Baby boomers unclear about super laws
More than 50 per cent of Australians nearing retirement are completely unaware of last year’s Budget changes to superannuation, a new survey has found.
According to the survey commissioned by St George-owned Asgard Wealth Solutions, of the 4.8 million Australians approaching retirement, more than half were completely unaware of the 2006 Budget changes to super including the once-in-a-lifetime opportunity to put up to $1 million into their funds tax-free before June 30.
Yet, what was more startling was that while nearly 50 per cent claimed they were confident in their knowledge about the changes to Australia’s super laws, only 31 per cent could accurately pinpoint even one aspect of the new rules when pressed for details.
Men over 40 were more likely than women to have knowledge of the changes to super, but even then, 63 per cent were unable to correctly specify even one feature of the new laws when probed.
Asgard’s wealth management expert Bryan Ashenden said the lack of superannuation knowledge was of concern.
“It is a serious concern that the perceptions of Australia’s over-40s are incongruous with reality given there are now significant, but in some cases short-lived, opportunities to generate wealth for retirement,” Ashenden said.
He said the research indicated that nine in 10 Australians approaching retirement had assets they could use now to boost the balance of their superannuation, but few were planning to do so, despite the looming June 30 deadline to put up to $1 million into super tax-free.
“One of the great misconceptions around the new laws is that you have to be rich to take advantage of the changes.
“But 30 per cent of the men surveyed and 21 per cent of the women said they had equity in investment properties that could potentially be used to augment their super tax-free. Fifty per cent also said they had money in shares, 32 per cent in managed funds, and 70 per cent in savings or term deposits which could potentially be used.
“The June 30 concession allows you to put any amount up to $1 million into your fund, so even if you have a relatively small amount to invest, super could still offer a highly tax effective investment opportunity.”
Ashenden said other reasons for people not taking advantage of the opportunity included not knowing enough about it (43 per cent), scepticism that future governments may change the laws (30 per cent), and simply not wanting to face sorting out their super (21 per cent).
“Surprisingly it was high income earners — $70,000 or above — who more than any other group said they couldn’t face sorting it out.”
The survey also found that women were more likely to take action in relation to the changes, with 32 per cent of women in comparison to only 27 per cent of men having either already taken advantage of the new rules or planning to.
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