» X ASSOUTHERNADVISORY Newsletter - September 2023 ‘Welcome to the latest exition of our clint newsletter, Southern Advisory Suite 103, 204-318 The Kingsway ‘Our articles cover a range of topics which we hope you wil find interesting. We aim to Caringbah NSW 2228 keep you informad of changes as thay happen, but we also want to provide ideas to P02 9624 6711 E info@southornadvisoy.comau help you ve the life you want ~ now and in the future. Pe * W winw southemadvisory.com.au In this edition we discuss and provide you with information on: + Will these super changes atfect you = 8 money mistakes - Tax-cleductible Super Contributions explained It you would Ike to discuss ary ofthe issues raised in this newsletter, please con't hesitate te contact us. In the meantime we hope you enjoy the read. Allthe best ‘Your Southern Advisory team er Boar AEN E808 265 99 an red egret ar bits ae Ce Repserve her Fare Peng iid Aula Frc Srens Leare 2 9807 ‘Traore A? Franca rng Py iro APS ASN 8906 208327 AFSL 22 TOSane arr rare Sees ene Carn AN 36 02976 24 AES 234 S81 pte botany our tnioues © Nt snares of SMP en ny a aan he cnet algerie wade ata laos! eee anes ‘itn rae ny ues ron Balan ay een, ou selene ho appropriate abe wh eg tase nates yo ee ou vey oaWill these super changes affect you? ‘As our superannuation balances ‘grow larger, it makes more sense than ever to keep track of the many rules changes that have recently happened or are coming up soon. ‘Australians are investing more in super almost $151 bilion dois in the year encing March 2023, an nerease of 11.3 per cont ‘Those extra contributions, plus the rebou in the financial markets, have resulted in super assets of around $3.5 trio ‘Andits being pul fo good use. We took out hump sum payments totaling $53.5 billon dotars during the 12 months and Pension payments of $42.3 bilion.* Quarterly rate of return “To koep your supar on track for a comfortable retirement, check out these latest changes in caso they affect you. ‘Super bonus for workers For amployees, tha naw financial year off with an inctease in the Sunerannustion Guarantee paid by empioyers. tis now 11 Por cent of eigibie wages. ‘This rate wil increase by 0.5 per cant each year unlit reaches 12 per cent in 2 “The Austalan Tax Office wil also be cracking dawn on employers fon time or at al, From 1 July must be paid at the same time as wages rather than at the end of each quarter. “The racent Federal Budget also provided funds to help the ATO enforce super payments and recover unpaid amounts, Minimum pension drawdown increased ACOVID-19 measure to reduce the minimum arawown recxited on Super pensions ended on tly 2023 Investors receiving super pensions and annuities must withdraw a minimum amount tach year, Th federal government rediced this amount by 50 por cont over tho la four financial years to hep those wanting potact ther capital asthe markets recovered from the enaos of he pandemic ‘You can find out more by visiting the ATO's minimum pension standards” Transfer balance cap to be lifted “The maximum amount of capital that can be transfered to your super pension increased! to $1.9 mln from 1 July 2023." ‘The transfer balance cap limits the total ‘amount of super that can be transfered into @ ‘ax tree pension account. This is aif lint ‘The cap is indaxod an bagan 2° $1.6 milion when it was introduced in 2017, Inereases in the cap are tod to CP! movements. You can see your transfer balance account and cap information in your online ATO account Extra tax for large balances Investors with super balances of $3 milion ‘or mare wil oso the banaft of super tax breaks on eamings, From 1 July 2028, !ax2$ on future earnings will be 30 per cent instead of 15 per cent although they wil Continue to Benoit from more generous tax. breaks on eamings from the funds below ‘he $2 milion thrashotd This change is expected to apply 10 ‘around 80,000 people, Other recent changes A numberof changes announced in both Fedral Budgets last yea have also boon slowly introduced over tne past 12 months In one major change, the minimum age was lowored for those abio to invest soma of tha proceeds of the sale of their hors ito super, known ae a ‘downsizer contibution From 1 January 2023, if you are aged 55 o: older, you can now contibute to your super up to $800,000 (or $600,000 for a coupie from the sale of their home. The home must be in Australa and owned by you for at loast 10 years. In another residential property intative, sschome that allows iwvestors to use their super fund to save for ther frst home has been expanded, The First Home Super Saver Scheme was last year increased from $20,000 to $50,000. ‘The Scheme allows you to make contributions Into your super then apply to release them when you want to purchase your frst home, idad you mest the sigibilty requirements Another significant re'orm for many has bbaen the removal of the work tast for those lnder 75, who can now make or receive personal supar contributions and salary sacriiced contributions. (Although the ATO notes that you may stil need to mest ‘tho Work test to claim a personal super contrib ion) Proviously if you wore under 78, you could only make or receive voluntary contributions to super i you workod atleast 40 hours ‘over 8 30-day period ‘A further change introduced last year was the removal of tho $450 per month ‘threshol for super contributons. Employars must now pay the suner guarantee to all employees regardless of ‘hair earnings however, employses who are Lndir 18 stil need to work more than 30 hours ina weak to be lige, While caps have boon ited and programs ‘expanded, al least one scheme has not changad. The Low Income Super Tax Offset (LISTO) threshold remains at $837,000. LISTO is a government payment ‘0 super funds of up to $500 to help low income earners save for relremant # you eam $37,000 or lass a year you may be eligible @ LISTO payment. You don't need ‘o do anything other than to ensure your super fund has your tax fle number Final, a project that may pay off down the ‘ack, the Federal Budget incised continued funding for a superannuation consumer advocate to help improve investors’ outcomes. Expert advice Is important to help navigate ‘these changes. Call us for more information Iv repsstwwn ato govaulBusiness‘Sal business rastoomodge ane payne The super Ripe gov ay aipneraon9 money mistakes people make in retirement How to keep your finances on track once you leave the workforce ‘When you've worked hard all your life to build up your nest egg, the last thing you want to do is fritter it away too quickly. In this article, we look at the common money mistakes people in retirement make, and how you can do your best to avoid them. 1. Not taking control of your super W's important to know what your options are for geiting access to your superannuation when you retire. You can takp ft as a mp sum, an allocated pension or an annuity To find out more about accessing your super speak 1 us to determine what's right for you 2. Not knowing your entitlements Don't make the mistake of not knowing what payments youre eigibie for in retirement. This may include government bonofis, such as the Age Pension, caror’s allowance or disability support through to soncessions on health and travel 3. Spending like you're still working Dipping into your savings or your super money reguisely wil soon white away your hard-eared savings. Find out about ways ‘to manage your money in rotkamant to holo you ftse up your cash flow and keep an eye ‘on your expenses. 