For many years, I have said that Superannuation is not the best retirement strategy. Whenever this is brought up in conversations, people think I’m crazy and some of my friends firmly disagree with this statement.
One of my friends who is an accountant knew that the Australian government is planning to alter the retirement contribution rules that will affect him and his clients. He was hoping (or praying) the latest law does not pass parliament. He finally understood what I was trying to say years back.
If your wealth is stored outside Super, these policies won’t make a difference to you. Your strategy includes the fact that these laws change forever.
Outside your Superannuation, the money remains in your control, without the restrictive and constantly changing rules and regulations. Plus, you can retire whenever you want without being tied to the ever-changing government-controlled retirement date.
In Australia just like other countries, the defined contribution retirement plans are constantly changing. During our conversation, the light bulb was lit. My friend finally understood why my strategies are different from what most people do.
I believe that governments (of all colours, logos and parties) are forced to keep changing these rules for decades to come. Each government does not have the income to fund its growing expenses, so laws must be changed.
I consciously chose not to play that game and planned my wealth creation strategies. If you are solely relying on your Super without any other investment strategy, that means you are always hoping things will be in your favor.
But remember, hope is not a strategy.