Latest news with #NicoleGardner
Yahoo
17 hours ago
- Business
- Yahoo
ATO superannuation warning as deadline for $30,000 deduction fast approaches
Australians have been warned about a step they need to complete if they want to make voluntary superannuation contributions. Many people have hopped on this trend because these additional payments into your nest egg are tax-deductible. However, you might not be aware that you have to fill out a form to ensure you can still make this deduction at tax time. Financial advisor Nicole Gardner told Yahoo Finance too many people miss this important part. "Sometimes they put the lump sum contribution in and they think, 'Oh, yep, I've done the right thing there. I've got the tax back'. But you actually need to lodge the form," she said. Common tax mistake costing Aussies $1,000 on ATO refund ATO, Centrelink warning over $100 million Powerball lottery win Centrelink cash boost coming from July 1 for millions of Aussies The form you need is the Notice of Intent to Claim (NOI). Filling it out is a relatively straightforward process, and you need a few details handy, such as your Tax File Number, as well as personal and superannuation said if you were planning on making voluntary super contributions before June 30, you have until the end of the next financial year in mid-2026 to lodge the form. If you fail to do that, then you won't be able to claim it as a tax deduction. But, that means if you didn't submit the form for voluntary super contributions last financial year, you only have a few weeks to lodge the NOI before the June 30 deadline. The Stellar Wealth founder and financial advisor explained to Yahoo Finance that lodging the NOI form instructs the Australian Taxation Office (ATO) to treat the contribution as if it came from your pre-tax income. That would mean it would only be hit with a 15 per cent tax compared to your marginal income tax rate, which could be as high as 47 per cent. Gardner said you were able to claim back the difference between that 15 per cent rate and your income tax rate. According to Motley Fool, the average voluntary super contribution for Aussies aged 55 to 59 per year is $5,027. If someone in that 55 to 59 age bracket was on the top tax rate and they failed to lodge the NOI form, they could miss out on a $1,608 tax break for that year alone. The financial advisor said the typical person who doesn't lodge an NOI was someone who does a lump sum payment to their super from their bank account rather than through their accountant or adviser. The ATO sometimes won't be able to discern between a personal contribution and an employer's one, and this form can clear up any confusion. You can do voluntary superannuation contributions through a salary sacrifice arrangement, which would allow you to skip submitting the NOI form. This money would be siphoned off from your pre-tax salary and go on top of your employer's contributions without you needing to lift a finger. You can also make personal contributions like a bank transfer, as well as contributions for your spouse, parents, other family or friends. There's an annual cap of $30,000 for these concessional contributions, which includes the money paid by your employer. For example, if you earn $100,000, your employer will have sent $11,500 to your super fund over the 2024-25 financial year. That allows you to put an extra $18,500 into your super in one year. If you have unused cap amounts from previous years, you might be able to carry them forward to increase your contribution caps in later years. While they can be a great way to top up your retirement nest egg, Gardner said it was not always the best place to put your extra money. "It really depends on what your other goals are because the money's locked away once you put it in there," she said. "Also, for some people, the tax saving isn't big enough. "If you're earning less than $45,000 a year, you're on a 16 per cent tax rate, and the tax rate in super is 15 per cent, so there's really not much of a tax saving. "There's a lot of things to consider, and people should always be getting financial advice before they make any decisions."Sign in to access your portfolio
News.com.au
a day ago
- Business
- News.com.au
‘Substantial difference': How superannuation change will actually impact Australians
Australians are just weeks away from receiving a welcome boost to their retirement savings, with the change having a more significant impact than some people may think. From July 1, when changes to the Superannuation Guarantee kick in, employers will be required to pay super contributions of 12 per cent of a worker's ordinary time earnings. This is up from the 11.5 per cent minimum contribution currently required by law. While a 0.5 per cent increase may not sound like a lot, financial adviser Nicole Gardner said it will have a much more significant impact than many Aussies might think. 