The principals and staff would like to wish all our clients a very Merry Christmas and a Happy New Year. Our offices will close at 12.00 noon on Friday 23rd December and re-open on Tuesday 3rd January 2017. Please note that some principals and staff are taking extra time off in January.
We will also have an exciting announcement early next year for everyone as well.
Following from last month’s newsletter article we can confirm that both Houses of the Parliament have passed the budget changes and now we are just waiting on Royal Assent (which is just a mere formality) before the legislation will be enacted from 1 July 2017. The major changes relate to contribution limits, removal of income tax exemption in pension phase for balances over $1.6m, removal of anti-detriment provisions and removal of tax exemptions on Transition to Retirement Pensions. The government has also legislated some CGT transition relief provisions for those coming out of pension phase due to these changes, which may be of a significant benefit to super fund members. Please also remember that we are also currently under the old legislation which is still in force until 30 June 2017. Due to some of the proposed changes you wish to avail yourself of the current legislation especially in relation to contributions etc.
We are in the process of identifying self managed super fund clients that require advice in relation to these changes and are awaiting final regulations in relation to the finer details from the ATO. We will be in contact with those affected clients in the new year.
If you don’t have a SMSF but believe you may be impacted by these changes, or you do have a SMSF and wish assistance immediately, please do not hesitate to contact Matthew Grapsas, Cathy Walley or myself on 5221 6111.
Given the financial demands of everyday life, planning your retirement may be a relatively low priority. You may also think that you have plenty of time to plan. But before you put off planning for your retirement any longer, here are some key facts you should consider.
Your retirement could last 30 years or more
A male currently aged 65 has a future life expectancy of 19 years and for females currently aged 65 it’s 22 years . But these are just the averages and they are increasing steadily. As these trends continue, your retirement could stretch to three decades, or maybe even longer.
You shouldn’t rely on the age pension
The full single rate age pension only provides around 25% of average weekly male earnings. What’s more, qualifying for the age pension may become more difficult in the future, given our population is ageing.
You shouldn’t rely on an inheritance
Your parents may end up spending all their savings and may even need to downsize their home to help make ends meet. So, if you’re relying on an inheritance to fund your retirement, you could be disappointed.
You might not have enough super either
With some of your money going into super through compulsory employer contributions, you’re off to a good start. But assume that those employer compulsory contributions will mean you have enough super to get you through your retirement and you could be in for a nasty surprise. Research conducted by Rice Warner Actuaries revealed that Australia has a shortfall in super of close to $1 trillion2, which means many Australians may not have enough super to fund their retirement.