Your Money Q&A
Q LITTLE has been said about increments to the $1.6 million super cap. While I understand it will go up in $100,000 increments as per CPI, what I don’t understand is if the CPI for next year is only 2 or 2.5 per cent, this increment will be between $30,000 and $40,000. So in July next year, will the super cap go up the $100,000 or will we have to wait until the following year or maybe even the year after that?
A YOU are correct – the increments are in $100,000 lots. If inflation remains at current levels it should take about three years for the cap to reach $1.7 million.
Q I RECENTLY heard you speak on radio, saying a person can get about 4.6 per cent interest on savings. I have money in a bank fixed-term deposit, but am sure there are other places to invest that are safe and offer a little higher interest than banks.
A I WAS not referring to bank accounts; I was talking about investments such as managed funds that are skewed towards providing an income stream and invest in income-producing shares and fixed interest securities.
They could reasonably be expected to produce between 4 per cent and 8 per cent over the long term. But keep in mind that negative returns are possible if the share market plunges. Also, many good-quality shares are paying between 3 per cent and 6 per cent, often fully franked, giving net returns of up to 8 per cent. Your adviser will be able to recommend appropriate investments to you.
- Do you have a question? Send to Q&A, PO Box 130, Wyong NSW 2259 or email edit@thesenior.com.au A selection of questions will be covered in this column.
