How much to contribute to super?

[The Y-man]

hi y man

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The employers contribution are taxed at 15%...unless your employed by the government.

CG Tax, while your in accumulation mode is 10%
and when retired is 0%

simple

Hi HB2,

I was originally responding to T&T earlier in the thread - it was "semi-government". Do you think it would be zero in this case?

Cheers,

The Y-man

 

[sue78]

i haven't really given much thought to super. i haven't been working much...preferring to enjoy life now and use my money to leverage and make more money now. I don't pay much tax but even then I don't mind toomuch if it goes towards hospitals, childcare etc

don't you think buying trees and vineyards is a better way to reduce tax? then you can re-invest teh tax dollars you saved and leverega eit for a better return....that's a betterw ay of superannuation and you don't need to wait until 65y.o to access your money.

With the new legislation where you can gear your super now, it's a lil bit better..if yur can find a fund that will return more than 11% but still I don't much thought to super.

Super isn't part of my retirement plan...it's just a bonus to me.

 

[The Y-man]

Some of my longer term CG type investments have a 10 year horizon (i.e. capital is locked away for 10 years). For some people, the maturity date may be quite close to the age they can start accessing their super, which may make it a more tax effective option.

My understanding is that super also has a higher degree of asset proteciton than other forms of trusts.

Cheers,

The Y-man

 

[Stella]

I was told by a financial adviser to contribute 5% as the government 'matches' whatever contribution you make up to 5%, subject to the 10-year rule. After 10 years, contribute 10% as the government will then 'match' that. I write match in quote marks because I looked on my statements for the government's contribution, but then realised that it doesn't appear until you retire, as it is an unfunded contribution, and therefore, incidentially, subject to tax. Do a calculation - there's not a huge difference between 2% and 5%, so if you can afford it, maybe do the 5%. I see super as a bit of an insurance policy rather than dead money. PSS is not subject to market fluctuations. Dallee

Thanks everyone for your thoughts. As Dallee suggested, I dont 'need' the extra $ between 2 & 5% so I think I'll stick on 5% for awhile & see how hte finances are when IP#2 is closer.

Cheers
Stella

 

[letiha]

Iam 28 and only have about $4k super due to working overseas and being a mum.

As of the next pay I am able to salary Sacrafice $1k every 3 months, keeping me eligible for single parents pension, basically get $1, but this keeps my family tax benfit at the higher rate as well as my Childcare benefit at the higher rate because i am technically a recipient of a benefit.

Love loop holes, plus I really need extra super.

 

[sue78]

Letiha....with what you're doing...you don't really need super!

i am hoping to retire by 35y.o..well not retire but never have to work again if I don't want to.

 

[hb2]

Hi HB2,

I was originally responding to T&T earlier in the thread - it was "semi-government". Do you think it would be zero in this case?

Cheers,

The Y-man

Hi Y man
do i think it will be "zero".....definitely not.

This thread started off with a question re- government employees and got diverted to private employees.
As government employees don't pay any tax on their contribution, understandably their super schemes are treated differently.

"Untaxed schemes
This chapter deals with untaxed superannuation schemes; in particular benefit payments in untaxed schemes that arise from an untaxed source. These schemes generally apply only to public servants."

For more information for government employees look here......
http://simplersuper.treasury.gov.au/documents/outline/html/simpler_super-08.asp


For the rest of us, is super worth investing in at 30....probably not.
Leveraging outside will probably achieve far greater results.

But when I was 30, the top marginal rate was 60c in the dollar, so topping up the SMSF wasn't a silly idea.
If fact a lot of business owners maximized their contributions into their SMSF.
By using a SMSF, it provided a vechicle for investing in property and shares that only paid 15% tax on its income, and provided assest protection.

Today, with zero tax on the funds income plus zero CG tax on the sale of assests, my contributions into super for the last 25 years have proven to be very very rewarding.

cheers

 

[crc_error]

Love loop holes, plus I really need extra super.

who said its a loophole?

its all designed to get people like yourself back into the workforce without losing their centrelink benefits.

 

[letiha]

crc.error

It is a loop hole for me - I earn over $60k a year, but to qualify you need one fortnight every 3 months where you earn less than the threshhold which in my cases iss about $1500.

Then it doesn't matter how much my yearly taxable income is.

Not bad at all.