Latest news with #AssociationofSuperannuationFundsofAustralia
The Age
8 hours ago
- Business
- The Age
How much more will the superannuation tax cost you?
The Nationals have vowed to 'fight to the death' to stop Labor's plans to increase tax on big superannuation accounts. The Liberals have claimed the plan delivers special treatment to politicians such as the prime minister who have older defined benefit superannuation. But Treasurer Jim Chalmers has trashed those criticisms, saying it's a 'modest' change aimed at making super more sustainable. The legislation to double the tax rate on earnings from super balances over $3 million from 15 per cent to 30 per cent will be among the first on Labor's agenda when parliament returns in July, but if you're still a bit confused, you're not alone. Below, we show what will happen for Australians who will be hit by the tax – and how much more they'll pay, drawing on calculations by the Association of Superannuation Funds of Australia. With the Coalition set against the change, and Labor needing to secure the support of the Greens to get its bill through, the exact form of the tax is yet to be confirmed. Loading Earnings on all superannuation accounts will continue to be taxed at 15 per cent, but we do not include this in our examples because they require their own set of calculations with changes based on personal circumstances. Our examples just show the extra 15 per cent that will be levied on earnings from accounts over $3 million. But what does all this look like in practice? And how would the tax change affect you? Using four examples, we step through the way the new, additional tax bill would be calculated for a range of people in different occupations and life stages. We only examine the effect of the tax over the first year, and do not look into the number of Australians affected over time.
Sydney Morning Herald
8 hours ago
- Business
- Sydney Morning Herald
How much more will the superannuation tax cost you?
The Nationals have vowed to 'fight to the death' to stop Labor's plans to increase tax on big superannuation accounts. The Liberals have claimed the plan delivers special treatment to politicians such as the prime minister who have older defined benefit superannuation. But Treasurer Jim Chalmers has trashed those criticisms, saying it's a 'modest' change aimed at making super more sustainable. The legislation to double the tax rate on earnings from super balances over $3 million from 15 per cent to 30 per cent will be among the first on Labor's agenda when parliament returns in July, but if you're still a bit confused, you're not alone. Below, we show what will happen for Australians who will be hit by the tax – and how much more they'll pay, drawing on calculations by the Association of Superannuation Funds of Australia. With the Coalition set against the change, and Labor needing to secure the support of the Greens to get its bill through, the exact form of the tax is yet to be confirmed. Loading Earnings on all superannuation accounts will continue to be taxed at 15 per cent, but we do not include this in our examples because they require their own set of calculations with changes based on personal circumstances. Our examples just show the extra 15 per cent that will be levied on earnings from accounts over $3 million. But what does all this look like in practice? And how would the tax change affect you? Using four examples, we step through the way the new, additional tax bill would be calculated for a range of people in different occupations and life stages. We only examine the effect of the tax over the first year, and do not look into the number of Australians affected over time.
Yahoo
29-05-2025
- Business
- Yahoo
Major superannuation change to give Aussie workers $600,000 boost in weeks
Compulsory superannuation payments will increase in the coming weeks, and the boost will help young Australians retire with nest eggs of more than $600,000. This is nearly triple what some people are retiring with today. The super guarantee rate will increase from 11.5 to 12 per cent from July 1. This is the final legislated increase to the rate that employers are legally required to pay into your superannuation. A 30-year-old with a super balance of $30,000 today who earns the median wage of $75,000 is expected to accumulate a super balance of $610,000 in today's dollars, new research from the Association of Superannuation Funds of Australia (ASFA) found. RELATED $3 million superannuation tax change sparks property warning as 'panic' selling begins $1,831 Centrelink payment change coming within weeks: 'You'll get more' Australia's most in-demand jobs revealed with $125,000 salaries up for grabs: 'Short supply' Compared to previous generations, today's workers will benefit from higher compulsory contributions rates for longer periods of time. The median super balance for 60- to 64-year-old men today is $205,000, while for women in the same age bracket it is $154,000. ASFA found there was strong support for superannuation from younger Australians, despite them being decades away from retirement. It found 77 per cent of the 18 to 34 age bracket believed the compulsory contribution rate should be at least 12 per cent, while 82 per cent agreed or strongly agreed that regular contributions made them feel more confident about their financial future. 'The strong level of satisfaction, trust and confidence younger people feel about their super is encouraging to see as superannuation is often not front-of-mind for younger people,' ASFA CEO Mary Delahunty said. 