Budget Horror

Hi Scott,

I am one of your Barefoot buddies. I write as I am greatly concerned about the proposed Budget changes to superannuation. I am 58 and I have four investment properties on which I have significant debt. A month or so ago I decided I would sell the properties, pay off the debt and put the profit into superannuation. I was hoping to get around $1.5 million into super (I currently have $300,000).

After the Budget I am limited to a lifetime cap of $500,000. What makes me angry is that the Government has said that people can have up to $1.6 million in super when they start a pension phase, but the new rules will not allow me to reach the cap. This all seems grossly unfair to me. What can I do?

Renae

Hi Renae,

Well, you can vote Labor! Their super policy will allow you to contribute $180k a year post-tax into super.

But, other than cosying up to Bill, let’s see what you can do:

Yes, you’re dead right -- the changes to super in the Budget are aimed at limiting the amount of money that wealthy people can invest into super in the future. But on the brightside, you’ve got $1.8 million in investable assets. That’s a very first world problem you’re suffering.

On a practical level, so long as you haven’t made a post-tax contribution since 1 July 2007, you’ll be able to contribute $500,000. If you’re married, your hubby could do the same in his fund. You can also make a pre-tax contribution of $25k a year until you’re 75 without having to satisfy a work test.

To be honest, though, super laws these days are about as reliable as a Donald Trump election promise. You get the feeling that, eventually, whoever ends up in charge will build a giant wall around super and tax the hell out of it.

Scott