In the last Federal budget, the Howard Government unveiled a series of major proposals designed to make superannuation a more attractive investment vehicle for all Australians. Many of those changes will come into effect as of 1 July this year.
In this issue we take a snapshot of the key amendments to assess what they mean and how they will impact workers saving for retirement.
In this issue we take a snapshot of the key amendments to assess what they mean and how they will impact workers saving for retirement. Importantly, some of the changes that take effect from the start of the next financial year means there’s a narrow window of opportunity to transfer assets with a large value held outside of superannuation into a concessionally taxed environment if action is taken before 30 June 2007. This may involve the selling of shares and/or other investment assets.
This opportunity relates to a fundamental change, whereby pension payments from a superannuation income stream will become tax free once an individual reaches age 60. This is in addition to the existing tax free earnings environment that a superannuation income stream currently enjoys. So for those nearing retirement, this may be a once-off opportunity to potentially avoid a much larger tax liability in the future.
Also in this issue we take a look at geared investments, that is the use of borrowed funds to invest in assets such as property or listed securities. With both the share market and the property market showing strong growth, the use of products such as margin loans can be an attractive option for investors wanting to build a long-term investment portfolio.
‘Gearing up for long term growth’ examines the potential benefits, as well as the potential risks. So, as always, it’s important to speak to your Meritum Financial Adviser to ensure that a strategy can be devised that matches your individual circumstances.
