Superannuation Discussion + market volatility

[get me outta here]

I second this option. It allows quite a lot of control without the big anxious step of an SMSF. The main thing is to work out how you will be able to sleep at night not worrying about your investments.

some what a halfway point to an SMSF

I know a few people who are happy with the extra options without the hassles of being a trustee for an SMSF

https://www.australiansuper.com/investments-and-performance/member-direct.aspx - how I cut my teeth before starting my own SMSF

 

[JohnK]

Yes - we have been doing this for years. At 55 we started a super stream and now we are able to draw down between 4 - 9%? annually, tax free.

That's good. I'm looking for a cash grab at 60 years of age. Minimising my already high income tax now would be a good thing.

Also trying work out if it is cost effective to split my investments into 2 names. Take a capital gains hit now and any future profits halved but how to do cost effectively?

 

[Pushka]

That's good. I'm looking for a cash grab at 60 years of age. Minimising my already high income tax now would be a good thing.

Also trying work out if it is cost effective to split my investments into 2 names. Take a capital gains hit now and any future profits halved but how to do cost effectively?

As long as you plan on permanent retirement you can.

 

[lovetravellingoz]

That's good. I'm looking for a cash grab at 60 years of age. Minimising my already high income tax now would be a good thing.

Also trying work out if it is cost effective to split my investments into 2 names. Take a capital gains hit now and any future profits halved but how to do cost effectively?

Given that I recall correctly that you are about to retire in Thailand, with a Thai wife whom I am assuming that you will be looking to split the assets with, I would suggest that you really need to talk with an expert familiar with both the Australian and Thai Tax laws.

Also if you wife has no or low income you could be pushing contributions into her account. Again would need to check on what is applicable for a resident/citizen etc.

 

[travelislife]

Anyone utilising salary sacrificing to top up their superannuation? If salary sacrificing say $10,000/pa would you still be able to withdraw at age 60 without paying additional tax or does the amount that is salary sacrificed get treated differently?

Need to start reading up on options to try and reduce tax and save for retirement.

Above or below the threshold? I max out to the threshold as it is the easiest guaranteed investment return there is.

As I said above maxing out the $30k (or what will now be $25k) contributions on the 15% tax rate going in seems a no brainer. If on the 37% rate it is an instant 35% return. $1000 earnt is $630 invested outside super, or $850 invested inside super.

 

[scwappy]

Anyone utilising salary sacrificing to top up their superannuation? If salary sacrificing say $10,000/pa would you still be able to withdraw at age 60 without paying additional tax or does the amount that is salary sacrificed get treated differently?

Need to start reading up on options to try and reduce tax and save for retirement.

I used salary sacrifice to top up. The amounts are treated the same as other compulsory contributions. Seems like a no brainer if on 37% and above and can afford it.

 

[JohnK]

As long as you plan on permanent retirement you can.

I will be retired after this job. No decision is permanent.

Given that I recall correctly that you are about to retire in Thailand, with a Thai wife whom I am assuming that you will be looking to split the assets with, I would suggest that you really need to talk with an expert familiar with both the Australian and Thai Tax laws.

Also if you wife has no or low income you could be pushing contributions into her account. Again would need to check on what is applicable for a resident/citizen etc.

I will not be retiring to Thailand. We will live here and our daughter go to school here. We will visit Thailand a lot for holidays for daughter to see her grandparents and me to play golf. I need to minimise the tax I pay now and to somehow increase the payout in 7 years time.

Also trying to reduce the tax on rental income would be great. I don't want to spend a great deal to achieve the desired result. Can I transfer half the property to wifes name and pay just stamp duty? Don't want to involve solicitors and real estate agents who want their slice of the pie.

Any clues as to where in Australia one can buy relatively new apartments for under $300,000?

 

[Pushka]

I will be retired after this job. No decision is permanent.


I will not be retiring to Thailand. We will live here and our daughter go to school here. We will visit Thailand a lot for holidays for daughter to see her grandparents and me to play golf. I need to minimise the tax I pay now and to somehow increase the payout in 7 years time.

Also trying to reduce the tax on rental income would be great. I don't want to spend a great deal to achieve the desired result. Can I transfer half the property to wifes name and pay just stamp duty? Don't want to involve solicitors and real estate agents who want their slice of the pie.

Any clues as to where in Australia one can buy relatively new apartments for under $300,000?

Agree. But you need to have the mindset at the time that retirement is permanent in order to get funds released.

3 months later - who knows what might happen.

 

[burmans]

Any clues as to where in Australia one can buy relatively new apartments for under $300,000?

