Government punishes Grey Nomads
First it was local councils closing down free camps. Next, it was state governments like Victoria charging us big bucks for staying in national parks. Now, it’s the Federal Government that’s decided to bring the hammer down on the grey nomad, in particular retirees (or those about to retire), and pensioners.
Now, many of you might have missed this little ‘insignificant’ change to superannuation in last week’s federal budget announcement, mainly because mainstream media was much more focussed on smokers, big corporations, tax benefits for upper-middle income earners etc.
The government’s plan is to cap the amount of accumulated super that could be transferred to retirement balances to $1.6m, reduce the annual cap on concessional contributions to $25,000 from $30,000, and a lifetime non-concessional contribution cap to $500,000.
You can read a more detailed breakdown here.
To put this in English, the government wants to limit the amount of money you can accumulate in your low-tax superannuation accounts. Now I’m no financial advisor or accountant, but it sounds to me that in attempt to slow down high-income earners, the older generation like me and you are nothing but collateral damage. Now, if it stops high income earners dodging taxes, it’s a good thing, but what I’m concerned about is the large number of the older generation that have worked incredibly hard to build their nest egg. All of a sudden their hard work and their long term retirement plan is going to get flipped on its head. Super was meant to be a reliable, secure alternative to the pension, and now it seems like retirees are getting punished for no good reason.
This ‘nest egg nightmare’, plus the changes to asset thresholds for pensioners that kick in January next year, have a huge potential to affect caravanners on the road. Self-funded retirees, or those that have been planning their last 10 years to be a self-funded retiree, all of a sudden have a cap on contribution amounts, and may have to change their whole budgeting plan for their upcoming travels.
This change to super contributions is quite complicated, so the best advice I can give you is to talk to your accountant now before it’s too late, and see if these budget changes are going to affect your future as a retiree.
What are your thoughts? Have the government got it wrong? Are us oldies getting punished for no reason? How is this going to affect your retirement plans?
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