Shorten’s scorecard, 10 more ways to boost super, salary sacrifice, transition-to-retirement pensions, SMSFs, Q&As
Welcome to the final edition of SuperGuide for 2012.
The highlights of this bumper DECEMBER 2012 edition of SuperGuide newsletter are:
- SHORTEN’S SUPER SCORECARD: HITS AND MISSES ON HIS TO-DO LIST. Two years ago, not long after Bill Shorten was appointed Assistant Treasurer and Minister for Financial Services and Superannuation, SuperGuide wrote an open letter to the Minister (published in September 2010) providing him with a superannuation (and retirement) to-do list. We have now scored him on his super promises from 2 years ago. Did he pass, or did he fail? Click on the article link below to find out the answer.
- SUPERGUIDE CHECKLIST: 10 MORE WAYS TO BOOST YOUR SUPER. This article is the second in a series of special articles that SuperGuide will be publishing, designed to help SuperGuide readers more easily access the hundreds of questions and articles. Click on the link below to discover 10 more ways to boost your super.
- SUPER TAX ALERT! HAVE YOU COUNTED YOUR SUPER CONTRIBUTIONS LATELY? Now is the time to count your super contributions, if you want to ensure that you don’t exceed your contributions caps. Tens of thousands of Australians are expected to receive penalty tax notices for exceeding the concessional (before-tax) contributions cap. Click on the link below to find out how many Australians are affected, and what you can do about it.
- SALARY SACRIFICING AND SUPER: 10 FACTS YOU SHOULD KNOW. Making voluntary concessional super contributions remains a popular strategy but you need to follow the rules. Click on the link below to explore the possibilities of salary sacrificing.
- A CASE STUDY: I’M 53. IS IT TOO LATE TO SAVE FOR MY RETIREMENT? (UPDATED DATA) We have updated a very popular case study for the late-starters. By putting $100 a week into super from now on, Betty can enjoy a retirement lifestyle better than the one she enjoys now. Click on the link below to find out how.
- SUPERANNUATION INCREASES TO 12%, EVENTUALLY. Saving for retirement is going to get a lot easier. Effective from 1 July 2013, the Superannuation Guarantee percentage will increase to 9.25%, and will eventually rise to 12% by July 2019. Click on the link below to find out more.
- TRIPS: 10 INTERESTING FACTS ABOUT TRANSITION-TO-RETIREMENT PENSIONS, AND UPDATED CASE STUDIES. A TRIP enables any Australian, aged 55 or over, to access his or her superannuation benefits in the form of a pension without retiring or satisfying another condition of release. Click on the article links below to find out what you need know about starting a TRIP, and how TRIPs work (with 3 updated case studies).
- TAX-FREE SUPER FOR OVER-60s REMAINS IN PLACE. There has been a lot of scaremongering in the media about the federal government clawing back promised tax concessions from superannuation fund members, although this has not occurred. Fortunately, tax-free super for over-60s remains in place. Click on the article link below for the tax-free super bonanza for over-60s. If you don’t want to wait until you turn 60 to access your super savings, the check out our article on the tax deal for taking super before the age of 60.
- SMSF PENSIONS. Click on the article links below to find out how to start a SMSF pension, how to run a SMSF pension while also making super contributions and what happens to your pension if you return to work.
- REMINDER: INSPECTOR-GENERAL OF TAXATION SEEKS YOUR FEEDBACK ON EXCESS CONTRIBUTIONS TAX REGIME. Further to the email you received last week: Deadline is 18 December 2012 so you better get cracking if you’re planning to make a submission. Click on the link below to find out how you can make a difference.
You can find these features and Q&As (including withdrawing super before the age of 60, starting a pension before the age of 60, working beyond the age of 67, and accessing super at age 55 while living overseas) by clicking on the links below.
Thanks again for your support and interest in SuperGuide. Our next newsletter will be emailed in February 2013.
I wish you a safe and enjoyable holiday season, and a prosperous 2013.
