Why Barefoot Investor believes the government will continue to target your super

Retirees with more than $3m in super will be absolutely fine but Scott Pape worries about how tough the future will be for all those ‘ordinary Australians’ with little nest eggs.

Liz was about to start her first day at a new job, and I wanted to write something encouraging to her.

So, I fired up ChatGPT – the artificial intelligence app that is so hot right now – and gave it the following instructions:

“My wife Liz is restarting her career after a decade of mumming. Write her a note that’s loving, supportive, and above all warm.”

Three seconds later, ChatGPT wrote:

Liz,

I know it’s been a while since you’ve been working, but I have no doubt that you’re going to smash it.

Over the years, I’ve learned that success often comes from embracing change and adapting to new challenges. And that’s exactly what you’re doing today – stepping out of your comfort zone and taking on a new challenge with grace and determination.

I’m so proud of you for everything you’ve accomplished so far, and I’m even more excited for all the amazing things you’ll achieve in the future. I believe in you and I know that you’ll make a positive impact in your work and on those around you.

Remember, we’re a team and I’m here to support you every step of the way. So, take a deep breath, put your best foot forward, and let’s make today an amazing day.

Love, Scott

Not bad, eh?

So I ‘Ctrl C, Ctrl V’d’ it over to my lovely wife via text.

Quick as a flash she replied: “Oh honey! If you hadn’t told me you were playing with that AI thing, I’d probably have teared up thinking you wrote it.”

(I know, I know. WHY DID I TELL HER?!)

Scott Pape and wife Liz on their property in Victoria. Picture: David Geraghty

There’s a reason ChatGPT is the hottest thing since Mark Zuckerberg’s fringe: it creates incredibly clear, well-researched writing. Plus you can get your high school English teacher on and demand infinite edits from the bot:

“Not so wordy!”

“Make it funnier!”

“Okay, now turn it into a rap song.”

And it dutifully does it all, in seconds.

Yet it’s not just writing that this bot excels at. It reportedly aced a high-level MBA at the prestigious Wharton School in the US. Which explains why educators across the world – including public schools in NSW, Tassie and WA – have banned students using it.

However, employers certainly won’t be banning this technology – they’ll be embracing it.

Years ago robots took over factories … and now ChatGPT has its sights set on the watercooler crowd … including me:

In fact, this entire article was written by ChatGPT.

Just joking!

(Though I did ask it to “Write a 500-word article on interest rates in the style of the Barefoot Investor” … and it did, in a jingo-y, humorous, but commonsense way … OH MY GOD!)

So maybe I’m getting ahead of myself. After all, no-one could answer money questions like these … right?

Well, one study found that ChatGPT could answer financial questions with a high level of accuracy, “creating required content in 3.88 seconds”.

Okay, let’s not get too R2D2 here. I don’t believe ChatGPT is going to take your job anytime soon.

After all, AI bots are still in their infancy. However, it’s also true that they’re kind of like The Terminator – they keep learning around the clock, getting better and better.

So it’s not perfect (yet). But then again, as my wife will tell you, neither am I!

Tread Your Own Path!

Artificial intelligence app ChatGPT is growing in popularity.

*&^%$^* the Labor Government

Hi Scott,

I’m writing on behalf of my mum, who is distressed about the upcoming changes to superannuation. She is a widower who has worked hard all her life, saving like crazy to ensure she had a secure retirement (believing it was her responsibility not to be a burden to society via the pension) and to leave a tidy nest egg for her kids.

Mum has been advised by her accountant that she is a smidge over the $3 million cap; once he wraps his head around the changes he will, I’m sure, offer her excellent advice on how to proceed.

But here is my question: what the *&^%$^* is the Labor Government thinking about attacking the little nest eggs of ordinary Australians? And what the **&^^% is anyone doing about it?

It appears that, despite negative press attention, the changes are going full steam ahead. It’s just not fair! Thanks for listening, Scott, as no-one else seems to be hearing our small voices of protest.

Linda

People with more than $3m in super are not ‘ordinary Australians’

Hi Linda

I’m sure your mum must feel like she’s being unfairly targeted … and her only ‘crime’ was that she worked hard, saved harder, and made savvy financial decisions! After all, she could have just peed all her money against the wall and retired on the full pension, right?

Well, that’s true.

Yet what’s also true is that your mother is not “an ordinary Australian” and she does not have a “little nest egg”. She’s got more cheese stuffed in her super than 99.5% of the population!

And besides, as you’ve said, she has access to an accountant who will dutifully work out a way to siphon that ‘smidge’ of the tax-affected part of her $3m balance into another low-tax environment.

So she’s going to be absolutely fine.

However, what most Australians are really worried about – and what the media have jumped on – is whether this move by the Government is the ‘thin edge of the wedge’.

So, is the media right? Is the Government really aiming to come after your super?

Bloody oath they are!

Yet that’s hardly breaking news. After all, with each passing year, politicians – on both sides – have made super less attractive. Especially for higher income earners.

They’ve deliberately limited the amount you can put in each year and how much you can keep in there, and now they’re upping the taxes.

With each passing year, politicians – on both sides – have made super less attractive.

My take?

They’ll keep doing it.

Reason being, Australia has a rapidly ageing population. Looking after old people is expensive. As are programs like the NDIS. Someone needs to pay for it, and the heavy lifting will come from the wealthiest people in our country.

So to your question: what’s the Labor Government doing attacking the little nest eggs of ordinary Australians?

They’re not.

It’s just that the Government isn’t in the business of providing a tax haven for wealthy people.

Or helping your mum provide a tax-effective inheritance for you.

The Government’s end game is for super to (hopefully one day) take some heat off the age pension.

So let’s talk about the “little nest eggs of ordinary Australians”:

The median super balance for Aussies aged 60–64 is just $139,056 for women and $180,928 for men … and many of these people will have to use their super to pay off their home loan when they retire!

Now that’s tough!

A Thank-You from Kate

Last week’s column on Kate – the young mum who was diagnosed with aggressive breast cancer – got one of the biggest responses I’ve ever received. We’ve got an amazing community: Barefooters wrote in offering their homes, the money in their Give jars, and lots of kind messages of support.

So here’s an update from Kate:

This week has been a bit foggy as I’ve started chemo, and I’m still recovering from the birth – plus I’m in that newborn bubble! We have been sprinkled with kindness in every direction we turn, and we are eternally grateful. Thank you.

P.S. Keep checking those boobs.

DISCLAIMER: Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.

Originally published as Why Barefoot Investor believes the government will continue to target your super