Is super becoming super?
18 May 2017
Attributed to Gordon McNaught, Suncorp Technical Services Manager – Superannuation
The 2016/17 Federal Budget introduced a wide range of changes to superannuation with many of these measures coming into play from 1 July 2017. However, as we know for many Australians, superannuation can be complex and any change confusing.
When superannuation was first introduced, it was often considered a domain of the wealthy as it acted as a tax efficient place to hold investments. This view was recognised by the Federal Government and as such there were restrictions established around the amount you could have in superannuation (up to $1.6 million), and how much you contribute before and after tax.
The thing is, superannuation is designed for everyone and is an extremely important contributor to life after work and supporting an enjoyable retirement. While it may seem complex, like any financial decision, there are many services available, including financial planners, to help you understand it better.
As of 1 July 2017, any person under age 75 (subject to a work test for those 65 to 74) may be able to claim a tax deduction for making extra contributions to their superannuation. While retirement may seem a long way off for some, this is a positive incentive for those considering making extra contributions.
In this year’s Federal Budget, while there weren’t many new changes to superannuation, it was announced that from 1 July 2017, first home buyers may be able to make extra contributions to their superannuation to help them save a deposit for a house or apartment. If the policy is legislated, from 1 July 2018, first-time buyers would be able to withdraw up to $30,000 of voluntary superannuation contributions, plus the earning generated from those savings.
As with any financial decision, choosing to put extra money into your superannuation is governed by two factors – discomfort or regret. Discomfort is putting extra contributions into superannuation now and not having that money for something else. However, if we don’t want to go without now and choose to spend that money, we may very well have to live with regret in retirement.
Media Contact: Alexandra Foley 0419 794 294