SMSF pensions are paying out too much

With ever lower interest rates the government must review pensions – they could start with the ‘distribution rate’ which is excessive.

Summary: Super funds in pension mode are required to distribute substantial amounts in pensions which are out of line with low risk returns. If these high payout demands are not reduced, more people will be forced onto the age pension. Meanwhile, there is a serious cloud over important segments of the Sydney and Melbourne property markets. Asian investors buy a high proportion of the inner city apartments, but if government changes make these investors feel unwelcome, that could trigger selling.

Key take-out: If you are buying a dwelling it probably makes sense to steer clear of those areas that are vulnerable to Chinese selling at least for the next two or three months.

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