Superannuation Discussion + market volatility

[hydrabyss]

Neat thing about deductions is that it comes off individual's top marginal rate. As we know.
Usually doing tax stuff, for me, comes down to reward for effort, I don't bother with stuff like spouse contributions, (and I don't deliver my bottles to get 10c back). I do assist MissB with gov co-contribution (to also help teach financial literacy).

In this eg is the paperwork of transferring $11,000 from non-concessional to concessional worth $330? YMMV but knowledge is nice to have.

I put less energy into deciding how to pick the path to financial freedom as all i had to do was be patient. Now I am putting more energy into restructuring and deciding which way to go forward. I have enough income from assets to have a decent retirement but it would be smart to consider alternate options like super for my partner who is 64 to reduce my taxable income.

 

[Quickstatus]

like super for my partner who is 64 to reduce my taxable income.

That would involve making concessional contributions up to concessional cap then spouse split.

 

[hydrabyss]

That would involve making concessional contributions up to concessional cap then spouse split.

So concessional would be me giving her 120k to put into her super and can be done each year.

I think the spouse split would have been good to reduce my taxable income but like most things wont be an option going forward.

 

[Quickstatus]

So concessional would be me giving her 120k to put into her super and can be done each year.

No the concessional cap is $36000/year per person. Meaning you can claim a tax deduction on $36,000 super contributions per year but no more. On the other side of the coin , concessional contributions are taxed at entry into super account at 15%.

The $120,000 per year refers to non concessional contributions - you can't claim a tax deduction (effectively using after tax income) but the contribution is not taxed on entry into super fund.

The spouse split will be good while the spouse is 65 yrs or less.

 

[hydrabyss]

The $120,000 per year refers to non concessional contributions - you can't claim a tax deduction (effectively using after tax income) but the contribution is not taxed on entry into super fund.

The fun of learning all the new terms so yes this one which is non concessional.

So 120k a year up to age 75 and still has the option to withdraw a lump sum if needed if I have looked up the correct information.

 

[Pushka]

The fun of learning all the new terms so yes this one which is non concessional.

So 120k a year up to age 75 and still has the option to withdraw a lump sum if needed if I have looked up the correct information.

I don't think it's 75 but by end of 74 or something. Found that part a little confusing. Not there yet thankfully.

 

[hydrabyss]

I don't think it's 75 but by end of 74 or something. Found that part a little confusing. Not there yet thankfully.

Yes your right I just went back and checked what it said on chatgpt and was under 75.

 

[serfty]

Yes your right I just went back and checked what it said on chatgpt and was under 75.

Yes, I believe contributions and setting up in relation to this must be all done and dusted before one's 75th birthday.

General advice is to not wait until the last day, week or even month.

 

[Brissy1]

Yes, I believe contributions and setting up in relation to this must be all done and dusted before one's 75th birthday.

General advice is to not wait until the last day, week or even month.

Inconsistently, some age based super rules are before/after "you turn XX years", and some "in the financial year you turn XX years", always worth double checking.
And when you've learnt all those, ATO comes up with another, relevant to above...
Voluntary contributions (personal or salary sacrifice) can be accepted by your fund within 28 days after the end of the month in which you turn 75.

 

[lakeman]

No the concessional cap is $36000/year per person. Meaning you can claim a tax deduction on $36,000 super contributions per year but no more. On the other side of the coin , concessional contributions are taxed at entry into super account at 15%.

The $120,000 per year refers to non concessional contributions - you can't claim a tax deduction (effectively using after tax income) but the contribution is not taxed on entry into super fund.

The non concessional contribution cap rises to $330000 after July 1st meaning you could contribute $390000 using the 3 yr bring forward rule ( if eligible)

The concessional contribution cap is $30000 (tax deductible), rising to $32500 on 1st July.

The other consideration to delaying starting a pension till after 1st July is the Transfer Balance cap will rise to $2,1 million , not a concern now to the case being discussed above , but maybe of concern in the future if their spouse dies or they sell their house , opening up further options to top up super.

 

[hydrabyss]

The non concessional contribution cap rises to $330000 after July 1st meaning you could contribute $390000 using the 3 yr bring forward rule ( if eligible)

The concessional contribution cap is $30000 (tax deductible), rising to $32500 on 1st July.

The other consideration to delaying starting a pension till after 1st July is the Transfer Balance cap will rise to $2,1 million , not a concern now to the case being discussed above , but maybe of concern in the future if their spouse dies or they sell their house , opening up further options to top up super.

You have mentioned the one part that has been giving me so much anxiety regarding super and that is if your partner dies. As I am only 53 I don't have enough to start building up my super at the expense of reducing my capital with no access for some time.

As my partner is 64 it would be perfect to take advantage of her age in using super to reduce some tax liability as most income producing assets are in my name. The problem is although we have been together for a long time we dont live together and she has a son. Not something I want to think about but need to consider the risks of putting too much into her super if some thing happens.

So saving x amount on tax at the risk of losing xx_xx amount of money is something I need to consider.

 

[Pushka]

The non concessional contribution cap rises to $330000 after July 1st meaning you could contribute $390000 using the 3 yr bring forward rule ( if eligible)

Don't you mean $130,000 cap so $390,000 3 year rule? Up from $120,000 now? I didn't realise it was increasing.