Salary Sacrifice

[JustaDreamer]

Just talking to mate at work tonight was wondering if I can do this say I save 500 a month x 12 so $6000 a year that’s after tax.
I’m on about 75,000 – 80,000 a year so in the second highest tax bracket
He was saying Salary Sacrifice that 500 a month before tax and when I pull it out only pay about 15%.

This I knew because but I thought I had to wait till I was 65 to access my super he was saying with Salary Sacrifice that’s not the case I can with draw the money the day after in goes it. If this as the case can I use it as a money box/piggy bank?

Thanks Mat.

 

[twobobsworth]

Doesn't sound right to me. I'm pretty sure all money is preserved and treated the same way as SGC. Your super company would be able to advise if this is the case.

 

[Pat]

Just talking to mate at work tonight was wondering if I can do this say I save 500 a month x 12 so $6000 a year that’s after tax.
I’m on about 75,000 – 80,000 a year so in the second highest tax bracket
He was saying Salary Sacrifice that 500 a month before tax and when I pull it out only pay about 15%.

This I knew because but I thought I had to wait till I was 65 to access my super he was saying with Salary Sacrifice that’s not the case I can with draw the money the day after in goes it. If this as the case can I use it as a money box/piggy bank?

Thanks Mat.

Mat,

Your mate is Just a Dreamer, salary sacrificed super is taxed at 15% but cannot be accessed until retirement which at the earliest is 55 if you are in transition to retirement.

 

[LynnH]

JustaDreamer

Unfortunately, you "can't withdraw the money the day after it goes in" - in fact you can't withdraw it until age 55 (at the earliest - and even then, you can't withdraw it unless you fulfil certain conditions). You can't withdraw it tax-free until age 60, under current legislation. And that legislation could change considerably before you reach age 60!

Before you contemplate such a course of action, please see an investment-savvy financial planner or accountant.

Cheers
LynnH

 

[alexlee]

If something sounds too good to be true............

 

[wylie]

I don't know if things have changed but when I got engaged in 1985 I increased my super contribution from 5% to 10% which was the maximum I could contribute. My employer matched my contribution (from memory) and my super started climbing at a much faster rate.

We did this as forced savings and it worked well. I had a year off, went back for two years, and then had another year on maternity leave, then a three year career break, another year maternity leave, and.... finally, after baby number three, and all my available stalling tactics ran out, I resigned.

Most of that leave was on no pay, but all the way through I paid into my superannuation. So for years I had debit payslips. I resigned about 1997 and I was able to take my own extra contributions and reduce our housing loan enough to enable me to stay home with the kids. From memory I pulled out about $45K.

I don't remember the nitty gritty details, and don't know whether this can still be done, but I did it.

I wonder if this is what your mate is talking about?

Wylie