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the best vadvidse is retire in indonesia , that is the only sustainable retirement no matter if you got 1 million in superanuation it will be not enough to retire in Australia unless you live in your car
It’s like everything here in Australia 🇦🇺 we are penalised and dictated to by our government Wonder why everyone in this country is disgruntled and totally unhappy with our system we have
Thanks Chris Could you also please cover what a Condition of Release rule means when reaching the Preservation Age for those under age 60 and for those who are age 60 plus when accessing their funds. This wasn’t covered and was a bit misleading!
Your explanation is very good & to the point. It still surprises me in the comment section how many people still get it wrong. Imagine if there was no Superannuation Scheme & everyone would have to rely on themselves for their own retirement funds - most of us would not save anything at all, plus the Governement is giving us Tax incentives to do so. Yet people still complain.
You do realise the government brought in the Super Scheme so people pay for their own retirement instead of the government paying them the aged pension? An aged pension they contributed to by paying taxes their entire working life... yet there was no reduction in those taxes being paid. And then to add insult to injury, they then want to tax your retirement money as well. Government: "We don't want to pay an aged pension for you in your retirement any more, even though that's one of the reasons you paid the taxes you did for your entire working life, so here's the Super Scheme (that you'll pay for)! But we'll keep taking the money you pay in taxes that was meant to cover that anyway, thanks. Oh, you have your own money for your retirement now? I'll have some of that, too, thanks!"
In a static world your would be correct. Unfortunately when socialism is in full swing they categorize anyone with a money storage, super account, or house as rich. Unthinkable 20 years ago. Everybody with something will become a target to involuntary take part of a wealth distribution program. The system you refering to as robust and fair was perfect for 1 or 2 generations and government with charismatic leaders and calibre. These people today are not at eyeheight with the working and middle class. They are butchers with MBA's talking about a phantasy direction, and modeling some unrealistic nonsens without funding. The Superfund is sticking out to be the next road kill, and then they keep marching on.
Terrific information as usual, thanks Chris. I have recently sold my Sydney home and bought cheaper in the regions. I was pleased to see your tip on carrying forward concessional contributions as this is a great way to move cash from banks to gain tax advantage in Super.
Worked in the Super industry (software side) for years and understood the 'business rules' around all this, but this explanation is the best I have seen that breaks it down and makes it understandable.
Those tax free lump sum payments can bite you. We took out a lump sum after turning 60 to do some house repairs. At the end of the tax year we got a bill from the Tax office, apparently that lump sum might be tax free, but it is still considered taxable income, we had to pay back about 3 grand, as the lump sum was enough to mean we didnt get a rebate on our medical insurance that year, and we had to pay back the amount of the rebate that had been applied to our contributions.
I agree, it sucks. They already get contributions tax on top of our income tax each month while we are working, then they want to charge us again at the end of our career when we withdraw !
That is correct I stopped working 3 years ago because of a medical condition and drew all of my super and was taxed 22 % plus.1.5% Medicare, screwed me completely
@@frederickgent1918 you think you got it bad, As. a dual US/AUS citizen the USA insists they can tax my super at full rate because as far as they are concerned it is just an invesment account.
I'm about to turn 64 and have been thinking about what happens if I was to die. I have my two adult children nominated to share my super after I die. However I didn't realise that if I die and they get my super they have to pay tax on those amounts. If I withdraw my super when I'm alive and pass the money on they receive it tax free. Seems crazy to me the scenarios are treated so differently. I've read about things you can put in place to stop that but they seem just so contrived. Can you do a video on this issue?
Look at creating a testamentary trust within your will and make your children beneficiaries of that. This way they are less impacted by tax, and are also protected by the trust in other ways.
I didn't have to pay income tax on my Fathers super when he passed. but the ATO comes come with their hand out for 15% + Medicare levy. Anyone that says there isn't a death tax is lying to you.
Dependent on how much you have in your Super Pension and how it impacts Centrelink Payments - there comes a point where it makes no difference on tax or centrelink whether it is in Super or not, then it would make sense to pull out your Super so it doesn't affect your kids on your death. Most Super Pensions invest into managed funds - you can do the same outside Super. You would also have higher earnings as the fees tend to be lower outside of Super. There also isn't a min pension payment and you can keep you funds invested if you want.
