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Early release of super a key concern for advisers
Accessing superannuation and understanding the conditions for release was forefront of many advisers’ mind last month, as it proved the number one superannuation issue they faced.
AMP’s technical superannuation advice team reported a spike in interest in early access to super in particular, receiving over 2,000 calls from advisers on the topic over February.
“This month we saw a focus on understanding the conditions that need to be met before people can access their super,” AMP technical strategy manager, John Perri, said. “Many Australians don’t realise they can access super early if they change jobs between the ages of 60 and 65, even if they continue working in a new job.”
From an adviser perspective, he said that it could suit some people to access super benefits as a tax-free lump sum during that period or use it to commence a retirement income stream, both of which could prove more flexible and tax-efficient that using a Transition to Retirement pension.
Other hot topics raised by financial advisers on superannuation in February included:
- How much can be contributed to super through non-concessional contributions;
- How transition to retirement pensions work;
- How superannuation death benefits work; and
- How total and permanent disability insurance works within superannuation.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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