The No-Regrets Retirement Newsletter
Welcome to this my last newsletter for the calendar year 2022 and what a year it has been! While I am sure 2023 will be a big improvement of this year it will bring its own issues.
As a financial planner I am focused on helping my clients get as much money into super as possible as a means of setting them up for a financially secure retirement. So I am very pleased to draw attention to the Federal Government's latest move.
The Federal Government has now passed legislation to reduce the eligible age from which Australians can take advantage of the downsizer super contribution rules from 60 to 55 years of age – the second reduction this calendar year.
In addition, the government will extend the asset test exemption period on the sale proceeds, when income-support recipients sell their principal residence, from 12 months to two years.
It will also change the income test so only the lower deeming rate of 0.25 per cent is applied to principal home sale proceeds when calculating “deemed income” for two years after the transaction.
These changes should help anyone who might be undecided about taking advantage of the downsizer contributions strategy, to embrace it with open arms.
Making a downsizing contribution can be extremely complex so speak to me as soon as you start thinking about it.
This move to enable more Australians to put more money into super and so boost their income in retirement, comes at a very challenging time for the Australian economy.
The sudden eruption of domestic inflation, largely caused by the war in Europe and pandemic supply chain issues making it harder to import and make goods, has dragged the country back to the bad old days of the seventies and eighties.
While its tempting to dismiss inflation as not being so bad, I explain how inflation acts like a cancer in any economy and can undermine product investment and economic growth.
Finally, what is happening with Medibank Private. It recently found itself in the middle of a major, highly publicised cyber hack, and the market took fright and wiped some $2 billion dollars or almost 20 percent off the value of this company almost overnight. Should you sell?
My advice is definitely no. This is typical of the share market over-reacting to bad news, that will be forgotten in a few months and life will get back to normal. In fact, if you had some spare cash, I would be thinking of buying this stock.
Thank you for reading these newsletters through 2022. I know many clients and non-clients have found them extremely interesting and I look forward to providing more articles and more interesting information through the year ahead.
Merry Christmas everyone.