be afraid, be very afraid.

When David Morgan suggests (AFR 12/6/03) “…accelerating the phased increase in the preservation age for superannuation from 55 to 60…..” those of you currently aged less than 50 who are anticipating (semi)retirement at 55, should be re-assessing your plans. It’s most unlikely you’ll be able to access your super until you are at least 60, even then I suspect you won’t be able to take it as a lump sum.

With the demographics of employment fixed into an unalterable decrease in the number of workers, resulting in the inevitable decrease in income taxes; and the dominance of the ‘baby boomers’ who will not countenance any restrictions in health care, where will future governments find extra taxes ? From superannuation that’s where ! If you think that legislation governing super has altered a great deal in the last 10 years, you ain’t seen nothing yet!

UPDATE: to Down on the Farm.
Where it isn’t your main job, a business that can’t satisfy the commercial business rules can defer losses to a future date when one of the tests is passed. A detailed explanation of the non-commercial business losses rules, and the four tests and two special circumstance entitlements, is given in a tax ruling, TR 2001/14.

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Geoff Honnor
Geoff Honnor
2022 years ago

I’ve worked out that I’ll be able to afford to retire some time after my 115th birthday…..

Homer Paxton
Homer Paxton
2022 years ago

People should NOT be able to take Superannuation as lump sum. This stupid idea must have been thought up by financial planners.
It should only be taken as an income stream as they is what they have been used to all their life.

Of course if Super was taxed only at the benefit stage and at the person’s MRT then it would happen austomatically!

Reg Braddock
Reg Braddock
2022 years ago

Let’s see. The government forces us to put our money into its chosen investment vehicle. It taxes it on the way in, taxes the earnings on it, and then taxes it when it comes out. This guarantees that there will be less at the end and less tax then too, when the government would most like to have it. On top of that, there is the certainty that various hare-brained schemes for using superannuation to the “national good” will be forced upon us.

There’s only one solution: save for you own retirement independently of the superannuation system. Treat any superannuation that might – just might – be available when the government thinks you are allowd to have access to your money as a bonus.

No one should their retirement to the superannuation system. If you save outside the system, you have the ability to choose how you will live your life.

Ken Parish
Ken Parish
2022 years ago

It’s lucky I’ve renegotiated my employment contract with NTU to cash out my super entitlement. That way the government isn’t going to get to keep it, and I can apply the funds to investment projects and minimise the applicable tax rates in ways over which I have some control. I always suspected occupational super was a scam, and this just proves it.

As for Homer’s leftie paternalistic crap about not allowing people to access their own money as a lump sum, well it’s typical isn’t it. Maybe some people are incapable of managing their own money and need to be protected from themselves, but surely the answer is to educate them not remove their freedom. And maybe others will try to organise their affairs so they get the lump sum and still qualify for the pension, but surely the answer is to close those loopholes.

Homer Paxton
Homer Paxton
2022 years ago

Ken,
Australia is the only couintry that allows lump sum in the Western World.
Lets see we have the lowest participation rate of males aged 55-65.

That’s called double dipping. Id a person gets an income stream during their working life usually called either wages or salary then it makes sense to continue that in retirement otherwise they will make investment choices they wouldn’t normally make hoping that their pot of gold will pay it off and then find out the pension is too low. of course they can’t sell the house because that is going to the children so why not whinge about the injustice of superannuation!!!