Question: If a person has more than $1.6 million in their super assets now, what will happen or will be required when the new rules come in with the excess $$?
Answer (by Paul Rickard): The Government has said that persons who currently have more than $1.6 million in pension accounts will be required to reduce this balance before 1 July 2017. They essentially have two choices to do this – make lump sum withdrawal(s), or rollover the excess into an accumulation account in super. My guess is that most people impacted by the change will do the latter, as even in accumulation phase, super is still an attractive investment vehicle.
Question: Peter & Paul, thank you very much for your thorough analysis of the budget impacts on super and I am hoping that you maybe able to answer my question below. I’m retired (genuinely not working) and currently 63 years young. I have all my super in pension phase and below the proposed $1.6 million cap.
I have maxed out on my NCC by being in excess of the $500,000 over the period from 1/7/2007 through to Budget night 2016. Is there any way I can make concessional contributions to take advantage of the $35,000 per year between now and July next year?
Answer: Yes, but you will need to meet the work test.
To do this, you will need to work 40 hours over any 30-day consecutive period. So, if you get paid employment for one full week, one day a week etc., you should qualify.
Generally, you will only need to meet the work test once in a financial year.
Question: Paul, I want to buy an ETF listed on the NYSE. It is DBA. I was wondering if there could be an ASX listed ETF holding roughly the same basket of commodities: corn, coffee…and if you would recommend it. Also, could you please give me the code for the best gold ETF, in your opinion, trading on the ASX?
Answer (by Paul Rickard): I can’t readily see a comparable ETF listed on the ASX.
In terms of gold ETFs, there are three – two unhedged, one currency hedged. Betashares offers the currency hedged physical gold ETF, ASX Code QAU.
Unhedged, there is the GOLD ETF form ETF Securities, and ZBOL from ANZ ETFS. Both are physical gold, management fee of 0.40%. The GOLD ETF has been around a little longer and may have a deeper market. Very little to choose between the two.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.