Every one should be eligible to get the Government Pension like in the old days. Other countries like NZ,gives everyone a pension, but here in Australia they have such a ridiculous low threshold that even a very low earner will reach it
@fc7424 Thanks for the info. My problem is my wife still works and will be doing so for at least the next ten years. Because the threshold is so very low my wife exceeds it by at least thirty percent. Not that she is a high earner and even unskilled workers earn easily more than the threshold. The pension threshold in my opinion, made very low to deny people who have worked all there lives a chance of getting it
We had a system, many decades ago, where everyone contributed. Over time it accumulated a significant pool of money. Then, a mismanaged cash strapped Menzies government got its greedy eyes on it and absorbed the lot of it into consolidated revenue.
Good info as always Chris! Do you have any info on reducing CGT on an investment property before retiring Vs keeping it as a passive income stream (especially if the house was purchased post 1985 for $100k and now valued at $1.2M? We’re 5 years away from retirement and salary sacrificing like crazy to top up before we TTR. ✌🏻 Cheers!
It’s stressful knowing how much tax we face in Australia. However after a recent trip to SE Asia where the footpaths were unwalkable & broken, no adequate ambulance service or garbage/sanitary services……I’m happy to pay tax. The average Aussie has a fantastic quality of life, I wouldn’t trade.
Tip 1 - I don't know anyone who could suddenly make $150k of carry forward contributions. You'd have to have been unemployed or seriously underemployed for 5 years before then having $150k spare money. Would need a lotto win or an inheritance, but then you'd choose undeducted contribution instead.
We probably have at least one client a week in this situation. Self employed person/non-working spouse who sold an investment property are two examples.
@@marko1314 You mean the smart bitcoin players who are now serving very long jail sentences, or do you mean those who lost all their bitcoins in exchange failures? Nothing smart about bitcoin gamblers, some were lucky, many were not.
It's not taxed again - employer contributions going in are taxed going in at 15%, personal contributuons are taxed only if you claim a tax deduction. Earnings on your Super is Taxed at 15% but this is only on new money not exisiting. After age 60 it's tax free for the majority of Australians (there are a few minor exeptions, normally gorvenment fund who have not been taxed previously).
@@kachdragonfly quite right you are . Paying tax on what you invest or stick in the bank is inappropriate. Why should you be punished for taking on all the risk. Government has to provide you with an alternative if it decides to take your money without asking. Fuck em. I earn 18 k in Aus and the rest is oversees in my wife’s account and she ain’t a resident and I’m dual resident. I have a house in another country and I have a flat in mellbourne and they can take me court before I pay one penny of tax. It’s nonsense
Turned 60 switched out of accumulation to pension. I received a 4% mandatory payment from my financial advisor then reinvested 1/2 back into super. Tax was $2.5k but got back $17k from ATO. It helps having a lawyer, financial adviser and accountant all on the same page. I got a 13% return last year and just got and from my advisor to hurry up and spend more because your ex dividend and more is coming through. Seriously WTH do you do with it, we own two houses and are both tight arse boomers because of the 90s. We planned to have security but being tight for so long is hard to spend it.
Still confused by this tax system. I turn 60 in 2025. What do I do then ? Do I get my super money ($130,000) in full if I want it all in full, or not ? Seems the tax department will have their hand out.
The period between 60 and 65 is tricky. Statistically I think this is where most people can still enjoy life in full. After 65 it gets harder health etc. There are three choices at 60 if I understood it correctly. A - Fully retire then use superannuation tax free including earnings B - Work in jobs people hate and establish TTR and use jobn income to boost super till tax free threshold and draw minimum to TTR free tax C - Same as B except changing job you hate income to activity you love income. This is where it gets tricky on definition of "employment".
At 60, you can meet a condition of release by "ceasing an employment arrangement", so this does not necessarily need to be retirement. You could also cease one employment arrangement (if you had 2 in place) and this would also satisfy this condition. The options are listed in this article if you're interested -> superguy.com.au/accessing-superannuation/
the ato is confusing "The unused cap amounts you can carry forward depends on the amount you have contributed in previous years, starting from 2018-19. You can carry forward unused cap amounts from up to 5 previous financial years, including when you were not a member of a super fund. Unused cap amounts are available for 5 years and expire after this. For example, a 2019-20 unused cap amount that is not used by the end of 2024-25 will expire." ie the first 5 previous the second 5 total
Yes, that is the first $27,500 in my calc. It is only 5 yrs of contribution caps I can carry forward. Even if I add the 2024/25 cap $30k and drop the 2019/20 $25k cap I still only get $137,500
Hi there. Thanks for the tips. So what you’re saying is that withdrawals from a TTR pension are tax free after 60, but investment earnings from the TTR pension account are not?
