SUPER is likely to take a hit in today’s budget, but for most of us it should not be an issue.
The government is tipped to crack down on high-income super tax concessions cutting the threshold to $180,000, from $300,000 to draw an extra 244,000 taxpayers into a higher tax net.
But in 2013-14 only 380,000 of the 13 million taxpayers earned more than $180,000.
Indeed most Australians earn closer to the average income of about $80,000 so would not be affected by these changes, says Sally Loane, chief executive of the Financial Services Council.
“More Australians need to be able to independently fund their retirements,” she says adding that the rich will always be able to afford to retire comfortably and the poorest in society will always be eligible for a government pension.
To that end, she says, they need to be encouraged to save as much as they can into their super — at all stages of their life.
The Treasurer is also likely to introduce more flexible super contribution measures to benefit low-income earners and people with broken employment histories, such as women who leave the workforce for a period to raise children.
Sally Loane hopes the Government takes a long-term view to super policy.Source:News Corp Australia
A recent survey by Rabodirect found that only 10 per cent of Baby Boomers and 13 per cent of gen X think their employer funded super will be enough to cover their retirement needs.
Only 24 per cent of gen X and 21 per cent of Baby Boomers say they have made voluntary contributions.
“We must take a long-term view of any superannuation policy announced in coming months,” Loane says who has also advocated a more flexible system to make it easier for more to save.
The government may also slash the maximum amount we are allowed to save into super to $20,000 a year. At the moment if you are under 50 you can save up to $30,000 in your super a year, which includes the compulsory contributions from your employer.
At the moment, of you are aged over 50, you can save up to $35,000.
“My advice to my children is to start making extra contributions to super from your first pay,” she says.
“Think about your super from your very first pay check,” Loane advises. “think about your fund — do you have a choice of fund? what’s in your fund? what does it offer? — ask some questions.”
“If you can put more into your super voluntarily then do so.”
http://www.news.com.au/finance/superannuation/dont-let-government-tinkering-with-super-put-you-off-the-main-game-just-save-more/news-story/0527d9233a7ad4f79fa3e328efdbca98