Budget speculation leading to irrational trustee decisions
Following some of the recent Budget speculation, SMSF practitioners have been told to watch out for those clients making rushed contributions to their fund without proper consideration.
Speaking to SMSF Adviser, Verante Financial Planning director Liam Shorte said a lot of SMSF trustees are rushing to make contributions at the moment without checking their three-year contributions history.
“I had a client phone me to say they were going to put money into the fund to ensure it was in there before the Budget, but luckily they phoned me before they did because they were already up to their caps for the three years,” said Mr Shorte.
“They can’t put any more money till after 1 July, so we were lucky enough to be able to stop them making the contribution.”
Mr Shorte said practitioners should ensure their clients carefully consider any strategies involving risk or movements of large sums of money before implementing them.
The only SMSF trustees should strongly consider implementing before the Budget, Mr Shorte said, is transition to retirement income streams (TRIS).
“If you’re entitled to it, in 99 per cent of cases you should be using it. If it doesn’t work out for you, you can just go back to the accumulation phase,” he said.
“So strategies that don’t involve risk or investments are probably the ones you should look at.”