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tax benefit for >55 in super

Discussion in 'Superannuation, SMSF & Personal Insurance' started by handyandy, 16th Oct, 2007.

  1. handyandy

    handyandy Well-Known Member

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    Location:
    Sydney Nsw
    Hi all

    I realize that most people here would not be using super as there main retirement vehicle but non the less think it worthwhile to highlight the loophole that I found reading through my son's Care super brochure.

    In a nut shell if over 55 then you can take a part pension and still continue contributing to super. In so doing by paying the same amount our of your super as you then salary sacrifice you effectively lower your tax, end up with the same after tax dollars in your pocket and still make a contribution to your super.

    Income and tax outcomes

    Gross Sal $60,000
    less salary sacrifice $30,000
    = gross $30,000
    Plus super pension payment $13,800
    = taxable income $48800
    Less tax + medicare $3,559 (the pension part is tax very favorably)
    Add pension offset $2,070
    = after tax $38,171

    Super Outcomes

    Salary sacrifice cont $30,000
    less 15% tax $4500
    = net super cont $25,500
    Minus pension draw down $13,800
    = increase in super $11,700

    Where you are over 60 similar figures apply but the increase in super would be $14,500

    In a nut shell these figures are good enough to make those who are in this category aware of the possibilities so that they may make further inquiries as to their own situation.

    Cheers
     
  2. Rob G.

    Rob G. Well-Known Member

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    Yep.

    Transition to retirement strategies.

    The idea is to retain older people in the workforce while they 'ease themselves' into retirement gradually.

    Lovely isn't it ?

    Cheers,

    Rob
     
  3. MattR

    MattR Well-Known Member

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    With the raft of changes in super, I'd be really surprised if any of my SMSF clients are going to be voting labor.
     
  4. crc_error

    crc_error The Rule of 72

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    I'm sure Kevin07 will soon enough say 'Me too'
     
  5. Rob G.

    Rob G. Well-Known Member

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    This is no indication of the way I am going to vote ... but I have a long memory.

    Who introduced tax on contributions to super ?

    Who introduced the super surcharge ?

    (I remember the Govt plundering my super balance because I earned too much !!!!)

    Maybe we could be kind and say that perhaps they have learned from the past.

    Or is it an election year ?

    Cheers,

    Rob
     
  6. Billv

    Billv Getting there

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    Andy
    Was your point that by doing this your super increases faster?
    Cheers
    Bill
     
  7. AsxBroker

    AsxBroker Well-Known Member

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  8. handyandy

    handyandy Well-Known Member

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    Location:
    Sydney Nsw
    Hi BV

    The point is simply that if you are in this particular situation then you can have the same disposable income and still increase the money into your super. A simple tax avoidance or rather tax into your super balance.

    I was very surprised when I read through this brochure and think that it will only be a short time before things are changed. (particularly if Labor, the egalitarians, get in)

    Dan, I did see your previous post but at the time it didn't hit me as such a neat way of diverting some tax to super.



    Cheers