Currently no superannuation strategy - do I need one yet?

I'm surprised that you can get better returns from cash. Do you mean using cash for property deposits.

 

Yes, if I had $100k and invested it, and you had $100k and put it into super, I'd bet that after 5 years I'd have turned my $100k into more than your super fund manager has

 

That's a lofty goal, what sort of guarantee can you provide? You could very well lose that $100k cash.

 

No guarantees But no guarantees some fund manager won't lose it either, right?

I work with plenty of asset/fund managers - most of them paid $200k+ and make some ridiculous decisions and waste money like crazy but couldn't care less (because it's not their money). I'd like to think I care more about my money than anyone else does.

 

One major difference is the different compounding because of tax differences.
You make $100,000 outside of super you might pay $47,000 in tax and have $53,000 to reinvest.
inside super you would have $15,000 in tax and $85,000 to invest.

This is irrespective of the returns.

Do this over 10 to 20 years and you can imagine what the difference would be.

 

Good point Terry, yep unfortunately I'm paying 46 cents in the dollar at the moment.

I'd like to access the money before 65 though (or whatever the age is). I guess for now I should just put some of my super funds in more aggressive options and be done with it?

 

60.

But why? Couldn't you just access other money outside of super instead and keep the super for when you reach 60?

 

Since when, I made 96k last year and paid 25k in tax.

 

In profits or salary? In your Super or outside of Super? The tax rate is different for different purposes

 

26% so probably CG.

Odd. People pay tax because they have had a bloody good income in the previous FY, they knew they had a bloody good income yet express some outrage when it's reasonable they would know they will have to pay additional tax.

I'd rather focus on where to place the remaining c 75% of the profit along with the capital which produced that profit.

 

I cant get my head around employees on decent salaries who refuse to salary sacrifice up to the $25k cap which could be taxed at 15%, then complain about paying marginal taxes.

Anyway I'll wait for the poster's response.

 

Il be honest I have never actually thought about it. At my age still have 36 years before I can touch it

Has anyone done any modelling around salary sacrificing if your on 100k, and the difference it would make to your net pay each month?

I'm sure their must be a balance between adding more into super without any effect to your take home pay?

 

You may wish to fool around plonking some numbers into this until you reach the 25k max.

pay calculator

Oops, wrong calculator.

Try this one from Bridges

Salary sacrifice calculator

 

Legend, thanks @SatayKing

 

No probs. Easy as.

Brings to mind a situation years ago how one person I knew worked the numbers to his family's advantage. Before the introduction of the GST, anything above $50k pa was taxed at 47% (plus Medicare levy.)

He paid off his mortgage and then salary sacrificed the pre-tax equivalent. Told me the net effect of his take-home pay was about $15. However, his overall cash flow improved as they were no longer paying the mortgage from the after-tax income e.g. gave up $15 in order to no longer pay, say, $250 per fortnight mortgage payments.

While the tax thresholds and mortgage payments of course are now vastly different that type of approach may still work for some. It's a numbers game.

 

PAYG, wages + **** load of overtime.

Looks like I overpaid too, so should be getting a healthy refund with all my other deductions as well.

This is disregarding super.

 

I am talking investment income. You cannot divert your wage to a Superfund other than $25k including employer contributions.

You would be paying 39% tax at least on any investment earnings on top of your income. 24% more than a superfund.

 

Ahh, I see, so you find out what your profits are on a deal, and contribute that to super instead of to the tax man, good stuff, definitely food for thought.

 

Ah, I see. Probably the payroll system is the usual one where it calculates the tax for that pay period as if any overtime is included is what you'd normally earn per pay period.

 

Not really

You just compare the different tax outcomes using different structures and work out what the different compounding could look like by paying less tax.