Well, you could try a mining town but not sure I'd suggest it, you'd need to be a contrarian investor

Property investors lose 50pc in Qld mining towns | afr.com

 

[exceladdict]

Any clues as to where in Australia one can buy relatively new apartments for under $300,000?

East Perth. PM if interested

 

[JohnK]

East Perth. PM if interested

I will do some research. Not quite ready right now.

Also need to research if it's worthwhile to transfer assets/income to daughter.

 

[Happy Dude]

It's generally best to keep income-producing assets in the name of the higher earning partner to take advantage of any tax deductions but you have some pretty specific and unique questions here JohnK.

I recommend you find a tax accountant and a financial planner to give meaningful answers. They'll tell you upfront how much it'll cost. I don't think you need agents/lawyers to transfer a property title to a spouse, but I'd be chatting to an accountant to find out if it's a good idea (financially).

 

[lovetravellingoz]

It's generally best to keep income-producing assets in the name of the higher earning partner to take advantage of any tax deductions .

I assume you are negative gearing then? Otherwise income moved to someone that pays, no or little, tax will reduce tax paid.

 

[JohnK]

It's generally best to keep income-producing assets in the name of the higher earning partner to take advantage of any tax deductions but you have some pretty specific and unique questions here JohnK.

I have had a chat with accountant. He advised against selling and putting in 2 names as the cost of selling negates any advantage splitting income.

I have some spare cash that I would like to invest. I don't want to involve financial planners. Have done everything on my own and think I can manage from here.

Property in the little ones name may not be a good idea as income could be taxed at highest marginal rate? Maybe some income producing property in Thailand in wifes name.

Heaps to think about.

 

[Vic]

I will do some research. Not quite ready right now.

Also need to research if it's worthwhile to transfer assets/income to daughter.

Absolutely not worth putting any significant investments in a child's name. children can only earn about $400 per year before getting hit with massive penalty tax rates. Unless they earn via their own undertaking and have full independent control over how they use the income and investment direction.

About the best option is a bankwest kids bonus saver account. Bonus interest for every month a deposit is made. Can deposit between $50 and $250 per month. Meaning a maximum $3000 commitment. Currently getting about $130 per year in interest.

 

[JohnK]

About the best option is a bankwest kids bonus saver account. Bonus interest for every month a deposit is made. Can deposit between $50 and $250 per month. Meaning a maximum $3000 commitment. Currently getting about $130 per year in interest.

We opened a CBA kids bonus saver trust account for daughter with brother and my mum in control. My brother will provide his tax file number to declare half interest and mum is pensioner. The trust account was so I can't access the funds. I put $300-$400 every month and grandparents deposit some as well.

Still thinking about ways to invest and minimise tax. Wife not a resident. Daughter bad idea as she will have to pay 48.5% tax on earnings.

Not as easy as it sounds without being dodgy.

 

[Vic]

We opened a CBA kids bonus saver trust account for daughter with brother and my mum in control. My brother will provide his tax file number to declare half interest and mum is pensioner. The trust account was so I can't access the funds. I put $300-$400 every month and grandparents deposit some as well.

Still thinking about ways to invest and minimise tax. Wife not a resident. Daughter bad idea as she will have to pay 48.5% tax on earnings.

Not as easy as it sounds without being dodgy.

the bankwest account is good because it's not possible to go over the kids tax free threshold, and can be in the kids name but controlled by parents. The bankwest account sweeps the money out to a normal account annually. so you have to start again each year. bonus interest rate is 4.75%, but low monthly deposit amount is a limitation. Bonus Saver - Kids; Savings Account - Bankwest
The CBA account sounds like it could earn more, so the trust makes sense.
I think NAB or someone else offer a kids bonus account. So possible to set up a few accounts, but make sure not to go over that kids threshold.

 

[Happy Dude]

I assume you are negative gearing then? Otherwise income moved to someone that pays, no or little, tax will reduce tax paid.

I am yes. I assumed JohnK is too as he mentioned rental income. He may own the property outright, I dunno.

If only there was a way to move the income to my non-working wife whilst maintaining negative gearing for me....

 

[Happy Dude]

We were warned off those kids savings accounts. Better to pay down the mortgage asap for us. The kids will get the house anyway which will be far more than those accounts will generate.

 

[JohnK]

I am yes. I assumed JohnK is too as he mentioned rental income. He may own the property outright, I dunno.

If only there was a way to move the income to my non-working wife whilst maintaining negative gearing for me....

Not much to negative gear. Most owned outright and paying ridiculous amounts of tax for my hard work.