Tuesday, 10 September 2019

Superannuation in Australia

https://en.wikipedia.org/wiki/Superannuation_in_Australia
Good introduction:
https://www.youtube.com/channel/UCs1ARI2y18hrjNYVqjtJ-pQ/videos
http://www.superguy.com.au/
http://www.superguy.com.au/wp-content/uploads/2019/08/SuperGuy-SuperTips-2019-20.pdf

Contribution caps:
https://www.ato.gov.au/super/self-managed-super-funds/contributions-and-rollovers/contribution-caps/
  • Concessional contributions cap is $25,000 for all individuals regardless of age.
  • Non-concessional contributions for members under 65 with total superannuation balance of less than $1.4 million has $300,000 cap (over three years) over 65 $100,000 cap
Superannuation calculators:
https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/super-and-retirement-calculators

Retirement calculator (considers super and age pension):
https://www.commbank.com.au/digital/calculators/retirement#/start
https://firststatesuper.com.au/member/super/how-much/super-projection
https://www.canstar.com.au/calculators/superannuation-retirement-calculator/

Preservation age before you can access your super is based on date of birth:
https://www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?page=11
  • Before 1 July 1960: 55
  • 1 July 1960 – 30 June 1961: 56
  • 1 July 1961 – 30 June 1962: 57
  • 1 July 1962 – 30 June 1963: 58
  • 1 July 1963 – 30 June 1964: 59
  • From 1 July 1964: 60

Minimum annual pension payments:
https://www.ato.gov.au/rates/key-superannuation-rates-and-thresholds/?page=10
  • Under 65: 4%
  • 65–74: 5%
  • 75–79: 6%
  • 80–84: 7%
  • 85–89: 9%
  • 90–94: 11%
  • 95 or more:14%
Government age pension:
https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/how-much-you-can-get
Full Age Pension:
  • Single: $933.40 per fortnight (approximately $24,268 per year)
  • Couple (each): $703.50 per fortnight (approximately $18,291 per year) 
  • Couple (combined): $1,407.00 per fortnight (approximately $36,582 per year)
Aged pension is subject to income and asset tests:
http://www.yourpension.com.au/APCalc/#CalcForm
  • Single would receive a full Age Pension if their fortnightly income from other sources was $174 or less. For each dollar of income over $174, their fortnightly Age Pension payment would be reduced by 50 cents in the dollar.
  • Couple living together would receive a full Age Pension if their fortnightly income from other sources was $308 or less. For each dollar of income over $308, their fortnightly Age Pension payment would be reduced by 50 cents in the dollar.
  • Single homeowners full pension assets must be less than $263,250, disqualifying limit $572,000
  • Single non-homeowners full pension assets must be less than $473,750, disqualifying limit $782,500
  • Couple homeowners full pension assets must be less than $394,500, disqualifying limit $860,000
  • Couple non-homeowners full pension assets must be less than $605,000, disqualifying limit $1,070,500
Pension account income:
https://www.australiansuper.com/tools-and-advice/calculators
Yet unlikely that the next decade will have such good returns. Many investment professionals have warned members need to prepare for low and even negative returns as the current economic growth cycle is in the final stages.

Property:
Much more active management and lucky to get 4-5% net return after considering rates, water, maintenance, management fee, insurance, land tax, body corporate 


The question is whether shares or property (in SMSF) will have better returns long term?

History:



Giftings assets prior to age pension:
https://www.dva.gov.au/factsheet-is92-giving-away-income-or-assets
Gifts that have been made during the five years prior to claiming pension or payment may be counted in your pension or payment assessment.  

During age pension can gift:
https://www.humanservices.gov.au/individuals/topics/gifting/27276

  • $10,000 in 1 financial year
  • $30,000 in 5 financial years - this can’t include more than $10,000 in any year.
Can gift property to childrens and keep age pension via granny flat:
https://www.smh.com.au/money/how-to-give-property-to-your-kids-and-keep-the-age-pension-20151118-gl1ypg.html

Superannuation Death Benefit Tax:

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