Re: The totally off-topic thread
Sure you could retire at 60 but you may not be able to access the employer sponsored portion of the superannuation until you are 70. Figuring out how to live from 60 to 70 without Government assistance would test quite a few folks.
There seems to be a lot of misconceptions about public service DB super & Fees SO This article endeavours to simplify it.
https://www.dixon.com.au/insights/2015-10/what-to-do-with-public-service-super
In addition to that article.....
Key points
Long term net return is 6% per annum
Gross earnings of course are pre-tax and fees can be upto 6 different types (investment advice fee, investment performance bonus, account keeping fee, annual fee which is 0.8% of balance, insurances of multiple forms).
Access to pension stream is available from 55 (or even younger if made redundant at any age from 30-54. Access to lump sum is based on preservation age (now 56-60)
Superannuation reverts to "spouse" on death for their rest of life or children until age 25.
Many changes have happened like
These were traditionally cash-based until the Trust deeds changed in the late 80s to allow shares to be included in the portfolio.
Losses are now at the employees risk (since 2002)
Cash rate introduced but is terribly low
Employees now have optional contributions but originally a mandatory minimum of 5%
Strong push to have employees in this scheme to take the cash rate or stop making contributions or to take a part lump sum to reduce government exposure
Wages rose at extraordinary rates pushing up contribution value
Recent change from 1 Jan 2016 deems 50% as income instead of 10%. Over 300,000 lost their age pension (At least one third is your own contribution (roughly exhausted after 11 years), another 3rd is the employer contribution - think of these as capital in a bank account which is now deemed income ! )
Unlike the rest of the post 60 age group who pay zero tax in pension phase, tax is paid on 1/3 of the superannuation, the reduction is sufficient to fund a first class airfare every year
DB EMPLOYER risk are the traditional public service super schemes closed by the late 90s where most fees are paid by the employer.
Must take part or all pension - there is no way to "take it only as a lump sum" and only a fool with do so.
Late career promotions can result in a better pension option post 55, in the main 54/11 is a major high-spot.
The average annual CSS Pension is around 35,000 pa but recent maximum results are well north of $80,000 gross pa
but super Pension stream based only on basic contributions and interest (and not productivity components) great for maximum annual stream at 54/11 or redundancy after 55.
DB EMPLOYEE RISK 1990-2005 now closed
The sweet spot is 58 but with most of these employees contributing 10% after the long service period is achieved.
Allows full lump sum
80% of senior Australians access full or part age pension. It's the social safety net and it gets worse
https://www.dixon.com.au/news/news-article/14-08-16/age-pension-may-beat-1m-in-super
Now today, the forward trajectory is alarming. it's an income-tax free life for all those over 60 who no longer work (except former public servants)
This study gives the best insight as to how this situation is affecting government expenditure especially for those who already are on superannuation.
Superannuation Policy for Post-Retirement - Productivity Commission