Government Retirement Income Review

Discussion in 'Superannuation, SMSF & Personal Insurance' started by ChrisP73, 28th Sep, 2019.

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  1. Angel

    Angel Well-Known Member

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    @MWI In your case, you are able to do better than Mr and Ms Average. From my understanding, the salary sacrificing and personal contributions terms are beneficial to typical workers who wouldn't know the difference between taxable and non-taxable contributions anyway. Many Australians will never get to the levels at which $1.6m and contribution caps kick in so wouldn't really matter to them if Super rules change.
     
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  2. Marg4000

    Marg4000 Well-Known Member

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    That’s a bit condescending.

    I can assure you that, contrary to what you say, many people who use salary sacrifice and voluntary contributions are very aware of the “rules” and limits of the different types of contributions so that they maximise the benefits to themselves.

    And, if the rules or limits change, they review their actions. Changes are nowhere near as often as some comments on this thread imply.

    The allowance of personal, tax-deductible contributions for everyone is a recent change, and a good one. It achieves the same benefit as I gained from salary sacrifice, which at the time was not available to everyone.
     
  3. Angel

    Angel Well-Known Member

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    Of course many people who use these facilities are very aware.

    I am discussing the benefits of these things for the users who are not as savvy as others. If they take advantage of the services available to them, they can do very well without needing to take on additional risks associated with additional investing. I agree that utilising Super is an excellent way to achieve a good retirement, contrary to the scare mongering out there :) I hope i am making sense
     
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  4. Marg4000

    Marg4000 Well-Known Member

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    The often-overlooked benefit of non-deductible contributions is the co-contribution payment from the govt depending on your income and contribution amount.

    I always made sure I was eligible for the maximum co-contribution - first it was $1500, then $1000, then $500 at the time I retired. Not sure if it is still available.

    Most of the big super funds run information seminars, usually schedules are online. Find one nearby and go along, even if you are not a member of that fund. They offer a wealth of information and there are usually Q&A sessions or advisors to speak to. Great for general info.
     
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  5. Scott No Mates

    Scott No Mates Well-Known Member

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    I'm off to one in November with Cbus, booked it ages ago.
     
  6. Marg4000

    Marg4000 Well-Known Member

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    With a bit of luck, they will serve decent refreshments!
    Winning!
     
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  7. MWI

    MWI Well-Known Member

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    We are not retired as yet, only did CC, have very large asset base and income base too but I would be hesitant to advise our adult kids to contribute into this environment in their early years.
    I would advise them to build their financial wealth outside first then use it to contribute there if spare savings left over, or if closer in age to their retirement and rules have not changed much. The issue for me there is that we are comfortable so are you as you age permits you to withdraw or liquidate, however the young adults today would not have the certainty what will happen to their Super when they will retire.
    Even though my aim was to build to $10M in Super, I have altered my plans after limits and taxes have been introduced. In addition some planning had to be altered with LRBAs and excess limits.
    You see both of us members have above $1.6M limits hence why complexity arises.
    I suspect what you mention is that all you income is tax free as you have not reached the $1.6M limits.
    So it really depends on personal circumstances and age whether one is able to take advantage of Super environment, as yes, at present it is still most concessional tax environment, not as favourable as it was though.
    Australian wealth is around 50% in realestate and around 20% in Super, so when the government will need the money I am sure they will look at those asset classes to go after....hence I am sure there will be more changes to come.
     
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  8. MWI

    MWI Well-Known Member

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    But you see what frustrates me is that I disagree with that. Yes, if you follow what most are doing and give your control to someone else to invest then I agree with you. BUT, as I mentioned in our situation we invested and hence created such incomes and asset base from investments within Super via DIRECT investing. Hence, IMHO, anything is possible, meaning you can even surpass the $1.6M.
    I do agree though that if someone else will manage your Super and with such low CC limits of $25K and with current economical situation it's hard to see how anyone would reach such balance. But it's possible.
     
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  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Its a option that many dig their heads into the sand about. They generally quote uncertainty, lack of control etc ...All of which can be addressed. I dont suggest it should be Plan A. But a element of every workers retirement planning.

    One of the key benefits is the 85% compound growth rule. The other is the compulsory 9.5% element. Low tax rates etc. I dont consider anyone at age 20 should be exploring maxing limits. But many people get to age 50s and should explore how to push their super balances and not waste excess income after their kids are educated, home repaid etc.

    I have never found a person who pushed their super strategies rely on a aged pension alone. If anything they moan about the fact they cant access a pension as they have too much wealth. A better problem
     
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  10. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I would disagree. It should even be a planning target. I see more and more people maxing these limits where 20 years ago it was rare. With salaries of $250K becoming more common and 9.5% super and compound growth plus opportunities for loads of strategies incl sal sacrifice, non-concessional "banking" of profits from property and businesses etc its likely be become the norm. Future govts may one day need to consider indexing this cap too.

    And $1.6m is just the cap for highly concessionally taxed super. There is no law that says you cant have unlimited wealth. Tax law will just take some of it.

    I would treasure a $1.6m pension (each of us) plus a few million in property. Far better than a fortnightly payment from centrelink

    One of the most common problems I see is people asking at age 60 how they can move their property into super. I tell them they cant. And calculate the CGT and they sigh.
     
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  11. ChrisP73

    ChrisP73 Well-Known Member

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    Albanese enlists Keating in attack on super 'vandals'

    Mr Keating said the government's new retirement income review was a "Trojan horse" for the Liberal Party to "kill" the rise in compulsory super from 9.5 per cent to 12 per cent, as is legislated to incrementally occur between 2021 and 2025.