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    245 views4 pages

    June 2022 - Newsletter

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    » X AYSOUTHERNADVISORY Newsletter - June 2022 Welcome to the atest ecition of our lant nawslatte (ur articles cover a range of topics which we hope you wil find int We aim to keeo ‘Southern Advisory you informed of changes as thay happen, but we also want to provide ideas to help you ive Suite 103, 204-318 The Kingsway the life you want — now and in the future. Caringbah NSW 2228 P 02.9524 6711 In this edtton we discuss Super changes that can atfect you from 1 July 2022, Tax info@southomachison:com.au Decluctible Super Contributions explained and How does a Transition to Retirement Pension 'W www: southemadisery.com au ‘work and provide you with information on these topics. IF you would tke to discuss any of the issues raised in this newsletter, please don't hesitate to contact us. In the meantime hope you enjoy the read. Al best Southern Advisory team he Liat How does a transition to retirement pension work? ATTR pension could allow you to withdraw up to 10% of your super savings each financial year whether you're stil working full-time, part-time or casually. Even if youte nearing retirement age, you rightnt want to leave the workforce just yet. ‘You may want to gave more money, or you might just enjoy the mental stimulation and interactions that come with having @job. Whatever the reason, setting up a transiion to retiement (TTR) pension could provide you with greater financial fexibity by ‘enabling you to access a portion of your super each year while continuing to work ful time, part-time or casually Below we answer some commonly asked quoetions, such as when you can star a ‘TTR pansion, how it might create financial fexbity, hw much you can withdraw ancl ‘what the potential tax bones may be. At what age can | start a TTR pension? ATR pansion onabos you o access some ‘ofthe super you've saved to date once you've reached your preservation age, when wal ‘depend on what year you were born See the able below to work out what your preservation age. Your preservation age Ee) Bete oy 1360 ss 1 oy s060- 80s 968 58 uy s861-20,un 198257 "iy s862-20sun 862 11989-20400 96458 {Joy 86¢andonenss 8 How might a TTR pension create more financial flexibility? If you're employed By soting up a TTR ponsion you could choose to work less, of continue working the same hours we salary sacrificing or making ppargonal contributions inte super (game whieh rmay be tax deductibe. In both cases, you could use the income from your TTR pension to supplement any reduction in your take- home pay. "you're sigibie, youl also be able to continue receiving super guarantee contributions, which your emoloyeris required to make into your super fun, It you'te self-employed TTR pension works inthe exact same way, except sel-empioyed people may ‘ot be able to set up a salary sacriice arrangement. This ¢ whore you gat your ‘employer to make additonal contbutions into your super fund cul ef your befora-tax income, i you choose to \What you can do as a solf-omployad person Is make personal contibutions into super, \which may be tax deductible. I you happen to'be an emoloyee of your own company, you could however arange to swap part of your pay for salary sacrifice contusions. How much can | withdraw from a TTR pension? ALTTR pension doesnt alow you to withdaw your super as alurnp sum. You ean gonaraly nl do that once youve reached your preservation age and mat certain condtons Cf release, euch a8 retroman. \What you can access is batwoen 4% and 10% of your super each financial yar, but unti 30 June 2022 you may withdraw aslitle as 2%, This figure was reduced to provide greater flexibly during the ‘COVID-19 pandemic. Ws also worth noting that the income you receive is based on the amount you have in {your super, s0 you won't be guaranteed! an Income for ite. Also, by drawing down on your ‘super, you may be reducing the amount you have lotto fund your retirement How are TTR pensions taxed? = Up to age 60, the taxable amount of your income from a TTR pension is taxed at your personal income tax rate, lass a 15% tax offset, = Once yeu turn 60, any income from your TTR pension is tax tes. ~ Investment earnings are subject to the same maximum 15% tax rate thal apples te super accumulation funds, What other things might Ineed to consider? ~ Taking to your super fund, a not al funds provide TTR pensions ~ Figuring out you wart to reduce your wor hours ~ Thinking about your income sources end calculating your ncome needs ~ Fincing out what your goverment entlemenss ae, a3 there may be impications by commencing a TTR pansion ~ Your investment otions, as retuns are tid to movernens in investment markets, ‘0 may go up or down, What happens when I do eventually want to retire? (Once you each age 65 or advise your super {unc thet you've retired permanent, your TTR pension wil automaticaly convert to an accoun-based pension, which may have more advantages [An aocoun'-based pension wil g¥e you a regular incom in retirement and you wen't be lmited to what you can witharaw, but there vel annual minimum witharawal amounts It you're considering witndrawing your super fsa lump sum down tho track, ‘hore wil also bo issues and tax implications to think about Betore decicing fa TTR strategy is right for ‘you, speak to us t0 help you understand the possible benefits and impiications for your particular circumstances. [AWM Soniens Pty Li. Fs pastored Oct 2021 | MiB: Tax-deductible super contributions explained Did you know, you may be able to claim a tax deduction on certain super contributions when you do your tax return? Whether you're employed, sett employed, orn some instances even unemployed or retired, you may be able to claim a tax deduction