Superannuation is a tax-effective structure to save for retirement. However, frequent legislative changes relating to contributions and withdrawals have led people to become less trusting of the system, and more cautious around what the future will hold for the superannuation system as a whole.

Why is superannuation crucial to Australia’s future economy?

Due to Australia’s ageing population, the more Australians that part or fully ‘self-fund’ in retirement is important to reduce the reliance on our social welfare system. We cannot as a nation sustain our ageing population without self-funded retirees.

Why is the Federal Government considering changes with the Federal Budget?

The Federal Government has in recent years encouraged Australians contribute to billions superannuation, partly through offering very generous tax treatment of our superannuation money. Current strategies such as salary sacrifice, transition to retirement (TTR) and account based pensions are some of the most common strategies currently available to Australians.

Now though, both leading political parties are eyeing off superannuation as an easy place to claw back some cash to plug the budget hole and to compensate for the steady downturn across the mining sector. However, it is a fine balancing act for any government looking to increase revenue from super, particularly in an election year with ageing and high net worth voters.

The federal budget is understandably creating some concern among many self-funded retired Australians, including a number of Hewison Private Wealth clients. While we understand this concern, the point I’d like to make is that regardless of any changes the government might make to superannuation, it will continue to be the most appropriate structure to house retirement assets. It will not become inflexible to a point where retirement money is best saved elsewhere.

Hewison Private Wealth is equipped to manage any queries regarding superannuation management. Please don’t hesitate to contact one of our advisers with any questions or concerns you may have.