Contribution caps frozen, SG for over-70s, co-contribution halved, bring-forward snags, Trish Power’s latest book (special offer)
Welcome to the NOVEMBER 2011 edition of SuperGuide newsletter, a free and independent source of superannuation information for consumers. The highlights of the NOVEMBER 2011 SuperGuide newsletter are:
- SWAN ATTACK! FREEZE CONTRIBUTIONS CAPS, HALVE CO-CONTRIBUTIONS AND HIT LOW-INCOME EARNERS. In an attempt to protect the 2012/2013 Federal Budget surplus Federal Treasurer Wayne Swan has tinkered with the super rules, yet again. The super spin doesn’t ring true when contributions caps are frozen for the 5th year in a row, and Swan devastates the co-contribution scheme by halving co-contribution payments. Ouch! Click on the article link below for more details.
- WHAT A RELIEF! MINIMUM PENSION PAYMENTS REDUCED BY 25% FOR 2012/2013 YEAR (AS WELL AS 2011/2012 YEAR). Click on the article link below to find out more.
- SG TO BE PAID FOR OVER-70s FROM JULY 2013. Great news and an issue that SuperGuide has been pushing since we launched 3 years ago. Click on the link below for more details.
- BRING-FORWARD RULES: 10 FACTS YOU SHOULD KNOW, and Q&As. I receive a lot of questions from readers seeking information about how the non-concessional (after-tax) super contributions rules work; in particular, how the bring-forward rule works. More recently I have received several emails from readers who have fallen foul of the bring-forward rules and received excess contributions tax assessments from the Australian Tax Office. This article is handy guide for those considering making substantial non-concessional contributions. I have also included some of our most popular Q&As on the topic. Click on the article links below for more.
- CONCESSION CARDS: AM I ELIGIBLE AND WHAT ENTITLEMENTS CAN I EXPECT? Courtesy of the Financial Information Service, you can check out a summary of what concession cards are available for older Australians, and what discounts are available. Click on the article link for more details.
- SUPER FUNDS GAIN 3.1% FOR OCTOBER 2011 (BUT LOSE 2.4% FOR YEAR TO DATE). The median superannuation growth fund gained 3.1% of value for the month of October, although is still in the red for the financial year to date (that is 4 months, from July 2011 through to 31 October 2011), according to rating company Chant West. Click on the article link below to find out more.
- HOW MUCH SUPER IS ENOUGH? (UPDATED LIFESTYLE ARTICLES). In these volatile times, how much do you need for a comfortable retirement? I have updated our suite of articles on ‘how much is enough?’ in response to the release of the latest lifestyle figures. Click on the article links below to find out more.
- SPECIAL OFFER: My latest book, Super Freedom: A woman’s guide to superannuation is now available. As a special offer to SuperGuide readers, I will autograph all copies of Super Freedom purchased from our online bookshop (managed by bookstore Educated Investor). Catering for the Christmas rush and delivery times, this special offer closes on 16 December 2011. Allow several days for delivery. Click on the book link on the right hand side of the website, or click on the first article link below to find out more information, or to order the book
DECEMBER SPECIAL: Due to the shock super announcement by Federal Treasurer Wayne Swan, we have held back a selection of additional Q&As. We have decided to publish a bonus edition in December , which means we will be publishing two newsletters in December. The first edition will be a Q&A special and the second edition will be a CHRISTMAS edition and the last SuperGuide newsletter for the year.
If you like this newsletter and our website, then please pass on the newsletter to your friends. Also, you can follow us on Twitter, or you may prefer to become a SuperGuide fan on Facebook, or do both. Thanks again for your support and interest in SuperGuide.
