Extra super contributions?

@Cimbom if you are aps or ps up you can salary sacrifice through someone like smart salary...

 

Invest it outside Super for best tax effectiveness. Note there’s no / minimal CGT when withdrawing a set percent to meet minimum pension requirement. But importantly the cost base will be reset when reinvesting it outside Super. You’d need to check but from memory I think you can do an in-specie transfer of shares in SMSF to own name to meet pension withdrawal?

Note that you’d be getting on a bit before having to sell assets to meet min pension withdrawal requirement if you focused on shares / funds which pay a decent dividend plus franking. Franking credits are fully refunded with a tax free pension so it’s the gross dividend that you’d look at. Getting near 6% gross income would not be difficult so you’d be around 80 before potentially having to start withdrawing much in the way of capital.



Finally if tax outside Super is a concern then you could always roll your pension back into Accumulation mode (taxed at 15%) so it stays there till you want to withdraw some and / or drop dead.

 

You can do all of that, at present a superannuant can have an income around $24,000 before paying tax.

Up to age 75 you may be able to recycle it back into your super fund as a non concessional contribution.

 

Let's hope none of these rules changes over the next 20+ years. But something inside me tells me it is wishful thinking

Cheers,
Oracle

 

Governments moving the goal posts, Never

 

Seriously though, there is an easy way to dump an extra $300k into your super.

If you are 65 years old or over and meet the eligibility requirements, you may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

Your downsizer contribution will not count towards your contributions caps or be affected by the total superannuation balance test in the year you make it.​

Downsizing contributions into superannuation

And it doesn't have to be the house you are living in. Just one that has been your main residence at some point. Lot's of rule. See the link.

 

When you get to 95......trust me you'll have other things to worry about

 

It depends. My neighbour is so old, she is practically dead and walking every day. 2 of my grandparents lived to late 90s as well. With advances in medical technology, who knows?

 

Most SC provider have what they call a minimum and maximum fee if you do just small salary sacrifices then it not really worth it
But if you add other stuff in like car, computer, phone, child care etc.., then the fee isn’t an issue or contribute larger amount like 10k extra a year

 

extra super is much better via salary sacrificed else you better off putting the extra money into your mortgage, tax-free earning of 4-5% equal to 6-7% pre-tax

 

Put it back to the employer - they chose to outsource, they can pay the packaging costs.

 

Why would you sell a post CGT asset and incur a tax liability today to only lock up a small % of the realised funds in a tax-free environment?

Sure, I might consider it if compelled to sell the ppor if it no longer met my requirements but is an extra 12 years of contributions in a lump sum worth it (possibly also bring forward 3 years non-concessional contributions too).

 

Good points. It is not going to work for everyone. Obviously you would not sell your PPoR if you want to keep living there. But you could want to upsize, downsize or move. You may also want to sell a former PPoR that is now an I.P. for lots of reasons. I have done that in the past. Other than that, you would not do it

 

It is an easy way to get a quick $600 000 (or $1.2m with your partner) into a tax free environment if you've left your run a little late.

 

It will definitely work for some. My mum has no super but lives in a house that will be too large for her long term. When she sells to downsize we will look at this option.

I have sold a PPoR that became an IP in the past because it was low yeilding, to release equity and pay down debt and because it was good timing in the cycle to sell.

 

People start to spend less after a certain age. What do you need to spend money on when you're 95?

 

That's concessional, you're allowed to tip non concessional funds in too

 

Skydiving?

 

Trust us cynical folks on PC to turn a discussion about what someone in the retirement might do with their spare cash, after being unable to spend as much as they withdraw, into a whinge or worry

 

Depends. Some are still active and traveling at 95. Some stuck in a nursing home doing nothing. Obviously the nursing home patients will be spending less.