Super lump sums may not be available
"DON'T be bloody silly!" I said.
The boyfriend of one of my staff members was told by a financial planner from one of the big banks to "salary sacrifice"- by which she meant increase your super contributions.
This young fella is just 24 and making a motza in Moranbah.
The planner told him he was paying too much and he should reduce this to 15% by having his employer make super contributions on his behalf and reduce his wages.
He asked my opinion as I had previously given him a savings goal because he wants to buy a rental property in Gladstone - and he's met it in just a few months!
And because we have a policy in my business of rebating fees to staff and their families and he thought that if I could arrange it, he'd save on costs.
The problem with super is that it is locked away until retirement age.
In 1992 PM Paul Keating introduced the Superannuation Guarantee.
Three percent it was then, 9% now, 12 percent by 2020.
At that point, I can distinctly remember quantifying the number of changes made to the superannuation system since 1980 in order to write a column for the Sunshine Coast Daily, sister paper to The Observer.
Eighty-one, it was!
And I reckon we've had a similar number since.
Based on current rules, this young bloke has 36 years until he can get his hands on his super tax-free.
There are reportedly 1.6 trillion dollar reasons growing exponentially as to why future governments will be unable to keep their grubby mitts off superannuation fund assets.
And over 13,000 days in which to come up with ways to do it!
Investment returns are crook now.
Imagine the result if government forced trustees to invest 25 or 30% of their fund in infrastructure bonds! Just surmising!
Nor can I see the tax rate remaining 15%: it's been doubled for some already.
Anyway, I really can't see members being able to take lump sums in 10, 20 or 30 years time.
Retirement pensions will be the order of the day, for sure; just ask retiring Commonwealth public servants.
