Executive chairman of Dixon Advisory
Treasury draft consultation papers on super legislation changes rarely provide pleasant reading for those affected by the changes. However, the clarity and sensible provisions of the proposal to allow downsizing home owners to deposit up to $300,000 each in their superannuation account can only be welcomed by older Australians.
While defined benefit pensioners now know precisely how the Australian Tax Office will value their pension in applying the new $1.6 million superannuation cap tax changes, the valuations for current contributions and deferred benefit members' entitlements are still works in progress.
For those wanting to lower tax bills and build up retirement assets, making tax deductible super contributions is now much easier.
The major super changes legislated in 2016 are now in force, requiring many current and future retirees to review their strategies.
APRA wants to reduce the growth of interest-only loans, which are highly popular with investors and even owner-occupiers in special situations.
Many lower income public servants and defence employees are disadvantaged by their employer's superannuation arrangements.
The reduction in the annual concessional cap to $25,000 will create significant problems for many taxpayers and the Tax Office.
For a combination of reasons, index-following managed and exchange traded funds have become increasingly popular with both individual and institutional investors.
So far, financial year superannuation fund returns have been good with the prospect of double digit returns if world share markets don't tank in June.
While far from ideal, the budget initiative to allow older Australians to deposit up to $300,000 each in superannuation when they downsize their home is welcome.
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