Crazy cap talk, SMSF Pension Guide, $1 million opportunity, why women must save more super, Age Pension change, special over-50s contributions cap and more
Welcome to the December 2015 edition of SuperGuide. The highlights of the final edition for 2015 are:
- WHY WOMEN HAVE TO SAVE MORE SUPER, AND WHY POLLIES SHOULD CARE. I am becoming increasingly alarmed by the predominantly male decision-makers in politics and super, obsessing about the tax treatment of the comparatively wealthier older male retirees, while largely ignoring the vast majority of underfunded retirees and future retirees who are predominantly women.
- WHY A $11,000 CONTRIBUTIONS CAP IS A SILLY IDEA. Believe it or not, the fanciful suggestion of a $11,000 annual limit on concessional contributions came out of a think tank. Click on the link below to find out why the Grattan Institute thinks this could the solution to Australia’s budgetary problems, and why I think the Grattan team need a refresher on super and retirement policy.
- A QUICK SUMMARY: 2015/2016 MID-YEAR ECONOMIC AND FISCAL OUTLOOK (MYEFO). Find out what the government is spending your taxes on, and why they are spending more than they should.
- SMSF PENSION GUIDE: ATO’S 20 TOP TIPS. We have created this valuable guide to assist those readers running SMSF pensions, and for anyone considering starting a SMSF pension.
- SUPER CONTRIBUTIONS: $1 MILLION-PLUS OPPORTUNITY. Despite the urging from unofficial sources that contributions caps should be cut, Australians still have lots of opportunities when making super contributions during the 2015/2016 financial year, and future financial years.
- TEMPORARY HIGHER CONCESSIONAL CONTRIBUTIONS CAP APPLIES TO OVER-50s. See link below.
- BROKEN PROMISE? GOVERNMENT FAILS TO CUT SMSF ATO LEVY. Due to several SMSF-related measures not proceeding under the new government, the government promised to review the ATO SMSF levy. Failure to reduce the levy is closer to super theft, rather than simply a broken promise.
- SUPER ALERT! AGE PENSION INCOME TEST CHANGE HITS FUNDED DEFINED BENEFIT PENSIONS. If you have this type of super pension, then this article is essential reading.
Note: You can find these articles, and more, by clicking on the links below.
Expect a holiday edition of SuperGuide newsletter to arrive in your inbox in late-January 2016, reporting on super fund performance for the 2015 calendar year, along with other helpful articles to help your super plans for the 2016 year. (November 2015 investment performance results are not yet available, but will be published on the website next week.)
Many thanks for your support and interest in SuperGuide throughout the year, and over the past 7 years. Since launching in January 2009, we have had more than 10 million visits to the website, and 2.7 million visits so far this year. More than 22,000 subscribers receive this newsletter, although our figures tell us that our subscribers share our newsletter with many thousands more.
On behalf of the SuperGuide team, I wish you a safe and enjoyable holiday season, and a prosperous 2016.
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MORE SUPER SCUTTLEBUTT
Many of the superannuation policies ignore the unique life circumstances faced by half of the country’s population, thanks largely to a parliament run by male politicians who are remote from the day-to-day demands of a typical family, and due to a superannuation industry leadership and trustee boards of superannuation funds which are not generationally equipped to tackle the next fundamental change necessary to the super rules. Read more
The federal government, various think tanks and business groups are obsessed with superannuation tax concessions and the need to fix the budget by cutting those super tax concessions. While the tax tango continues, we also need the government and the super industry to become obsessed with the bigger problem of substantial underfunding for retirement, for the majority of the population. Read more
Two years ago, in December 2013, the newly-elected Liberal government promised to review the amount of the ATO SMSF levy. At $259 a year, the SMSF ATO supervisory levy had more than quintupled in the 7 years from the 2007/2008 year when only $45 a year was payable. Read more
On 15 December 2015, the federal government released the 2015/2016 Mid-Year Economic and Fiscal Outlook (MYEFO), which was jointly presented by federal treasurer, Scott Morrison and minister of finance, Mathias Cormann. Speaking to the media and to the public, the ministers announced that the government’s plan for the nation’s finances is straightforward: “…responsibly restrain expenditure while supporting economic growth to lift revenues”. Read more
Despite the urging from unofficial sources thatcontributions caps should be cut, Australians still have a fair amount of flexibility when making super contributions during the 2015/2016 financial year, and future financial years. The financial year runs from July 2015 through to June 2016. Read more
In July 2013, the federal government introduced a temporary concessional contributions cap of $35,000 for over-60s, which was then expanded to 50-somethings from July 2014. Read more
We have created this valuable guide to assist those readers running SMSF pensions, or for any reader considering starting a SMSF pension. Read more
Effective from 1 January 2016, the level of income received from a funded defined benefit super pension, and that can be excluded from the Age Pension income test, will be capped at 10%. Read more
When you start a superannuation account-based pension, you must withdraw a minimum amount each financial year (July 2015 to June 2016) to secure a tax exemption for the investment earnings on the fund assets financing your super pension. Read more
Q: I’ve just turned 58, and I’m thinking of retiring before I turn 60. I would like to know whether I would have to pay tax on my superannuation. I know that after I turn 60, it’s tax-free, so my inquiry is regarding the period until I turn 60. Between now and when I turn 60, will I be subject to any tax on any super money I receive, namely, tax on the lump sum, or tax on pension income, or tax on pensions earnings from the super in my super account? Read more
Q: I turn 60 in May 2016. Is the compulsory 4% drawdown from my super pension treated on a pro-rata basis for my tax return for the 2015/2016 year, or can I draw it down after May 2016 rendering my super income after 60, and then tax-free? Read more
Q: My wife is 58 and retired and she has her own self-managed super fund, where she has rolled over her super funds from various employers. She plans to start her SMSFpension soon. After starting her pension, could she also start another SMSF fund? Read more
Q: I have come across a statement which refers to a proportioning rule. Could you please explain to me exactly what the proportioning rule is, who it applies to and when it applies, and how you do the calculations for a SMSF? Read more
Q: We have a SMSF with two members, both members having accumulation accounts and pensions. We understand that when you draw down pension amounts, the drawdown amount reduces the pension balance in accordance with the pre-existing tax-free component/taxable component, and any super contributions you make go into the separate accumulation account. We also know that when a member permanently retires and is over 65, a member can draw down the full balances of both the accumulation and pension amount in full. Read more
Q: I have my own super fund and when it came to the end of the year I was supposed to withdraw $11,000. I only withdrew $6000 and I can catch up this year. Is this a reportable breach to the Tax Office? Read more