'It depends how old the person is, for someone who's young and in their 20s, the compounding effect of that extra 0.5 per cent over the next 40 years is huge,' she told Ms Gardner, who founded Stellar Wealth, broke down the real impact this change will have on Australian workers in a recent social media video. She explained that a person earning $60,000 a year is currently being paid $6900 a year in superannuation and, under the change, this will increase to $7200. According to the Australian Bureau of Statistics, the current average full-time Australian worker earns just over $100,000 a year. Anyone on this salary will see their yearly super contributions rise to $12,000, up from $11,500. Those earning $150,000 will see a rise to $18,000, up from $17,250 and anyone earning $200,000 a year will see $24,000 go towards their super, up from $23,000. This is the final planned increase to the superannuation guarantee, with the figure having increased by 0.5 per cent over the past few years in order to reach the 12 per cent figure. This is the number that it was generally accepted by the government that contributions would need to reach in order to meet the basic needs of Australian retirees in the future. The reason for the stepped yearly increases has been to give businesses enough time to financially plan for the change. While Ms Gardner believes the change is, overall, really positive for Australians and the future of retirement in this country, there are some potential downsides that people need to be aware of. One relates to workers who are on a salary package that includes their super. 'Only a small amount of people have that arrangement with their employer, and that can actually mean that you will have a reduction in your pay to compensate, because the package is at a fixed amount,' the financial adviser said. Ms Gardner also issued a warning to people who salary sacrifice into their super, warning the change could potentially push them over the $30,000 concessional contributions cap. This is the maximum amount of before-tax contributions you can make towards your super each year without those funds being subject to extra tax. 'If you are salary sacrificing up to the cap, with the additional amount of super, that could put you over the cap, so you just need to check the numbers there,' she said. There are currently more than 24 million superannuation accounts in Australia with assesses equalling $4.2 trillion. According to the ATO, as of the 2021 financial year, the average super fund balance for women between the ages of 65-69 was $403,038, and $453,075 for men. Given the Association of Superannuation Funds of Australia puts the comfortable retirement standard at $595,000 for a 67-year-old person, further showing the importance of the July 1 super guarantee increase. According to research from financial comparison site, Finder, 3 in 5 Australians say they are not sure whether they will have enough super to get by in retirement, or feel they will definitely not have enough. This is up from 50 per cent of respondents in 2023. Pascale Helyar-Moray, superannuation expert at Finder, said the increase to 12 per cent will make a 'substantial difference' to the final super balance of a young person starting their career today. Even if they don't make additional contributions, the power of compounding interest over decades will have a huge impact. 'For those who can, contributing extra to your super by salary sacrificing is a smart move,' Ms Helyar-Moray said. 'Just remember, once money goes into super, you can't touch it until retirement, so start small if you need to. Even adding $100 a month will make a significant difference thanks to the power of compounding interest. 'It's also important to check that your employer is paying your superannuation guarantee contributions on time.'
Yahoo
17-02-2025
- Business
- Yahoo
RBA interest rate decision: Michele Bullock under the spotlight as struggling Aussies eye long-awaited relief
Hello and welcome to Yahoo Finance's special coverage of the RBA's interest rate decision. The time has come for Michele Bullock and the RBA board to decide whether now is finally the time to cut the cash rate after more than a year sat at 4.35 per cent. All the big banks have February down as the month millions of homeowners will be delivered a cut, yet a minority of experts are warning it's not a done deal just yet. Follow along as we bring you plenty of insight leading up to the decision, as well as all the reaction after it. If the RBA does finally choose to cut rates, everyone will be waiting for their lender to announce whether it will pass the central bank's decision on. If they do, then you should start to see the change in your repayments in less than a fortnight after your own bank's announcement. But financial advisor Nicole Gardner revealed that some lenders have a specific loan recalculation schedule, which means it could take a while for those savings to hit your account. 'I know that my bank, in particular, only recalculates mortgage repayments in March and September,' she said. 