Income tax cuts, super changes, comparing super funds in 8 steps, free advice, SMSF Q&As
Highlights of the NOVEMBER 2016 newsletter include:
- INCOME TAX CUT FOR 2016/2017 YEAR, AND FOR 2017/2018 YEAR. Income tax cut for those earning more than $80,000. Further, from the 2017/2018 financial year, those Australians with a taxable income of more than $180,000 will receive another tax cut.
- SUMMARY: 2016 FEDERAL BUDGET SUPERANNUATION CHANGES SET TO BECOME LAW. Superannuation changes have now passed both houses of parliament, and the relevant bills are now awaiting royal assent. See link below for a summary of all changes, which includes links to articles explaining the changes in detail.
- SUPERANNUATION: 10 GREAT BENEFITS YOU MAY NOT KNOW ABOUT. Super offers lots of little-known benefits for super fund members. See link below to find out more.
- REPAY DEBTS WITH SUPER: THEN CLAIM AGE PENSION. A reader asks whether he can pay his superannuation into his mortgage, live off his private savings and then receive the Age Pension? See link below to find out the answer.
- NO TAX IN RETIREMENT BECAUSE YOU SAPTO. If you are aged 65 years or over, you may be eligible for the Seniors & Pensioners Tax Offset (SAPTO). See link below.
- COMPARING SUPER FUNDS IN 8 STEPS. We have updated this very popular article. In related articles, discover the best super funds, the different types of funds available, and how to benchmark investment returns.
- FIVE SMSF PUBLICATIONS – FOR FREE! See link below for more info. In other SMSF articles, find out how the proportioning rule works, what happens when you take a lump sum, and returning to work after starting a SMSF pension.
- ARE YOU DEALING WITH DIVORCE, DEATH OR DISCRIMINATION? Check out our 3 articles explaining divorce and super, what happens to your super benefits after you die, and the super rights of same-sex couples.
Note: You can find these articles, and more, by clicking on the links below.
Many thanks for your continuing support and interest in SuperGuide.
SUPERANNUATION AND TAX CHANGES
If you earn more than $80,000 a year, you will pay less tax from the 2016/2017 year, and if you earn more than $180,000, expect to pay less tax from the 2017/2018 year. Read more
This article is regularly updated reflecting the latest information available on the superannuation changes announced in the 2016 Federal Budget, and which will mainly take effect from 1 July 2017. The article also provides links to the latest articles explaining specific policies in more detail. Read more
Under the current super rules, making voluntary concessional (before-tax) contributions to a super fund is a complicated business if you work for an employer who won’t let you salary sacrifice super contributions, or your work arrangements include both work as an employee, and work as a self-employed person. Read more
Besides being a great way to save for retirement, superannuation offers lots of little-known benefits for super fund members. Depending on the type of fund you belong to, and your employment status, there is a swag of benefits you may be receiving without even knowing it. Read more
Q: I have read about the changes to the Age Pension assets test taking effect from January 2017. My question is, can I pay my superannuation into my mortgage, live off my private savings and then receive the Age Pension when I turn 65? My age pension age is 65, because I was born in June 1952. 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. Read more
Both self-funded retirees and Age Pensioners can be eligible for SAPTO. You are eligible for SAPTO if you have reached a certain age (Age Pension age), your income is below a certain threshold (see table in article), and you satisfy Age Pension residency requirements (live in Australia and have been an Australian resident for at least 10 years). Read more
The median superannuation growth fund lost 0.7% in value during the month of October 2016, but has delivered 2.4% for the first 4 months of the 2016/2017 financial year, according to rating company, Chant West. Read more
A handy first stop in your retirement planning journey is to attend a free seminar run by the Financial Information Service (FIS), or book a free one-hour appointment with one of the FIS officers. You can talk to FIS representatives over the telephone or face-to-face. Read more
Every week I receive emails from readers searching for qualified and independent financial advisers, and many of these readers share with me the difficulties they face as consumers locating an adviser who can legally claim they are independent. Read more
COMPARING SUPER FUNDS
We receive many questions from readers asking about particular superannuation funds and whether we think fund A or fund B is a good super fund. We are an information site, rather than advisory service so we cannot provide advice on the merits of a particular fund, but we can give you some guidance on how to assess whether a super fund is up to scratch. Read more
Every 6 months, we update this article with the latest performance data on superannuation funds and pension funds, released by 3 rating agencies. Read more
Unless you work in the superannuation industry, how the world of super works can be bamboozling (sometimes it can be confusing even when you know the industry well). This article, on the different types of super funds, helps explains the main players in the Australian super world. Read more
Did you know that since 1 January 2014, your employer’s super contributions may have been going to a new super fund, known as a MySuper product? Did you know that you may end up with one super fund holding your super balance accumulated up to the end of December 2013, and another super fund holding your super savings accumulated from January 2014? And from July 2017, those 2 super accounts may then be combined into the MySuper product? Read more
Q: What you do is very important, thank you. I am 62 years, retired and draw an account-based pension. What I need is to get sound independent advice about whether I am in the best fund for my needs and how my super fund compares. I am considering changing super funds, but I need to know whether the super fund I am considering is secure and strong (as I believe it to be). Read more
More than 1 million Australians run more than 570,000 self-managed super funds controlling a third of the country’s superannuation assets. The team at SuperGuide appreciate how important it is for these 1 million-plus Australians to have current, accurate and comprehensive information on the superannuation rules. 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? Also, if you have a SMSF, how do you do the calculations? Read more
Can I withdraw a lump sum from my accumulation account? Can I withdraw a lump sum from my pension account? Will the pension cease (commute) when I withdraw a lump sum from the pension account? Does the lump sum payment from the pension account count towards the minimum pension payment? How is a superannuation lump sum taxed? 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 have a life insurance policy owned by my SMSF worth approximately $2 million. Currently there is only about $80,000 accumulated in the fund. I am 40 years old. If I die tomorrow is my wife able access an income stream from the fund tax-free? For instance, upon my death if this $2 million was left in the fund generating 5%, will my wife receive the entire $100k per year income without paying tax? Read more
ARE YOU DEALING WITH DIVORCE, DEATH, OR DISCRIMINATION?
Q: I am at the end of a divorce/property settlement. My ex has agreed to give me my share of his super. Does this have to go into a superannuation fund or can he transfer it to me in some other way? And can you please explain how super should be treated when a divorce happens, because it has been very difficult to find any information about this topic. Read more
Although superannuation death benefits are tax-free when paid to individuals considered ‘dependants under the tax laws’, a ‘death tax’ continues to apply when super monies are paid to individuals considered ‘non-dependants under the tax laws’. Read more
Although your relationship may not be equal in the laws of marriage, and in the eyes of some parliamentarians and a minority of Australians, your relationship is definitely considered legitimate and equal, in terms of your superannuation entitlements. Read more