ANZ Smart Choice Super Investor Update : Member Update Autumn 2014
14 At its most basic form, superannuation is a disciplined long-term vehicle for us to save towards a better retirement. However, there’s a tendency to assume that what our employer contributes into our account is where super starts and ends. The reality is that for many of us, relying on these payments alone may not be enough to fund the lifestyle we desire. Many Australians remain reluctant to top up their super, particularly earlier in their working lives – due perhaps to the feeling that retirement can seem a long way off, a lack of realisation that it is actually their money, or general confusion surrounding how to contribute to super. Along with complex industry jargon, shifting legislation and the technicalities of taxation, it is enough to put off most people. By breaking down the complexity, we can hopefully provide you the basics to properly understand your options when it comes to making contributions to your superannuation. Contributions There are two basic types of contribution categories: Before-tax (or concessional) and After-tax (or non-concessional). *Age at the end of the relevant financial year 1. Before-tax contributions These are known as ‘concessional’ contributions Generally, this is a most tax-effective way to contribute to your super In most cases, taxed at just 15% - which can be significantly lower than your marginal tax rate Types of concessional contributions include: - The 9.25% Superannuation Guarantee (or SG) payments generally made by your employer (increasing to 9.5% in 2014/15) - Salary sacrifice payments done through your employer - Personal contributions you make (for which the ATO allows a tax deduction , for example - commonly sole traders). There are limits that restrict how much you and your employer can contribute each year: - If you’re under 60* you can contribute up to $25,000. From 1 July 2014, if you’re under 50*, the limit will be increased to $30,000. - For those 60* plus, it is currently $35,000. However, from 1 July 2014, those aged 50* or more will receive this higher limit. Understanding contributions 14 Salary sacrifice can be an effective way to boost your super. It’s an agreement between you and your employer, so check with them first to see if it’s an available option for you. You can read more about salary sacrifice by accessing our Spring 2013 Member Update.
Member Update Summer 2014
Member Update Winter 2014