'This result demonstrates that younger Australians are engaged with superannuation and well aware of its positive contribution in shaping their financial security in retirement.' To achieve a comfortable retirement, ASFA calculated that a single person needs $595,000 in superannuation, while a couple needs $690,000. These figures assume the retiree draws down all their capital and receives a part Age Pension. Super Consumers Australia has calculated Aussies need less in superannuation to retire, with its targets finding a single person needs around $310,000 and a couple around $420,000. ASFA noted that the contribution rate of 12 per cent wouldn't, in itself, guarantee adequate retirement incomes for today's younger workers. Factors like time out of the workforce to have and raise children, along with working in jobs not covered by the compulsory system, like gig economy work, would impact a person's capacity to build up their savings. The super guarantee rate increase to 12 per cent is just one change kicking in from July 1. Superannuation accounts with balances of $3 million or more will see the existing tax rate increase from 15 to 30 per cent on earnings above this threshold, including unrealised capital gains. This change is due to come into effect from July 1 but hasn't yet been legislated. Superannuation will start being paid on Parental Leave Pay from the new financial year. This means parents getting the government support will get an extra 12 per cent of their payment as a contribution to their super fund. The transfer balance cap, which limits the amount of super that can be transferred into the retirement phase, will increase by $100,000 from $1.9 million to $2 million. There has been some misinformation about changes to preservation and withdrawal rules, but the ATO has assured people that this is in retrieving data Sign in to access your portfolio Error in retrieving data
Sydney Morning Herald
03-05-2025
- Business
- Sydney Morning Herald
When retirement doesn't mean giving up work
Real Money, a free weekly newsletter giving expert tips on how to save, invest and make the most of your money, is sent every Sunday. You're reading an excerpt − sign up to get the whole newsletter in your inbox. In eons past (the late 20th century), the word 'retirement' had a sort of mythos around it, one associated with triumphantly handing in your four weeks' notice and immediately booking a long relaxing holiday, never to think about your job or annoying colleagues again. Since then, a few things have changed. Firstly, we're all living longer – in 1992 life expectancy was 74 years for males and 80 years for females, where today it's 81 and 85 respectively. Secondly, our jobs have got better. Admittedly, this is more of a vibes-based thing than cold, hard data from the ABS, but our quality of life at work has greatly improved in the past few decades. It also helps that we're not working down the coal mines or on the railroads or whatever people did in the dark ages (the late 20th century ). What's the problem? What this means is that retirement is now less about never working again and more about finding a bit of a balance. This has seen the increasing popularity of things such as Transition to Retirement pensions (which allow you to reduce your working hours and start drawing down on your super to make up for lost income), but it also means more people of retirement age are maintaining some form of work. This could be part-time at your existing job, or a completely new role. In fact, an estimated 33 per cent of people aged 65 to 69 are either employed or actively seeking work, according to a survey by the Association of Superannuation Funds of Australia. Loading What you can do about it So if you're in, or nearing, retirement, but aren't quite ready to give up work entirely, here's what you need to know: What happens to your super? To start accessing your super, you need to either have reached your preservation age (typically 60) and retired, or turned 65, at which you can start drawing down on your super even if you haven't retired. But what about if you start accessing your super, and then decide you want to start working again? Thankfully, that's not an issue, says wealth management director at HLB Mann Judd, Prue Cheeseman-Goodes. 'If the funds have been transferred into a pension account where you are accessing them (i.e. not just lump sum withdrawals from accumulation), they will remain in that pension account and continue to be accessed in the same way going forward, as you have already met the condition of release for these funds,' she says. However, Cheeseman-Goodes notes if you're under 65, you will need to meet your conditions of release again (i.e. retire from your job) to access super contributions made into an accumulation account by your new employer. What about the age pension? This one is less good news, as any increase in income due to returning to work would likely mean a reduction in your pension entitlement, though its worth noting you need to be 67 to be eligible for the age pension. Cheeseman-Goodes says it's important to keep Centrelink updated with any change in your earning situation, and notes that the Work Bonus can help retirees earn some income without putting too big a dent in their age pension. 'You can earn up to $300 per fortnight from employment income without it being counted towards the income test,' she says. 'Unused amounts accumulate in a Work Bonus income bank each fortnight, up to a maximum credit of $11,800, which can be used to offset future employment income.' How about tax? Director of wealth at BlueRock, Daniel Zaffino, says while your super income stream is tax-free, any income you earn from additional work will be taxed at your marginal rate. The good news is that you don't need to lodge a tax return if your income is below the $18,200 tax-free threshold. However, if your earnings are below that threshold and you've paid tax on them, you may need to file a tax return to receive a refund on that amount. Anything else? Returning to work could require you to re-think what insurances you have, Cheeseman-Goodes says. 'You might consider if you want private health cover since you might have to pay the Medicare levy surcharge if you don't hold it,' she says. 'It is also worthwhile to check your life or TPD (total and permanent disability) cover through super – if it's still active or needed.'
