Older Australians want clarity around superannuation contributions, transfer balance caps, death benefits and home ownership issues, according to the latest insights from AMP.
One in 10 older Aussies says they “don’t feel confident at all” setting up their finances in order to maximise income for retirement, and more than 75 per cent have not sought any professional financial advice.
These were some of the insights from data released by TapIn, AMP’s technical advisory service for financial advisers.
Seeking information for clients, the TapIn service received more than 6800 calls in the six months to 30 June. Almost one in five questions related to super concessional contributions, including clarification around personal deductible contributions and unused catch-up concessional contributions.
Older Aussies not confident in retirement
The findings echo more AMP research from last year which found most Australians aged 50 and over find the retirement system too complex and nearly half don’t know if they will be eligible for the Age Pension.
That research also found three-quarters find the retirement system ‘complex’, three out of five wish they’d started planning for retirement earlier in life and the same number are ‘extremely concerned’ about the rising cost of living.
John Perri, head of TapIn and technical strategy at AMP, says people are still confused about superannuation rules and the problem will only grow as the superannuation industry matures.
“As Australia’s retirement system begins to reach maturity, instilling greater confidence in the ability of everyday Australians to navigate the important transition from accumulation to pension phase remains paramount.”
He said the end of the financial year brought a rush of queries from clients trying to maximise their tax effectiveness.
“With the reduction to personal income tax rates and thresholds from 1 July this month, many Australians have benefitted from bringing forward deductions such as by making personal deductible contributions by the end of financial year for greater tax effectiveness,” he says.
“The last six months have seen a significant focus on super contributions as more and more Australians look to make the most of unused catch-up concessional contribution provisions.”
Apart from super contribution rules, one in ten queries to AMP’s advice service involved dealing with a death benefit, treatment of assets and income, or condition of release or withdrawals.
Not confident, but not willing to seek advice
AMP found that despite the glaring knowledge gaps, most over-50s aren’t willing to actually seek out professional financial advice.
A financial expert can help make sense of complex superannuation contribution rules. Mr Perri says the cost of not seeing a financial adviser can often outweigh the cost of seeing one.
“Through valuable services like TapIn, AMP Advice is equipping more practices with the support they need to navigate a complex and evolving regulatory environment – with plenty of resources such as our publications, webinars, newly-launched podcast and regular events for our network,” he says.
“From explaining transfer balance caps to home ownership issues, our advisers play a critical role in breaking down complexity for their clients, helping underline the meaningful difference that advice can make in everyday lives.
Do you have any questions about super concession rules? When was the last time you sought financial advice? Let us know in the comments section below.
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Thankfully in my working life I was a Public Accountant and also did some financial planning for clients. I understand the superannuation system well and shortly, after we sell our home, will each be making a downsizer contribution of $300K into our SMSF.
But … I can understand how difficult it is for people who don’t have an Accountant or regularly keep in contact with the superannuation fund provider.
I was recently casually reminded about an inheritance tax that my super account would incur prior to it being transferred to my children upon my passing.
It was like a bolt from the sky.
Never heard of it before.
.a discussion with my mates confirmed no one else had either.
As I am 78 my options are apparently limited.
However I need an estate adviser to give professional advice.
Maybe also an accountant!
I thought super was easy!
Easier to just draw it out and pay tax on earnings.
Cheers