Happy new Financial year – Welcome to F21 :).
What a year 2020 has been so far.
The upheaval that Covid19 has caused across the world.
The world stock market falls – Australia is -13% year to date and volatility has increased dramatically.
The Government’s budgetary responses such as :-
- the Centrelink $750 payment (expect another in July :)),
- the $10,000 early release from superannuation,
- the multiple sole trader/business handouts, and
- the new 50% reduction in the amount you are allowed to draw from your account based pensions.
I have a feeling my grandchildren’s grandchildren will be paying this back.
The early release from superannuation take up has been huge – 2.1 million people drawing $15.9 billion – with another round due early in the financial year. This has brought into question the liquidity (amount of monies that can easily be cashed to pay expenses) within funds and whether everyone drawing the funds is actually eligible.
Many industry superannuation funds have been forced to revalue their property and infrastructure assets (resulting in common falls of 7% in unit prices).
There is a resultant knock on. The Government has allowed us to reduce the minimum account based pension draw down by 50%. We were led to believe that you would have the choice to elect the new minimum if you wanted.
However, upon further investigation with the providers we found out that if you are on the old minimum draw down you will be switched to the new 50% less minimum. In my view that’s to help reduce the inevitable draw downs going into the new Financial year, protect the fund liquidity and of course help to preserve your capital balance.
If you want us to amend it for you we can do it simply – please contact us to adjust it. If you’re happy to accept the new minimum you don’t have to do a thing.
On another note – our ongoing reviews continue to roll on. You may have received one in the mail already. We are still conducting phone and Zoom meetings if you want to go through the review documents.
We have started to see less vulnerable clients in the office again – so if you want to come and see our smiley faces and you are in one of the less vulnerable people class please contact us to book it in.
By the way – our coffee is still as good as ever 🙂