Still great to be in Australia!
With the world beyond Australia’s shores looking increasingly dangerous, it is comforting to focus on how lucky we all are to live in Australia and be able to plan and enjoy a happy retirement.
Reflecting this Australia’s super funds excluding self-managed super funds, received a record $57 billion in contributions during the June quarter, some 13 per cent higher than in the same period in the previous year.
All up, after all outgoings were considered, it was estimated Australian super funds received $28 billion in contributions, of which some $12.8 billion, again a record amount, was pumped into the Australian share market.
Prompting me to think, the only way is up.
Some of this has been due to changes concerning contributions, particularly the Federal Government decision to remove the work test. This test previously required anyone over age 65 to confirm that they had worked 40 hours in a one-month period before they could contribute to super.
The abolition of the work test has made it much easier for those aged between 65 and 75 to squeeze more money into super on an after-tax basis or ‘non-concessional’ basis and most older Australians are taking full advantage of it.
Another key source of contributions has been the Government’s decision to allow Australians to make a “downsizer contribution” of up to $300,000 each to superannuation or a combined total of $600,000. This can be a big game changer for many people as they enter retirement.
However, while you might think you know all there is to know about downsizer contributions, I think the article in this month’s newsletter will help expand and clarify your understanding of just when you can and can’t make a downsizer contrition.
As more and more money flows into super, it is even more important than ever to leave clear instructions regarding what should happen to it in the event of your passing. Basically, there are two ways of doing this.
If your super is still in accumulation mode, you can put in place a binding death benefit nomination or if it’s in pension mode, you can put in place a reversionary pensioner nomination. Helpfully, the difference is clearly explained in this month’s newsletter.
Finally, how to help adult children buy into the property market has become the most frequent question that I am asked as a financial planner, so I thought it would be timely to outline what I believe are three biggest traps and how to avoid them.
If you know of anyone who is unsure how to arrange their finances as they move into retirement, please encourage them to contact me. If they mention this newsletter, I am happy to send them a free copy of my book The No-Regrets Guide to Retirement.
It could be a lifesaving, if not retirement saving, moment for them.
Patricia Howard
0427 429 817
Patricia@patriciahoward.com.au