this post was submitted on 25 Mar 2024
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Research by the Association of Superannuation Funds of Australia casts doubt on the Coalition’s plan

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[–] theroff@aussie.zone 6 points 7 months ago* (last edited 7 months ago) (2 children)

Why would it? Super is its own scam

Scam: a fraudulent or deceptive act or operation

Can you elaborate on super being its own scam?

[–] zik@aussie.zone 6 points 7 months ago* (last edited 7 months ago) (2 children)

I worked in the superannuation industry for a while. I wouldn't say that super is exactly a scam but it's a terrible mess and the fees we pay on super in Australia are insane. Basically we have a lot of parasites taking a cut and that ends up making the standard funds poor investments. Median returns on the super funds are around 5.6% pa (over the last ten years for the standard "balanced" option) at a time when stock market tracking funds have appreciated by over 8% pa. A lot of that is being lost in inefficiencies and fees.

By comparison Americans with a 401k invested in the NASDAQ would have made 17.3% pa over the same period.

We're getting a terrible deal with superannuation, and for many it's the difference between retiring comfortably or retiring in poverty.

[–] DavidDoesLemmy@aussie.zone 3 points 7 months ago (1 children)

Are you comparing a balanced option against a 100% stocks option? That's hardly a fair comparison.

[–] zik@aussie.zone 1 points 7 months ago

It's a fair point but my intention was to bracket the possible returns.

[–] theroff@aussie.zone 3 points 7 months ago

Cherry picking an article seems to suggest the US has similar problems https://www.investmentzen.com/blog/average-401k-return

Australia's superannuation has improved over time. For example, the MySuper reforns led to consolidation and an exodus of underperforming funds.

A quick search on some of the biggest super funds in Aus shows returns of > 9% in a more equivalent, potentially volatile "high growth" fund.

There are funds that offer lower cost index-tracking products if that's your thing.

The biggest problem, IMO, is financial literacy which needs to play a bigger role in education.

[–] DolphinLundgrin@aussie.zone -1 points 7 months ago (1 children)

Government mandated coke-fuelled gambling parties for investment bro's

[–] theroff@aussie.zone 1 points 7 months ago

Where do you suggest people invest their long term money to avoid the scourge of coke bros? If one is to believe the stereotypes, real estate and non-Super investments seem just as likely to face the same problems.