on certain after-tax super contributions you've mad ‘Those don't include compulsory S& Contributions your employer might be required to make into your super fund Under the super guarantee, nor does it include salary sacrfice contributions, \ihion are additional contributions you may get your employer to make into your super {und out of your before-tax income, How do | make a tax-deductible super contribution? ‘You can make an ater-tax super contribution ina variety of ferent way, such as using money from your reguler bank account, savings, an inheritance, of from the proceeds of tha sale of an asset. You may then be able to claim a tax leducton on the amount ofthat contioution when you do your annual tax return. What are some of the benefits of tax-deductible super contributions? Putting monay into super and claiming it as a tax deduction may be of particular benefit if you receive some extra income that you'd otherwise pay tax on at your personal income tax rats (as this‘ often higher Similar, if you've sold an asset that you have to pay capital gains tax on, you may docide to contribute some or all ofthat money into super, s0 you can claim tas a lax deduction, This coulé reduce or even siminate the capital gains tax that's owing altogether Meanwhia, there could be further tax bonafts as invasimant earnings mada inside the super environment may a'so boneft trom an equivalnt tax saving ihion could make a diferenco when you clo eventual withdraw your super savings and rete What do | need to do to claim a tax deduction on a super contribution? Make an after-tax contribution to your super he amount te you but remember you can't contribute more than $27,500 per year under the naw ‘concessional contributions cap, unless you eigiblo to make catch-up concessional ‘contributions (more on ths below choose to contribute is up Ifyou exceed the yearly cap, extra tax may apply tothe excess contributions. Lodge a form with your super fund Youll need to lodge a notice of intent form with your supor fund, which your supe fund wil acknowiedge in veting, ‘Aso note, you shouldn't make any withdrawals, rollovers or start drawing a pension from your super ‘of inlent form nas bean lodged with and ‘acknowiedged by your super fund. Doing any of those may reduce or validate tho tax deduction you's sooking. Have the paperwork ready when you do your tax return ‘Once the financial year is over, you ‘can propare and lodge you tax raturn using the written acknowledgement ‘tom your super fund that confims your intention to claim and the amount you can claim, Remember, you normally have unt 31 ‘October to lodge your tax return for the previous financial year, but you may have more time if you use a registered tax agent Are there other things that I should keep in mind? Your age. Aryone who's elgibi to contribute to super can claim a tax deduction onthe 'e-tax contributions bul those aged 67 ‘or over need to meet for nave the one-off cempton from) the work test before being ‘able to make voluntary super contributions Under the work test, you must'va been ‘gainfully employad during the fnancil yaar for a least 40 hours over a period of no more ‘than 20 consecutive days Meanie, youre under age 18, you can only ‘lam a tax deduation on a super contibution ‘you've owned incomo as an employee or a business operator during the year: 4 “7 Contribution limits it you claiming a tax deduction for an after-tax super contribution, the contrioution will count toward your concessional contributions cap ($27,500 per yea Noto, you may be able to contibute mote than this amount if you're agile to use unused concessional contr bution ‘cap amounts from previous fnancia years. I's also important to note that tax-deductible contributions are not the only contributions that count toward the concessional eontibutions cap, ‘Other contributions that count towards this eap include: Compulsory 8G contributions your ‘employer pays uncle the super guarantee, including contributions from any other jabs you may have held in the same fnancial year Salary sacrifice contributions you may get your employor to make into your super fund out of your before-tax income, Other contribution incentives ‘Atortax super contributions that you claim a tax daclucton for wil not be ‘lige for a super co-contrbution from the government. Also nota, downsizer contributions {which you can make it you's 68 oF over) are not tax deductible, When you can access super it's important to know that tho government ‘os general ruigs around when you can ‘access your super. Generally, you won't be abla to access this monay unt you've reached your preservation age iwhich wil be between 55 and 60, depencing on ‘when you were bom) and rti ‘Super returns aren't guaranteed “The valu of your investment in suc can go up and down. Botere making ext contioutions, ma sure you understand ancl are comvortab wth ‘any potential risks. you'd tke alscuss making extra contributions to your superannuation, ‘ploase don't hesitate fo give us @ call. Super changes that could affect you from 1 July 2022 Anumber of changes to the super system could create opportunities for Australians of all ages. Here's a rundown of what you need to know. Last month, the Federal Government legis'ated a number of proposals that it previously put forward in its May 2021 Federal Budget. The changes announced vill come into effect on 1 July 2022. Here's @ snapshot of what will change, with further detals below. + More people will be elgiole for contributions from their employer, vundor the Superannuation Guarantoo (SG), a5 the minimum income trreshoid ‘of $450 peer month willbe removed, + Work tos roquiromants for those aged 67 to 75 wil be softened and only apply to people who want to claim a ‘ax deduction on voluntary super

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