New strategies for planners with downsizing clients
Allowing people aged over 65 who downsize by selling to contribute an extra $300,000 per person to superannuation has emerged as one of the most welcome elements of last night’s Federal Budget.
Both financial planners and the superannuation industry have welcomed the move, not least because it is seen as providing people with more options and a greater ability to top up their superannuation.
The response of the superannuation industry was exemplified by Deloitte head of superannuation, Russell Mason who said his organisation supported the proposal for offering older Australians the ability to supplement their super in retirement through additional contributions from downsizing.
“As the majority of current retirees in Australia have not had the benefit of a lifetime of superannuation savings, this proposal has the potential to significantly help them towards financial adequacy in retirement,” he said.
Similarly, Financial Planning Association chief executive, Dante De Gori said his organisation supported the measure.
However he pointed to the complexity it would add to the superannuation system and claimed it represented only tinkering at the edges of the housing affordability problem.
The SMSF Association was a little more positive on the measure than the FPA, with the association chief executive, John Maroney pointing out that it would allow a couple to contribute up to $600,000 from the sale of their home to superannuation outside of the existing caps and balance restrictions.
“This means people can make a significant top-up contribution to their super funds, allowing them to fund a dignified and secure retirement,” he said. “While the measure may not be a significant trigger to encourage downsizing, we welcome the ability for older Australians to top up their superannuation where downsizing their home provides them with funds to do so.”
Recommended for you
ASIC has cancelled the AFSL of a Perth financial services firm following payments to its clients by the Compensation Scheme of Last Resort after a failed managed investment scheme.
Bravura chief executive Andrew Russell has announced he will be stepping down from the company, just under two years after his appointment.
Financial advice businesses with a younger, wealthier client base are enjoying higher valuations and increased attention from potential buyers than those with older clients.
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
