May 2016 Super, The 2016 Budget, Retirement, The Election – You Decide!!!!
Super & The Budget
There are lots of unhappy people out there. They have been planning, maybe for several years and suddenly, someone moved the goal posts. Everytime super rules are changed, the action is“retrospective” because plans sometimes take years to develop and produce. And on budget night, a $500k “non-concessional contributions” cap came in AND it is backdated to 1st July 2007. This cap is particularly useful if you sold a property and want to throw extra money into super (sorry, may not work for all funds if their rules don’t allow it).
Until the Budget we were advising that you could put up to $540k of non-concessional contribution into your super – not any more!!!. The max, for life, is now $500k. You may already be over it NOW!!!!
We draw your attention to this and to other proposed changes (usually starting 1st July 2017) because you need to talk to your super fund administration/advisor and NOW is a good time to do it. If it becomes law, what do you do? What can you do?
One of the proposed budget changes is to limit the amount you can transfer (within your super fund) into a pension phase – no more than $1.6m. We have clients who are already there.
Do you think that will impact on retirement plans?
What about reducing your maximum tax deductible contribution from $35,000 to $25,000. What about taxing your fund income, when you take a transition to retirement pension – currently no tax.
We can be fairly certain that most people over 55,
a) haven’t done much about their retirement and
b) won’t have an idea about how these changes will impact on their retirement.
There are also two measures in the budget, which will help you GROW your super if you wish to. Can you use them? From 1st July 2017, the Government will allow “anyone” to claim amounts paid into super as a tax deduction. This is a major development, if you have spare cash.
Retirement comes to all of us – we’ve just seen an expert article which suggests that “80” will become the new “65”. And yes, it could happen. Planning for retirement is suddenly more complicated. Learn about it and/or get help or do nothing, at your peril.
The Election – You Decide
On July 2nd, you get to decide who will represent you for the next 3 years. The coalition’s budget proposals are out there but we know little of Labor’s policies. As a future retiree, you would be wise to understand what the parties propose, for what may become your biggest asset.
You should also consider WHERE to invest your super. Thanks to concerted lobbying by certain groups, we cannot advise, after 1st
July 2016, on many aspects of super or on setting up your “OWN SUPER FUND”.
There are over 400 major public and industry super funds all trying to take control of the $2 Trillion in super and the $9 Billion (plus) being added each year. Whilst there is a regulated 9.5% going in, there is no regulation on fees. The largest growth area of in super is in the Self-Managed Super Fund area– the DIY Fund. In your own fund, you know your fees and you use experts to guide “Your Retirement”. Instead of being just a number in a massive machine, where nearly everyone is treated the same, you have some input and control.
And finally, don’t you think it is about time that all government operated on the same principles as your business and/or your household. Spend more than you earn and eventually you will slide into bankruptcy/liquidation/oblivion.
Governments, lately, seem to spend as they wish, using debt, debt which even you, as retirees or further retirees, will have to repay. Think about that.
NOTE: The information above is, of necessity, general in nature. It should not be relied upon. For more targeted advice, please contact our office or your super/finance consultant or ASK us to direct you to one of our network of experts.
We do not accept commissions from third parties or other parties in relation to referrals.