Super for Lazy People - how to grow it if you don't want to SMSF

SMSF it is then...

 

Heinz....
Ich bin ein fauler Kerl ...so yes SMSF but only within a Industry fund...

Perhaps the secret is in Crypto like Mr Birch suggests.....

Nathan Birch defaulting on IP mortgages...

 

You know you want to...

 

Do I Herr Heinz?

 

Mensch Meier!

Well, OK serious.

I think you are where I am. Planning a comfortable retirement and realising the fruits of your labours have generated a potential (possibly substantial) income stream called "Super".

Accustomed to generating your own wealth through research and hard work you have left this pot of money in the hands of so called experts- maybe a bank - who have extracted large fees in the name of what's best for you. Now for a self made entrepreneur this won't sit well.

So maybe I am calling you out, in jest perhaps, because no union or bank fund is ultimately going to deliver what you need?

Disclaimers

1. Not licenced to give directions to the end of the street let alone financial advice
2. My Welsh is better than my German

 

You forgot lazy.......I stumbled around and landed a single pot of gold at the end of the rainbow....now I am wracking my brain on how to take this darn thing called super and transfer some of my property wealth and still sit under the $1.6m threshold..whilst avoiding schitzo things called pollies who keep meddlin'

 

See post #65

 

Another Esuperfund user and very pleased with the platform, pricing and support.

I am the epitome of lazy and it took less than 30 minutes to complete the yearly paperwork.

 

Question regarding the $1.6M cap. Is this the total amount that can be contributed to your super fund over your working life and includes employer contributions, concessional and non-concessional contributions (any other ways that I can't think of?). Or is it just the max you can contribute yourself i.e. does not include employer contributions?
What if the earnings take the balance over the $1.6M but your contributions are under this amount?
Thanks

 

Hello to the can of worms @Tony.

From what I have seen, the $1.6M cap is just that irrespective of how it got there. A link to what can be totally confusing information provided by the ATO.

Total superannuation balance

That $1.6m is the tax-free limit. Amounts above that are subject to a tax on the funds earnings. Say the fund is $1.7m. The "extra" earns 4%, i.e. $4,000, so the tax would be $600 @ 15%.

My understanding but I could be wrong as usual. Been trying to get my head to stop hurting over it.

 

@Tony - $1.6m is the individual tax free threshold for your pension phase. Any income above that gets taxed at 15%.

So, yes you can still have as much as you want in your fund but now, the larger accounts will pay tax on some of their income.

 

All contributions is my understanding (concessional plus non-concessional) plus earnings.

Thus why I want to leave the non-concessional till later...though understand there will be a risk it might get removed if the goobermint makes changes.

Note that I believe the $1.6m is indexed..but only make changes when inflation takes up and is done in 100k lots as inflation takes it that. That is what I understand.

 

Thanks - thinking of it more as a threshold above which you will be taxed makes sense. Do you know if there are then brackets above $1.6m al la income tax or is it flat at 15% above the $1.6m

 

@Tony - AFAIK it's flat but it is a generous threshold.

 

Yeah, if my understanding is right, which it may not be of course, say a super fund is $2m or $400k "extra".

If the fund earns 4% total that's $80k, and on the $400k "extra", as the earnings would be apportioned I assume, it's $16k and the tax payable on that @ 15% would be $2.4k.

Don't hold me to those figures as I do get things horribly wrong.

Oh, and if the whole lot is franked at 30%, that $16k would attract a franking credit of $6,857, so the fund would get an additional $4,457 back plus the franking in respect of the $64k ($80k-$16k).

It would almost be funny if a fund running right close to the edge was tipped over due to refund of franking credits. I did qualify by saying almost funny.

 

One thing that is often misunderstood. $1.6 Mil is the maximum “COMMENCEMENT” value allowed for a tax free pension. Once commenced the pension growth is also tax free. So if $1.6 Mil grows to $4 Mil over time the same tax free status applies.

 

You're right @Nodrog. Thank goodness someone has got their brain cells working today because I surely haven't.

 

He he, I can assure you the little grey cells are not feeling too sharp today. But I did spend an enormous amount of time researching the Super changes particularly what impacted us from when first proposed until implemented.

 

My mind is stuffed due to being sober - again.

In case anybody is wondering how "simple" the new simplified arrangements are you may be fascinated to know the Explanatory Memorandum released by the ATO at the time associated with this s#it ran to around 70 pages. Plus there is a number of companion law guides. Sigh*