Good video- Question- I'm a bit dirty on the fact that must withdraw 4% After 60. I feel this is overreach. I intend to withdraw all my super as a lump sum at this point, but I'm worried how it will be viewed regarding anything to do with assets testing, like getting the aged pension down the track. What are the ramifications of lump sum withdrawals? I just can't stand the thought of the government telling me how much of my own money I must withdraw from my stack each year. In a falling market I wouldn't take ANY!
You could always reinvest what you don’t need to live on outside of super. As long as returns you earn on investments stay under the tax free threshold you won’t pay tax
Withdrawing all your super and losing the tax free benefits seems like an extreme response to the minimum drawdown requirements. I hear you though on the requirement to sell in a falling market. In the 2008 GFC (Labor) and 2020 COVID (Coalition) the government halved the minimum drawdown level. Admittedly, these were extreme events, and there is no guarantee this would be repeated in a more moderate market decline in the future.
True, I just don't understand why they'd even set a minimum? 4%can easily fail for smaller balances, especially if you have a scare at the start of retirement, and then follow the pied piper down the 'bonds are safe' path. Either I'll make most of my super gets passed down-which is why I'm doing it? Government's wishes be damned. @@andrewmcalister3462
@@andrewmcalister3462Hi Buddy sorry to chip in but the person who want or has the potential/possibility to take all the money out of super is well worth in my personal opinion the reason is very simple all our superfumd are invested in directly correlated and over inflated assets like stocks bonds ETF, housing, Bitcoin etc. As the economy today is basically debt consolidation which It is now a certainty that he will be unpaid. Who wants to leave their savings with these scoundrels?
@@Enthusiasmisgood "Assuming you’ve never used..." So if a thief steals your money then throws you a slice of bread in return that suddenly makes it ok?
I receive a "invalidity pension" from the Commonwealth Superannuation Corporation under Military Superannuation Benefits Scheme, they call it a pension and even though it is in reality a lump sum payment they and the ATO continue to call it a "defined benefit". The day I turned 60 my tax dropped dramatically, from memory it went from $330 f/n to $140 f/n, but I still pay tax, and my group certificate or whatever they call them these days has a "taxed element" listed and the tax free component is listed as NIL. Should I be still be paying tax?
Another fantastic clear explanation. Thank you, Chris I just have a quick question. Am I able to use the capital gains from a property that I'm selling to invest into my superannuation fund? I'm aware of the 5-year going back on concessional contributions and the 3-year bring forward rule on the non-conceptional and would like to take advantage of that.
Are you over 55 and owned the property for more than 10 years? I believe there is a special case for that scenario that allows you to contribute to $300k of the house sale proceeds. Look it up.
@@lynettejwhite yeah thanks for that. I've done a lot of looking up and that's why I'm asking here. I'm looking for a clear answer. But to be quiet, honest, I don't think your question about age and how long you been on the property for is relevant. I may be wrong but I've not seen things like that as part of my research.
@@lynettejwhite Thanks but downsizer contributions are directly related to the sale of your principal place of residence. I would not be subject to capital gains tax on my principal place of residence. But I'm happy to have you clarify if I'm missing something.
I have a different situation.....I am 74 and do not receive a aged pension because?........My wife is 65 and still working.....She does NOT share her income with ( nor should she have to) me I have a place to stay, and food to eat, but no money to spend on anything.....tough luck eh?
If you don't believe your wife needs to share her income with you, then logically you would probably agree that no one else in the country should have to either, because that's how the Age Pension is funded.
We are 70 years old , both my wife and I . Do We have to pay tax when downsize my resident home to a small unit and put money in my superannuation as allowed to maximum 300,00 each and if tax is how much . Thanks
You pay no tax when selling your personal residence. There may not be any advantage putting it into Super as investments in Super & outside super is assessed the same Under Centrelink rules. Best to get advice before making a large contribution into Super.
Everyone agrees that a victim should do everything they can to get out of an abusive relationship..... except when the abuser is the ATO and government
While in accumulation, I understand your super is safe from all but your wife. Is it still safe from creditors and government once transferred to a super administered pension fund.
