Sent: 02-03-2010 11:22:03
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Mercer Research and Greece
Last week Mercer released some research which shows the relative value of super tax concessions compared to the government aged pension.
It's an interesting bit of research that is well worth reading.
It is a really interesting study and I would strongly suggest you have a look at it. It shows what a great benefit the aged pension really is.
Any talk of excessive tax concessions for superannuation needs to be considered along side the money handed out for the aged pension, health and aged care.
The Mercer research doesn't show, because it wasn't designed to show, that the age pension can be a very good risk minimisation strategy for those middle wealth investors who are not eligible for the full aged pension for some or all of their retirement.
Next some interesting facts about Greece
Just in case you are wondering why Greece is in a deep financial hole:
* Fertility rate - 1.3; no society has ever recovered from such a low rate
* Public sector employees retire at 58; the private sector retirement age is about 63
* In 2005 it was estimated that public sector pension liabilities would be 25% of GDP in 2040 but it is now estimated to be higher
* Public sector employees receive 14 monthly payments each year (and they also get 14 monthly payments each year in retirement)
Incidentally, don't expect Greece to be bailed out by Germany at least not for long. Thirty percent of German women are childless. Germany, like Greece just doesn't have a young enough workforce to pay off all the potential new debt. Spain, Portugal and Italy all have similar problems for the same reason.
Australia also has a similar issue which has been graphically shown by successive Intergenerational Reports. Fortunately our hole is not as deep as our Western European confreres.
The Howard and Rudd Governments have tackled this by importing our labour needs via immigration. But this only solves some of the problem. Australia will have financial problems caused by population ageing. It's too late to escape the iceberg coming our way.
It will be very tricky for Government's to keep taxation at a reasonable level whilst providing adequate services.
Hopefully our society doesn't fall for the trap of compulsory government entitlements simply because its "always been done that way and its my turn".
Finally please consider purchasing a copy of my book. You can look at the contents page at the following link: http://www.atcbiz.com.au/smsfbooktoc.pdf
Two options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST).
The book can be purchased at the following link: http://www.atcbiz.com.au/smsfstore.php
I have just released a new version of the book. The new document seeks to correct some spelling and other similar errors which I had found in the first edition.
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