Lift super caps to ease pressure on govt, says adviser
A lift in the concessional contribution cap is essential to ease the burden on the social welfare system, according to a Sydney-based financial advice boutique.
Speaking to SMSF Adviser, Omniwealth’s managing director Matthew Kidd said the current concessional contribution cap must be raised if the super system is to be successful in reducing the burden on the social welfare system in the future.
“I would ideally like to see people, at least those over the age of 50, being able to put upwards of $100,000 a year into super concessionally and maybe have it tiered so that once you’re over 40 you can go up to 50,000.”
Mr Kidd said calculations of what someone needs to retire on and what they can put into super at the moment shows a significant gap.
“There’s going to be pressure on the social welfare system down the track because people can’t put enough into super,” he said.
“It’s a bit of a 'rob Peter to pay Paul' scenario; you’ve prevented or reduced the amount of money going into super to stimulate the economy and keep the economy ticking over but you’ve done damage down the track.”
Mr Kidd said when Gen X investors and the younger baby boomers begin to retire, there’s going to be a gap between what they have in super and what they need to retire on.
“The whole idea of the superannuation system was to take the burden away from the taxpayer,” he said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.