Tuesday, May 9, 2017

Is super really the be all and end all?

Personally, for myself, the answer is yes, because every few years politicians seem to either try to make superannuation easier for the everyday person, or more complex to drive a further wedge between the role of the accountant and financial planner.  So, as a financial planner, these constant changes mean that I will not be lacking in work for the next 30 odd years, and so superannuation is the be all and end all for funding my career.

However, as a layperson, the answer will often depend on your age.  For those less than 10 years out from retirement, the focus shifts heavily from assets outside of superannuation to getting those assets inside superannuation.  There are two reasons for this.  The first is that, in general, accessibility to the funds is less of a problem as the client is more or less setup and their expenses (aka...children) have decreased.  The second is that we can be about 80% sure that the powers that be won't be changing the rules too drastically, and that any changes that are made, we should be able to cope with.

What I find interesting is that there seems to be a lot of hand wringing and teeth gnashing that younger people, those with more than 10 years until retirement, don't want to contribute more to superannuation than the stock standard 9.5%.  My question is, why should they?

I spend a considerable amount of time with my younger clients emphasising and encouraging them to forward plan their budget so that as their income increases, their expenditure stays the same and they can build for their future.  This often requires a steady hand, with deliberate and well thought out decisions using stable, legislated tax systems.

So, rather than more changes to help the Government balance their books (much like the ones coming in on July 1, 2017), the politicians could provide some consistency and surety in the superannuation system, rather than gimmicks one year and austerity the next.  Perhaps then, we could attract the economy's younger cohort to the superannuation party.

Find Erin* at Achieveit Financial Planning or call for an appointment on 07 4638 5011.
*Authorised Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687.

This is general information only and does not consider your personal circumstances.  You should not act on any recommendation without obtaining professional advice specific to your circumstances.  We recommend you speak to a financial adviser before acting on any of the information you read on this website.

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