxes on super should be raised as a matter of intergenerational equity more than anything else.
I apologise to OP as this thread has turned into a discussion about social and economic issues and has strayed from answering the original question lol.
Marty998, hopefully you aren't taking anything personally. Living in Tasmania doesn't mean I don't understand population density. I've added some links to my points below as I think they make for good reading if you're interested, some of them are old and I'm not going to look for the absolute latest figures as I'm just trying to show the trends.
You are correct in that old people will die eventually. However you must surely concede that people are living longer. We have an aging population, living longer, with most of those expecting/needed social security. If the average person retires at 65 and lives to 80/90 that's 15-25 years of social security and some assistance from superannuation. You must remember that super is a relatively new addition to our society, 1976 I think, with the average Australian super balance of $350,000ish for males at retirement age today and half that for females as of 2013. (
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4125.0main+features1230Jan%202013). So the majority of people retiring in the near future wont have really had the benefits of making an informed choice about how they manage their superannuation. I would bet money on today's younger population having much larger super balances when they retire than those currently about to, and not just because of government mandated superannuation guarantee % increases.
If we assume each retiree has a paid off home (which many don't) and gets 4% drawing on their super $14,000 (for men) and $7,000 (for women) and we assume the "traditional" view that they are a couple. That's $21,000 per annum in income. Now add the part pension (I calculate it at about $1,000 per fortnight for a couple after taking their earning income into consideration) for a grand total of $47,000 per annum.
That's the average.
So $13,000 part pension (that's not even the full pension!) per pensioner per annum for 15-25 years. A growing aging population, 2.2m over 65 in 2015 (
http://www.abs.gov.au/ausstats%5Cabs@.nsf/mediareleasesbyCatalogue/72D4A8F0C7957E85CA257A6A0012F5A0) that's up 400,000 from 2010.
"In 2013-14, an estimated $39.5 billion will be spent on the Age Pension, benefitting 2.4 million recipients. Expenditure on the Age Pension is currently growing at 7 per cent per year"
"Age Pension expenditure is expected to continue to increase largely as a result of an ageing population, increased life expectancies and benchmarking to the Male Total Average Weekly Earnings benchmark"
(
http://www.ncoa.gov.au/report/phase-one/part-b/7-1-age-pension.html)
Based on that report the number of part pensions is expected to rise, and full pensions to fall.
Now I agree that we should reduce some concessions or find better alternatives, what those are I don't know. But is sure seems to me that taking them off those who need them least, i.e. politicians and the super wealthy makes more sense. Hopefully more people start considering superannuation as rather important and paying attention to how they can use it but that wasn't really what the OP was looking for, or what my original point was.
As for the immigration issue;
We need more "working" "tax paying" people to offset the expected decline, irrespective of infrastructure, there are much bigger cities in the world that are capable of handling the needs of their inhabitants. I understand the generational frustration that oldies wont downsize, but at the same time I understand their view as well. Who wants to leave a home they potentially bought whilst young, raised their kids in and earned?
http://www.taxreview.treasury.gov.au/content/ConsultationPaper.aspx?doc=html/publications/Papers/Retirement_Income_Consultation_Paper/Chapter_6.htmWhilst this paper is from 2008, it highlights the expected decreasing in working population over time from 5 working people per pensioner today to 2.1 per pensioner by 2047.
Tax rates are not high because we hand out too many concessions to old people. There are more factors in play, including really inefficient bureaucracy and dumb government spending. Honestly I don't begrudge the elderly from trying to get the best out a system that in all fairness they paid taxes into and left a government to run, but I think its a little unfair to blame the previous generation for todays problems. It just goes around in circles. We should be the generation that just tries to do better and doesn't pass the buck, regardless of who could be to blame.
Anyway, that's my thoughts on the matter. I'll leave it there. Happy to chat away on another thread or if you PM me