In light of potential changes to the superannuation system flagged in the Tax Discussion Paper and Intergenerational Report, investors should look to alternate investment options, says Centuria.
Investors should consider options outside super in order to boost retirement savings, a statement issued by Centuria Life said.
“Australians need to consider their options,” Centuria general manager Neil Rogan said.
“If there are changes to the way super is taxed and when you can access it, those who only invest within their super fund may need to look at alternative options and consider the costs and benefits of holding investments outside of superannuation.”
Investors should “take a holistic investment approach and identify and assess options that may be appropriate for you for investing outside of super to potentially boost retirement savings”.
“Whilst investments outside of superannuation will each have differing taxation rates, investments like shares, property and life insurance investment bonds held outside of superannuation should be considered in a holistic investment approach,” Mr Rogan said.
According to the Tax Discussion Paper, within 10 years half of all taxpayers will be in the top two tax brackets.
Investors therefore need to be aware of changes and to consider other investment options, he said.
Another key area of reform is the age at which super can be accessed, he said.
“If the access age increases [to 70] it may disadvantage those who have the means to retire at 65 by taxing early withdrawals.
“It may also impact how much you can withdraw at 60 and how much you can use as an income stream,” Mr Rogan said.
“We are finding that some investors are giving consideration to diversifying into other potential investments they are able to access more easily when they want to retire,” he said.
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