'So for me, if there's an interest rate cut in April, I could potentially be waiting until September until my bank tells me that I can start paying less towards my mortgage. This will all depend on your loan amount and your arrangement with your bank, and if you're not sure what that arrangement is then Gardner said it's best to contact your lender to see what will happen to your repayments. Interestingly, new modelling from Equifax found shows the full positive impact of an interest rate cut will only be seen in six to nine months. 'There often is a bit of a lag because it's only one cut and usually takes a few moves before people start to take it seriously,' AMP economist Shane Oliver explained. 'It can take a while for banks to fully pass on the cuts to customers and it also takes a while for homeowners to realise their bank account is looking better than prior to the cut.' Let's give ourselves a recap of what's gone on since the interest rate was lifted from a record-low of 0.1 per cent in May 2022. A good chunk of the near-three year period since has seen the rate untouched at 4.35 per cent, where it remains now. The big jumps came early on in the cycle, with four consecutive jumps of 50 basis points starting in June 2022. The cost-of-living crisis has been all encompassing. From your supermarket visit to most bills that land on your desk, costs have been up. The official cash rate has been held at a 13-year high of 4.35 per cent for more than a year, squeezing household budgets in a bid to force a pull back in spending to bring down inflation. The number of Australians who are in financial hardship has risen. More than 169,000 people reached out for help with their finances in 2024, according to figures released by the National Debt Helpline (NDH) last month. That's a 12 per cent jump from the year before. Concerningly, NDH CEO Peter Gartlan told Yahoo Finance there had been an uptick in scared Australians opening up about suicidal ideation linked to their current financial situation. The helpline found that the most common issues for people were related to: If you're feeling overwhelmed and need help dealing with financial stress, you can contact free advice and counselling from the National Debt Helpline. You can call 1800 007 007 between 9.30am and 4.30pm Monday to Friday, or reach out to Mob Strong Debt Help on 1800 808 488. If the RBA does finally choose to cut rates, everyone will be waiting for their lender to announce whether it will pass the central bank's decision on. If they do, then you should start to see the change in your repayments in less than a fortnight after your own bank's announcement. But financial advisor Nicole Gardner revealed that some lenders have a specific loan recalculation schedule, which means it could take a while for those savings to hit your account. 'I know that my bank, in particular, only recalculates mortgage repayments in March and September,' she said. 'So for me, if there's an interest rate cut in April, I could potentially be waiting until September until my bank tells me that I can start paying less towards my mortgage. This will all depend on your loan amount and your arrangement with your bank, and if you're not sure what that arrangement is then Gardner said it's best to contact your lender to see what will happen to your repayments. Interestingly, new modelling from Equifax found shows the full positive impact of an interest rate cut will only be seen in six to nine months. 'There often is a bit of a lag because it's only one cut and usually takes a few moves before people start to take it seriously,' AMP economist Shane Oliver explained. 'It can take a while for banks to fully pass on the cuts to customers and it also takes a while for homeowners to realise their bank account is looking better than prior to the cut.' Let's give ourselves a recap of what's gone on since the interest rate was lifted from a record-low of 0.1 per cent in May 2022. A good chunk of the near-three year period since has seen the rate untouched at 4.35 per cent, where it remains now. The big jumps came early on in the cycle, with four consecutive jumps of 50 basis points starting in June 2022. The cost-of-living crisis has been all encompassing. From your supermarket visit to most bills that land on your desk, costs have been up. The official cash rate has been held at a 13-year high of 4.35 per cent for more than a year, squeezing household budgets in a bid to force a pull back in spending to bring down inflation. The number of Australians who are in financial hardship has risen. More than 169,000 people reached out for help with their finances in 2024, according to figures released by the National Debt Helpline (NDH) last month. That's a 12 per cent jump from the year before. Concerningly, NDH CEO Peter Gartlan told Yahoo Finance there had been an uptick in scared Australians opening up about suicidal ideation linked to their current financial situation. The helpline found that the most common issues for people were related to: If you're feeling overwhelmed and need help dealing with financial stress, you can contact free advice and counselling from the National Debt Helpline. You can call 1800 007 007 between 9.30am and 4.30pm Monday to Friday, or reach out to Mob Strong Debt Help on 1800 808 in to access your portfolio