Two years ago, not long after Bill Shorten was appointed Assistant Treasurer and Minister for Financial Services and Superannuation, SuperGuide wrote an open letter to the Minister (published in September 2010) providing him with a superannuation (and retirement) to-do list. We have now scored Mr. Shorten on his to-do list. Did he pass or fail and what does he still have left to do? Read more
Further to our email last week, the Inspector-General of Taxation (IGT) is investigating the ATO’s administration of the excess contributions tax (ECT) regime and its compliance approach when dealing with taxpayers who exceed their contributions caps. The IGT is taking submissions but those submissions must be lodged by 18 DECEMBER 2012. Read more
This article is the second in a series of special articles that SuperGuide will be publishing, designed to help SuperGuide readers more easily access the hundreds of questions and articles that we have published on the SuperGuide website. The first article in the series is ‘Super Checklist: 10 ways to save your super’, which was published in November 2012. Read more
This updated article is a must-read if you make contributions to a super fund, in addition to your employer’s compulsory Superannuation Guarantee contributions. If you have a salary sacrifice arrangement in place then you will need to check how much, and when, these additional concessional contributions are paid into your super account, and whether such an arrangement means that you may exceed your concessional contributions cap. Read more
Salary sacrificing, by making before-tax superannuation contributions, is a popular strategy for employees on middle-to-high incomes. The deal is that you increase your superannuation balance (and pay 15% contributions tax) while reducing the amount of income tax payable (up to 46.5%) on your salary or wages. Read more
Q: I am 53 years old. I do not contribute to super and I have never been a saver. I have just paid off my unit. My question is: I earn only $37,000 a year, so I have never had a highly paid job. Is it too late for me to save some money via my work super fund and how much should I be putting into it to make it count? I guess I would still be working for another 10 years. Read more
Effective from 1 July 2013, the Superannuation Guarantee percentage will increase to 9.25%, and will eventually rise to 12% by July 2019. Superannuation Guarantee (SG) is the official term for compulsory superannuation contributions made by employers on behalf of their employees. An employer, regardless of whether they are a small or large business, must currently contribute the equivalent of 9% of an employee’s salary. Read more
Although there has been a lot of scaremongering in the media about the federal government clawing back promised tax concessions from superannuation fund members, this has not occurred. Tax-free super for over-60s remains in place – thank goodness! Read more
When you retire early, you’re going to have to make a few decisions. The tax implications of your retiring before the age of 60 can depend on whether you take your super as a lump sum and/or income stream. Are you taking your super as a lump sum, an income stream or a combination of both? Read more
TRANSITION-TO-RETIREMENT PENSIONS (TRIPs)
Since the concessional contributions cap was halved to $25,000 for over-50s (announced in May 2012, and effective from July 2012), anyone using the popular transition-to-retirement pension/salary sacrifice strategy, or considering using such a strategy, will need to review this strategy, and/or seek taxation advice on the merits of such a strategy for your personal circumstances. I explain this strategy in this article. Read more
A transition-to-retirement pension (TRIP) enables any Australian, aged 55 or over, to access his or her superannuation benefits in the form of a pension (income stream) without retiring or satisfying another condition of release. Using 3 case studies, this article illustrates how a TRIP can operate in practice. Read more
Question: Your site says: “By starting a TRIP, you don’t have to retire to withdraw your super benefits. You can work part-time or full-time or even casually.” But on the TRIP form I have from my super fund it says I have to be permanently retired or be working part time. Which is correct? I can’t see any reference on the ATO site to a need to be working part time. So can I continue working full-time and still do TRIPs? Read more
SELF-MANAGED SUPER FUNDS (SMSFs)
Q: How do you change your self-managed super fund (SMSF) from accumulation phase to pension phase (husband aged 60, and retired) and transition-to-retirement pension phase (myself aged 57 and still working part time)? If an accountant has to do it, what costs could be involved? Your site has been a great help in understanding things we didn’t know, thank you very much. Read more
Q: I am 62 years of age and retired. I have recently commenced an account-based pension from my SMSF. Can I still make non-concessional contributions to that fund? Read more
Q: My husband turns 57 in January. We have a SMSF and he is going to commence pension phase. He is essentially retired and only worked 4 hours this financial year. But what if he decides to work again in six months’ time? The account-based pension allows for lump sum withdrawals which is very advantageous and would be our first choice as it gives more flexibility. My question is, which pension do we set up when he doesn’t know whether he will work again? What happens if you are drawing down an account-based pension and then you work? Read more
Q: I will be 60 in March 2013. Is the compulsory 3% drawdown from my super pension treated on a pro-rata basis for my tax return for the 2012/2013 year, or can I draw it down after March 2013 rendering my super income after 60, tax-free? Read more
Q: I am 60. I am interested in the condition of release relating to turning 60 and resigning. Is it sufficient to satisfy the ’60 and resign’ condition of release by changing my employment arrangement from full-time to part-time, with the same employer? Read more
Q: Can you please tell me whether I can withdraw my super benefits when I retire at age 58? Read more
Q: I am going to be 67 years-old during 2013 and I am still working as a gardener. I would like to continue in employment for as long as possible. I have about $84,000 in super savings. Can I access $80,000 to put on the mortgage of our house and still continue working? Please let me know if this is possible. Read more
Q: I’m an expat Australian, and I have been living in Singapore for quite a few years. I am 57 and I want to access my superannuation to buy a property. Is that possible? I have no idea if I will retire back in Australia or stay here, but my view is that if I do retire back in Australia, I will sell the property to fund my retirement. Read more