The proposed changes to superannuation have been a key topic lately and for good reason. These changes could have a significant impact on the retirement landscape, and it’s important to understand what they mean for you.
Changes to superannuation could potentially have a big impact on how people plan for retirement. The key to successful investing is finding the right balance between risk and reward, and there are many different types of risks to consider, including market risk, manager risk, and specific company risk.
A suggested $3 million cap on individual superannuation balances has been a topic of much debate, with concerns raised about the lack of indexation and the taxation of unrealized gains. While this debate is likely to continue, it highlights the importance of having an objective for superannuation enshrined in legislation.
This objective would provide a framework for future changes to be assessed against and could help to prevent unintended consequences and maintain confidence in the superannuation system.
For most people, the concessional tax rates on superannuation mean that continuing to contribute as much as one can will still make sense after July 2025. However, for those who are at the higher end of the bracket, it’s important to factor in annual conversations with your financial advisor to decide what portions should be within super and what investments would be better held outside of the superannuation system.
In short, while the proposed changes to superannuation are controversial, it’s important to stay informed and understand what they mean for you. Balancing risk and reward is key to successful investing, and legislative risk is just one of the many risks to consider. A legislated objective for superannuation would provide a framework for assessing future changes and would help to ensure that the system remains stable and reliable for all Australians.
Contact Your Local Financial Advisor
Connect with Vince, your trusted local Financial Retirement Advisor, who possesses the knowledge and experience to guide you through your journey.
For more information about proposed superannuation changes and how these may affect your circumstance, reach out to the friendly team at Plutus Financial Guidance.