Are you concerned you do not have enough to retire on? (NEWS – 40% of Australians retire 5 years before financially ready). There is a call by many to lift contribution maximums to super, in order to help close the gap where not having enough will mean retirees will need to rely on the government/social security to have enough to live on.
Miranda Brownlee at SMSF Advisor Online reports on suggestions by an advisor group recently to lift contribution maximum caps to take the burden away from the taxpayer –
“A lift in the concessional contribution cap is essential to ease the burden on the social welfare system, according to a Sydney-based financial advice boutique. Speaking to SMSF Adviser, Omniwealth’s managing director Matthew Kidd said the current concessional contribution cap must be raised if the super system is to be successful in reducing the burden on the social welfare system in the future.”
“I would ideally like to see people, at least those over the age of 50, being able to put upwards of $100,000 a year into super concessionally and maybe have it tiered so that once you’re over 40 you can go up to 50,000.”
Mr Kidd said calculations of what someone needs to retire on and what they can put into super at the moment shows a significant gap.
“There’s going to be pressure on the social welfare system down the track because people can’t put enough into super,” he said.
“It’s a bit of a ‘rob Peter to pay Paul’ scenario; you’ve prevented or reduced the amount of money going into super to stimulate the economy and keep the economy ticking over but you’ve done damage down the track.”
Mr Kidd said when Gen X investors and the younger baby boomers begin to retire, there’s going to be a gap between what they have in super and what they need to retire on.
“The whole idea of the superannuation system was to take the burden away from the taxpayer,” he said.
Of course the call to lift contribution caps has been out for years –
What are your thoughts – comment below!
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