It looks like changes will be made to tax concessions for super. Given the state of the budget, I think it’s almost a certainty.
We are looking at tax incentives, I don’t think that’s any secret. We need to put those things under the microscope and make sure they are fit for purpose,” Morrison said. “Everything in the Budget must stack-up and carry its own weight over time. When it doesn’t, you need to recalibrate. We’re looking at the tax concessions of superannuation as part of this process.
“Super concessions, or more targeted concessions is something I want to focus on,” he continued. “The biggest proportion of concessions goes to the highest earners. Very little that we put into super concessions go to the bottom 20%, by contrast, more than half go to the top 10% of earners. – Treasurer Scott Morrison at SMSF Association National Conference in Adelaide.
Superannuation is a tax vehicle to hold investments for retirement. It’s very tax effective which is the reward for putting away money for retirement (a great thing to do and what our country needs). I understand that we need to tighten the belt, but at the same time we must be careful not to scare people from using super for their retirement.
My suspicious is that when changes are announced, the common man/woman on the street will park super in the “too hard” basket and take a shallow view that the tax benefits are not as good so stay away. That is the wrong approach to take with your retirement savings.
Superannuation is simply a tax vehicle to hold investments for retirement. The question you need to ask yourself is whether or not based on your financial situation (i.e. your taxable income), it’s the best structure to use to save for retirement. To answer that question, it also ties into your current and future investment strategy. If you have no idea, that’s when you should get help, from someone like me.
For more information on the ways we can help you with your superannuation, head to our Super and Retirement Planning page.
Contact us on 08 9381 6811 for a complimentary consultation. Ray is a CERTIFIED FINANCIAL PLANNER® and LIFE RISK SPECIALIST® and has a Bachelor’s of Commerce in Financial Planning (with distinction). He is a member of The Financial Planning Association of Australia. We are based in Perth, Western Australia and specialise in retirement planning, wealth accumulation and wealth protection (life and disability insurance).