Along with a raft of legislative change, the Australian Securities and Investments Commission (ASIC) has also introduced new licensing requirements for accountants who work with and advise Self Managed Superannuation Fund (SMSF) Trustees. Only approx. 10% of accountants have complied with these changes to date.
As such if you, as many, consider your accountant would be your 1st port of call for Financial Advice, they will likely advise you, they are unable to provide the information you require & should consult a qualified Financial Adviser / Planner.
This is general advice only and you should seek expert financial advice from a qualified financial adviser before acting on any of the information covered in these topics.
The 6 good news points for Australians as we move to the 12% Superannuation Guarantee (SGC)
- It will assist the Australian retiree aspiration to be self funded in retirement. Recent Core Data analysis found that approx. 80% of couples in retirement wish to spend approx. $60,000 in retirement or as a single approx. $43,000. The full age pension provides approx. $36,000 which is just above the poverty line
- Many investors have been hoodwinked into thinking borrowing large amounts of money to invest into residential property is the ‘silver bullet’ for all of their retirement funding needs. This is a riskier strategy than taking advantage of the compounding effect of 12% SGC
- 2 million Australians are already getting the advantage of 12% SGC and as such are looking forward to a more comfortable lifestyle in retirement than was the case 20 years ago.
- There are currently 23 retirees to 100 workers at present. This will rise to approx. 30 by 2050. Accordingly we will need to see a rise rise in the number of self funded retirees. The alternative is increased taxation & reduced welfare, neither of which are popular political policies.
- The Australian superannuation system is a worldwide success story. There is now approx.$3 trillion in the Australian super system. This represents on average approx. $225k for each of Australia’s 12 million.workers
- The number of Australians on the full age pension has been rapidly declining, mainly due to superannuation. It currently stands at approx. 70%, where it was approx. 80% in the 1990’s. If SGC incresses to 12%, this figure should reduce to approximately 50% by 2050.
So let us look forward to the magic of 12% SGC compound interest unfold for Australian investors.
We lie loudest, when we lie to ourselves – Eric Hoffer
