$1 million or $2 million retirement, SMSF fee hike, ATO hit list, making contributions, life insurance, Q&As and more
Welcome to our AUGUST 2012 SuperGuide newsletter, the second of two SuperGuide editions published for August 2012. The highlights of this month’s newsletter are:
- CRUNCHING THE NUMBERS ON A $1M OR $2M RETIREMENT. We have updated and revamped two of our most popular features. Due to many reader requests, we have included figures catering for more modest returns in retirement (5%) in addition to the 7% figures. You can discover what a $1 million lump sum, or what a $2 million lump sum can give you as a single person, or a couple, and whether you retire at 55, or at 61 or 65, and whether you want the money to last until age 87 (average life expectancy) or age 100. In a separate updated article, I explain why $1 million generally won’t last forever, even though at least one reader has proved otherwise.
- HOW MUCH SUPER IS ENOUGH, IN A LOW-RETURN ENVIRONMENT? What happens if you choose, during retirement, to invest your money in assets that deliver low returns? By investing your money on retirement at 5%, rather than 7%, you will need at least $80,000 more in savings (and potentially up to $150,000 more) on retirement to secure a ‘comfortable’ lifestyle of $55,000 a year for a couple, than if you invested in assets returning 7%. Due to overwhelming reader demand we have revamped our wealth articles to also include 5% returns.
- NEW LAWS: IS YOUR SMSF DUE FOR A SUPER SERVICE? New rules are now in place for SMSFs forcing trustees to take special care when considering a fund’s investment strategy, and when valuing the assets of a SMSF. Read about the new rules and discover how you can help your SMSF operate within the super laws.
- SMSF COMPLIANCE: ATO’S HIT LIST FOR 2012/2013 YEAR. Will your SMSF be targeted? Click on the link below.
- SMSF WHACK! ANOTHER 11% INCREASE IN ATO SUPERVISORY LEVY. In the past 5 years, the ATO supervisory levy imposed on SMSFs has increased 400%. Find out what’s behind the latest fee hike, and where your money will be going.
- SUPER FUNDS GAIN 1.1% FOR JULY 2012, AND SOME OPTIMISM RETURNS. Click on the link below to find out more.
- WHO CAN MAKE TAX-DEDUCTIBLE SUPER CONTRIBUTIONS? If you’re self-employed or not employed or satisfy a special test, you can claim a tax deduction for your super contributions. We have received an unusually high number of emails requesting information on tax-deductible contributions. Click on the article link below, and check out our batch of Q&As on the topic.
- LIFE INSURANCE AND SUPER: 10 THINGS YOU SHOULD KNOW. Life insurance is a hot topic at the moment with nearly every Australian receiving life insurance cover from their super funds, and SMSF trustees now required to consider taking up life insurance. Click on the link below.
- AGE PENSION CHANGES. The Age Pension rates will change in September and we will have all of the details in the SEPTEMBER 2012 newsletter, and of course the latest news and tips on super.
Thanks again for your support and interest in SuperGuide.
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Read this article to discover the new rules in place for SMSF trustees, and discover what you can do to ensure your SMSF operates within the super laws. Read more
The majority of Australians will need nowhere near $2 million in today’s dollars to have a comfortable retirement, but a significant minority of Australians are planning for (or at least hoping for) such a retirement lifestyle. In this article, I will be doing the numbers for those wanting a particularly cushy retirement and who are aiming to have an enticing $2 million in retirement. I have chosen $2 million because the ASIC MoneySmart retirement planner calculator allows for lump sums of up to $2 million. Read more
The median superannuation growth fund gained 1.1% in value for the month of July, due mainly to the gains associated with Australian shares and listed property trusts (REITs), according to rating company Chant West. Read more
Q: I am self-employed and I have never made super contributions in my life. Am I eligible to make super contributions, and can I claim a tax deduction for those super contributions? Read more
Q&As (Making super contributions)
REVAMPED WEALTH ARTICLES (investments at 5%, or 7%)
The most popular question about superannuation and retirement planning is, without doubt: How much money is enough? A glib response to this question may be: Enough money for what? From the many times, though, that I’ve been asked this question, I know that when most Australians ask it, they really want to discover the answer to: How much money do I need to maintain (or improve) the lifestyle I currently have until the day I die? For some Australians, the question also includes: ‘And to leave enough money to help my family after I’ve gone?’. Read more
Q: Does a co-contribution received after using up the total bring forward cap of $450,000 mean that an excess contribution has been made, or is the Government co-contribution excluded from the after-tax contribution cap? Read more