Comment on Richest super balances to be taxed at higher rates after Greens agree to back Labor plan

• Nath@aussie.zone ⁨1⁩ ⁨week⁩ ago

  With $3m in super, you could draw $100k/year and assuming 5% growth you’d have over $3.5m after 10 years:

  Year,Starting Balance,Withdrawal,Interest Earned (5%),Year-End Balance  
  1,"$3,000,000","−$100,000","+$145,000","$3,045,000"  
  2,"$3,045,000","−$100,000","+$147,250","$3,092,250"  
  3,"$3,092,250","−$100,000","+$149,613","$3,141,863"  
  4,"$3,141,863","−$100,000","+$152,093","$3,193,956"  
  5,"$3,193,956","−$100,000","+$154,698","$3,248,653"  
  6,"$3,248,653","−$100,000","+$157,433","$3,306,086"  
  7,"$3,306,086","−$100,000","+$160,304","$3,366,390"  
  8,"$3,366,390","−$100,000","+$163,320","$3,429,710"  
  9,"$3,429,710","−$100,000","+$166,485","$3,496,195"  
  10,"$3,496,195","−$100,000","+$169,810","$3,566,005"  
  

  “But $100k won’t be enough in ten years!” I hear you say. Ok, let’s give ourselves a 10% pay-rise every 10 years.

  Year Range,Annual Withdrawal,Year-End Balance (End of Decade)  
  Years 1–10,"$100,000.00","$3,566,005"  
  Years 11–20,"$110,000.00","$4,355,900"  
  Years 21–30,"$121,000.00","$5,497,281"  
  Years 31–40,"$133,100.00","$7,196,668"  
  

  With a starting fund of $3m, and a 10% payrise every decade, after 40 years we have over $7m in our super fund. As I said, I really wish I had this problem!

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  • No1@aussie.zone ⁨1⁩ ⁨week⁩ ago

    Sure $3M would be a nice ‘problem’.

    But I’m more concerned about poor suckers like me and maybe you.

    Your key assumption is that the asset value never goes down. And you are ignoring the impact of inflation.

    We are looking at long terms here, and when and where things happen matters.

    So, in the case of a ‘comfortable’ $800K. Well, if the market tanks, that could easily be 400K. Not so comfortable now? And the $50K a year you were taking out, maybe you have to halve that to make it last. Oh, and whatever you were drawing out? $50K in 10 years time, assuming 4% inflation, is only worth 2/3 of whatever you take out today. And if you start budgetting for increased health care and aged care as you grow older, well…

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    • Nath@aussie.zone ⁨1⁩ ⁨week⁩ ago

      This article is discussing a tax on earnings in super funds above $3m.

      I think that people who are earning more than my annual salary just from growth in the value on their pile of cash should be charged tax on that growth.

      They can afford it better than any of us, and I’m always amazed at people who think this is a bad thing.

      None of the present changes apply to your examples.

      Perhaps that’s the answer to my question: people criticise this tax because they worry it’ll affect them?

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• thatKamGuy@sh.itjust.works ⁨1⁩ ⁨week⁩ ago

  If you have $3m in Superannuation, with a standard 6% ROI annually, you could spend $180K of “earned interest” every year without ever touching your principal.

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