Trish Power
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THE SOAPBOX
Swan attack – freeze contributions caps and halve co-contributions
In an attempt to protect the 2012/2013 Federal Budget surplus which was promised after the Global Financial Crisis savaged world economies, and then re-promised in the May 2011 Budget, Federal Treasurer Wayne Swan has tinkered with the super rules, yet again. Read more
FEATURES
What a relief! Minimum pension payments reduced by 25% for 2011/2012 and 2012/2013 years
The Government has announced that pension payment relief will be available for the 2012/2013 year as well as for the 2011/2012 financial year. This is great news for retirees suffering through the poor-performing sharemarkets but I had hoped that Australians still recovering from the Global Financial Crisis would receive the 50% drawdown relief on account-based pension minimum payments that they had received for the previous 3 years. I had also hoped the Federal Government would have increased the 25% relief to 50% relief for the 2011/2012 in light of the shocking investment markets this financial year. Read more
SG to be paid for over-70s from July 2013
SuperGuide is proud to announce that our regular reporting of unfair treatment of older workers has contributed to a win for Australians choosing to work into their seventies and even into their eighties. From 2013, eligible employees who are 70 years or older will receive Superannuation Guarantee (SG) payments from employers. The current SG rules stop SG entitlements when an employee turns 70 years of age. Read more
Bring forward rule: 10 facts you should know
I receive a lot of questions from readers seeking information about how the non-concessional (after-tax) super contributions rules work; in particular, how the bring-forward rule works. More recently I have received several emails from readers who have fallen foul of the bring-forward rules and received excess contributions tax statements from the Australian Tax Office. Read more
Concession cards: Am I eligible and what entitlements can I expect?
At SuperGuide, we receive many questions from readers asking about the concession cards available for older Australians, in particular, the Commonwealth Seniors Health Card (CSHC), the Pensioner Concession Card, and sometimes the Low Income Health Card. Read more
Super funds gain 3.1% for October 2011 (but lose 2.4% for year to date)
The median superannuation growth fund gained 3.1% in value for the month of October, although still sitting on a loss of 2.4% for the financial year to date (that is 4 months, from July 2011 through to 31 October 2011), according to rating company Chant West. Read more
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DON’T GET TRIPPED UP BY THE BRING-FORWARD RULE
Beef up your super using a bring forward
Q: Under the 2-year bring-forward of non-concessional contributions, if a person makes a contribution of $150,001 when age 64, he can continue to contribute the balance of the $450,000 anytime during the next 2 years without having to satisfying the work test, is that right? Read more
Turning 65: Maxing out the after-tax contributions cap
Q: If you turn 65 and retire after 1 July 2011, can you still make the $450,000 bring-forward non-concessional contribution as long as you make the contribution before 30 June 2012? Or do you have to satisfy the work test to do so? Read more
Super contributions: Turning 65 part-way through the year
Q: Thanks for your website and advice. Just a quick question: I turn 65 in January 2012. So I am 64 years of age for a large part of the 2011/2012 financial year, but of course I turn 65 during the 2011/2012 financial year, that is, in January 2012. My understanding is that because I am under 65 for part of the 2011/2012 financial year then I can exercise the bring forward provisions and make non-concessional contributions up to $450,000 before I turn 65, if I choose to do so. Is this correct? Read more
UPDATED LIFESTYLE FIGURES
A comfortable retirement: How much super is enough?
So, the big question is: how much money do you really need for your retirement? Lifestyle is a very personal thing —luxury living for one person is a modest existence for someone else. I don’t intend to suggest the exact lifestyle you must choose for your retirement years but I can offer you some guidance on the amount of money you need if you want to cover your basic living costs and support a hobby or active social life. For example, do you expect to take frequent holidays and are you planning to enjoy regular glasses of wine or beer? Read more
Setting a retirement target: Living on more than $55,000
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
Moving targets: Come on, how much super do I really need?
You’re thinking about your retirement and worried about whether you’ll have enough money to live the life you want, or perhaps you’re more worried about not having enough money to even live the life you don’t want! Uncertainty can create a lot of stress, and doing some research (see article Retirement planning in six steps) can often allay many of your fears even if your financial situation is not as strong as you hoped. Read more