The Age
03-05-2025
- Business
- The Age
When retirement doesn't mean giving up work
Real Money, a free weekly newsletter giving expert tips on how to save, invest and make the most of your money, is sent every Sunday. You're reading an excerpt − sign up to get the whole newsletter in your inbox. In eons past (the late 20th century), the word 'retirement' had a sort of mythos around it, one associated with triumphantly handing in your four weeks' notice and immediately booking a long relaxing holiday, never to think about your job or annoying colleagues again. Since then, a few things have changed. Firstly, we're all living longer – in 1992 life expectancy was 74 years for males and 80 years for females, where today it's 81 and 85 respectively. Secondly, our jobs have got better. Admittedly, this is more of a vibes-based thing than cold, hard data from the ABS, but our quality of life at work has greatly improved in the past few decades. It also helps that we're not working down the coal mines or on the railroads or whatever people did in the dark ages (the late 20th century ). What's the problem? What this means is that retirement is now less about never working again and more about finding a bit of a balance. This has seen the increasing popularity of things such as Transition to Retirement pensions (which allow you to reduce your working hours and start drawing down on your super to make up for lost income), but it also means more people of retirement age are maintaining some form of work. This could be part-time at your existing job, or a completely new role. In fact, an estimated 33 per cent of people aged 65 to 69 are either employed or actively seeking work, according to a survey by the Association of Superannuation Funds of Australia. Loading What you can do about it So if you're in, or nearing, retirement, but aren't quite ready to give up work entirely, here's what you need to know: What happens to your super? To start accessing your super, you need to either have reached your preservation age (typically 60) and retired, or turned 65, at which you can start drawing down on your super even if you haven't retired. But what about if you start accessing your super, and then decide you want to start working again? Thankfully, that's not an issue, says wealth management director at HLB Mann Judd, Prue Cheeseman-Goodes. 'If the funds have been transferred into a pension account where you are accessing them (i.e. not just lump sum withdrawals from accumulation), they will remain in that pension account and continue to be accessed in the same way going forward, as you have already met the condition of release for these funds,' she says. However, Cheeseman-Goodes notes if you're under 65, you will need to meet your conditions of release again (i.e. retire from your job) to access super contributions made into an accumulation account by your new employer. What about the age pension? This one is less good news, as any increase in income due to returning to work would likely mean a reduction in your pension entitlement, though its worth noting you need to be 67 to be eligible for the age pension. Cheeseman-Goodes says it's important to keep Centrelink updated with any change in your earning situation, and notes that the Work Bonus can help retirees earn some income without putting too big a dent in their age pension. 'You can earn up to $300 per fortnight from employment income without it being counted towards the income test,' she says. 'Unused amounts accumulate in a Work Bonus income bank each fortnight, up to a maximum credit of $11,800, which can be used to offset future employment income.' How about tax? Director of wealth at BlueRock, Daniel Zaffino, says while your super income stream is tax-free, any income you earn from additional work will be taxed at your marginal rate. The good news is that you don't need to lodge a tax return if your income is below the $18,200 tax-free threshold. However, if your earnings are below that threshold and you've paid tax on them, you may need to file a tax return to receive a refund on that amount. Anything else? Returning to work could require you to re-think what insurances you have, Cheeseman-Goodes says. 'You might consider if you want private health cover since you might have to pay the Medicare levy surcharge if you don't hold it,' she says. 'It is also worthwhile to check your life or TPD (total and permanent disability) cover through super – if it's still active or needed.'
