In 2020, more than ever before, and in light of the recently introduced COVID-19 Government superannuation relief measures, we recommend reviewing your superannuation strategy well in advance of the end of the financial year. Certainly, it’s a pertinent time to consider your investment strategy and understand that share market corrections may create market opportunities. And of course, it’s important to be patient and take a considered approach.
We understand how overwhelming the rapidly evolving COVID-19 situation can feel, especially when it comes to something as important as your financial affairs and achieving what matters most to you. We’d like to remind you that we’re here to guide, support and help you understand your options and make decisions about your financial plan.
Here we provide an update on THREE key temporary superannuation relief measures that may be relevant to you prior to June 30, 2020.
#1 Temporary reduction in pension minimum drawdown rates
The Government has recently announced they will halve the minimum pension drawdown amount from superannuation for the 2019/2020 and 2020/2021 financial years.
This means if you don’t require all of the income you’re currently drawing from your pension, you may be able to reduce your pension payments and therefore reduce the risk of selling assets to fund regular payments when the value of your investments has suffered a fall.
To find out how to make the most of this measure for your circumstances, please contact us. We can help you understand your options in context of any other financial concerns you may have around funding your retirement lifestyle both during and beyond the COVID-19 event.
#2 Temporary early release of superannuation
If you are significantly financially affected by COVID-19 and meet the criteria, you may be able to access up to $10,000 of your superannuation before 30 June 2020 and then a further $10,000 after 1 July 2020. This measure will be available until approximately September 2020.
While we understand that financial hardship may dictate your actions, we strongly recommend exploring all other financial avenues before deciding to apply for early release of your super. We implore you to seek advice and would be very happy to help you consider the future repercussions on your retirement savings should you take up this early release measure, particularly if you don’t plan to retire for several decades.
#3 Temporary property-owning SMSF rent relief provisions
The ATO has announced that in certain circumstances for the 2019/20 and 2020/21 financial years, for commercial property owned by a SMSF, the trustee as the landlord, may be able to offer a tenant rent relief because of the financial impacts of COVID-19.
This relief measure is also applicable for business owners who rent their commercial premises (in accordance with usual arm’s length compliance conditions) from their own SMSF.
SMSF trustees as landlords for commercial premises, should seek advice to ensure any lease alteration is valid and complies with the legislation and temporary COVID-19 relief measures.
Other superannuation considerations
In addition to the three relief measures highlighted here, you will also need to consider whether any changes in your circumstances (apart from COVID-19) will mean that super strategies not previously suitable are now appropriate for you. These include maximising your concessional contributions to super, making tax effective Spouse contributions to super, and managing capital gains and losses. Your financial adviser is best placed to help you consider these strategies.
Your next step…
With uncertainty in the current health and economic context of COVID-19, financial decisions can feel particularly difficult. Please remember we’re all in this together and you can trust us at Stratus Financial Group to continue providing advice and services to help you to achieve your financial goals.
Please don’t hesitate to contact us if you have any questions or concerns. Please contact Brett, Steve or James by calling +61 (0)7 3007 2007 or emailing firstname.lastname@example.org
Stratus Financial Group helps families, professionals, executives, business owners and retirees manage their complex financial affairs and coordinate their professional advisers.
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This is general advice only and does not take into account your objectives, financial situation or needs, so you should consider whether the advice is relevant to your personal circumstances. You should also read the relevant Product Disclosure Statements (PDS) before making any financial decisions.