4. Not managing your investments ‘Just because you're retired, dessn't mean you should be complacent about your restments, I's important to consider your personal situation. Ifyou have investments ‘000 to contact us. 5. Not managing your debts Consider all your options for reducing Your debts, as you may not have enough funds to iat you though your retement. Be cares! about paying too much inert Con your debts. f you nos! to pay of your rom loan, make sure your aware of how seling your home or investment property ‘fects your entitlements 6. Spending your retirement savings on the kids it you plan to give money to your Chiciren (or grandchicren) to help them financially, be aware of how giting or ‘going guarantor might affect your tax and your iftestye in retrement. 7. Letting your insurance lapse I's tempting to reduce your outgoings in retement by cutting back on things tke Insurance. But before you do, consider whether you could cut back in othor ways frst 8. Taking expensive holidays Make sue your choice of destination fi witun your overall budget, bearing in mind you need your money to las he distance in retirement 9. Buying a new vehicle When you roti it's vry tempting to use your super to buy a naw car lo last you ‘through your rtivement. you're serious bout watching where your monay goes, you might want to think about making your Ccurent vehicle last abit longer, but you Rood to woigh up tho maintenance costs versus buying another one. Your rolroment isin your hands, 50 try ‘ormaks the mast of the money you've {got and invest wisely to make it ast. B don't forget to take cara of your haath to give yoursatf the best chance of going the tistance in retirement, “To find out more about planning for a comfortable retirens Us today. ent,Tax-deductible superannuation contributions explained Did you know you can claim a tax deduction on certain super contributions when you do your tax return? Whether youre employed, set-employed, unemployed or reli, you might ba aigible to claim a tax deduction on your after-tax super contributions. ‘Atortax super contributions are voluntary payments made into your super and don't include compulsory superannuation guarantoo or salary sactiice contributions. How do I make a tax-deductible super contribution? “There are various ways to make an after-tax super contribution, including using money from your salary, savings, or the proceeds trom an asset sale, When you contribute these funds to your super, you can claim a ‘tax deduction on the amount when you do your annwal tax return What are some of the benefits? Pring money into super and claiming as 2 tax deduction may be beneficial if you receive xtta income that would othorwie atvact personal income tax fas ths is often higher, Similarly, i youve sold an asset subjact to capital gains tax, you may contibute some or all ofthat money and ciaim it as 1 docluction, This could reduce or even ciiminate the capital gains tax owed, What do I need to do to claim a tax deduction on a super contribution? Make an after-tax contribution to your super While you can contibute any amount, ‘concassional contibutions are capped at $27,500 per financial year. In some cases, Yyou can make catch-up concessional contributions, but it's Important to chack ‘because if ou exceed the cap, additional tax may apply. Lodge a form with your super fund ‘The next step sto lodge a notice of intent form with your super fund, which wal acknowiedge reesiot in wring, Important, you shouldnt make ary withdrawals, rollovers or tansters to pension before your ‘otic of itont form has boon lodged, as tis ‘may reduce or invalidate the tax deduction. Have the paperwork ready when you do your tax return ‘Once the financial year ands, you can prepare ‘and lodge your tax retum using the written ‘acknowledgement from your suner fund. Are there other things that I should keep in mind? Your age Facent changes to super have removed the rood to moet a ‘work test’ before making ‘a personal contribution or under a salary sacrifice arrangement, However, i you are 67-74, you must mest the ‘work test’ to claim ‘a dedluction on persanal supar contributions: ‘The ‘work tes’ requirements state that you must be employed or self-employed for 40 hours over 30 consecutive daye in the financial year where contributions are made Cor meet the work test exemption rues, For the work test exemption, you must mest three conditions: ~ You met the work test in the financial yoar before contributing, = Your total super balance is loss than $300,000 at the end of the previous financial year. = You did not use the werk tast ‘exemption in a previous financial year. Contribution limits It youre claiming a deduction for an after ‘ax super contribution, the contribution will count towards your concessional contributions cap {$27,500 per year). Note that you may be algibl to contribute ‘more if you have unused concessional Contributions from previous financial years Importantiy, other contributions also count towards the concessional convibutions cap, including: = Compulsory SG contributions Salary saertice contributions Other contribution incentives ‘Aftor-tax supar contributions that you claim 1 tax deduction for won't be eligble for a super co-contibution from the government. When you can access super ‘The Government sete rues around when you can access your super, Generally, you won't be able to access this mony untl you've reached your preservation age and retired, Super returns aren't guaranteed “The value of your imestment in super can fluctuate, Before making extra contributions, make sure you understand the risks Contact us to find out about ther ways you can contribute to your super. | hv ate. go uncuserSupern deta ‘Growing your eruper contnbutons 00 tochvesr meses 0 [© ANI Serene Ply Lic Garena at May 2028,