As I understand it, the super fund is not bound to comply with your nominated beneficiaries and rely more on dependency, Also, a wife seeking a divorce can have her solicitor include super into the mix of assets split.@@Hakucho64
Hi Chris, if I have unused carry forward concessional contributions , but my super > $500K , at age 60 , can I declare retirement , withdraw a lump sum so my balance
Hi Chris, I’m 60 but still working full time and have my own SMSF. Can I start receiving a tax free pension now such that tax on my investment earnings is reduced to zero?
Hi Chris, Lets assume I have $1million + in super at age 65 . If I don't intend to retire until I turn 67/68, rather than leave in accumulation should I commence a pension at 65 leaving a small amount in accumulation for future contributions. My plan would be to withdraw $120,000 P/A from pension then reinvest back into accumulation as non concessional to reduced the taxed component on my death. Also I would be saving the 15% tax on earnings in the pension phase. It seems like a win win for me. I have I got this right? Cheers Mate.
My understanding is that would only be in the accumulation account which is the very same account before the pension. The pension account would be tax free. Once your 65 your pretty much free to what you want with your money.@@billk9856
The plan you laid out is a TTR where you can draw down between 4-10% of you Super per annum (based on your 1st July balance). Leaving the smaller balance in the accumulation account to add more as you continue to work. You won’t be able to do the lump sum reinvest because your account balance is over $500k, but your employer can still make the standard SG payments as always.
Ouch I was told by my super accountant that in TTR i would not be taxed on super earnings. Self managed super with property investments. Can you confirm?
It sounds like they might need to remove the term 'super' and 'accountant' from their title! In saying that, earnings within a TTR pension were tax free prior to 2017, but haven't been ever since.
For some of us that were born after a certain year I didn't think we could pull any Super out until the age of 67. Are there age conditions on pulling Super out at 60?
Hi Chris, I'll be 61 in a few months. I only work 3 days a week and want to start TTR to supplement the income. I want to retire when turned 65, my question is when I retired can I do lump sum withdrawal? Thanks. Danny
Hi Chris, Regarding untaxed contributions by employer via defined benefit of tax that wasn't paid employer. Once you have meet the conditions to access the super and convert it to pension phase. When does the taxable component is paid/apply? What is the tax rate? Or is it included in your yearly income ATO assessment? Cheers Adam PS Thanks for the Video😁👍
My wife is in a defined benefit too and you pay the tax upon each withdrawal (if no tax was paid when it was going in). The tax rate depends on what your tax bracket for that financial year though so it could be between 15-30%. Ask your accountant to confirm the rate for you mate. ✌🏻
can you do a video about the triple change on July 1? SG goes up 0.5% tax cuts kick in giving a net pay rise the super limit goes up to 30k p.a. will be interesting to see what happens to net pay if salary sacrifice goes from 27.5k to 30k given the extra SG and tax cut
How did we get to the '$150k or more 'carry forward concessional deduction? At year end 2024 the max contribution would be $132,500 (27,500+27,500+27,500+25,000+25000)?
Chris says that super earnings are tax free after 60 once you move from an accumulation account to a pension account. I'm not entirely sure that's true. I am receiving a government defined benefit pension and the notional balance of that pension account exceeds the Transfer Balance Cap (TBC). Consequently, I've been told that my lump sum component that's still in an accumulation account can never receive tax free earnings even if I move it into a pension account. 🤔
@@SuperGuyAu what specifically is contradictory? I checked the ATO website and it says that the Transfer Balance Cap is the maximum amount that can be converted to a tax free pension. Any excess above the TBC continues to have its earnings taxed at 15%. The TBC was $1.7M when I retired in Feb 22 and my total super bal was approx $2.6M - so I have an excess above the TBC that continues to have earnings taxed at 15%.
At 7.25, you said income and capital gains become tax free. I assume this is how they are assessed when paid after 60 from pension phase. Earlier you said, that the fund is comprised of taxed and tax free components. My questions is in the event of death and proceeds going to beneficiaries, are the unpaid " interest and capital gains" still assessed as tax free in the hands of beneficiaries or will they have to pay tax at their marginal rate on this component along with other taxed components.
Hi Guy, that means at the age of 60, someone need to call their superfund to transfer into Pension Fund? What is Pension Fund itself? If the person is still working at the age of 60 and contribute salary sacrifice monthly, will that be taxed at 15 pct? Thank you.
Thank you. To reconfirm, either below 60 or 60 and over, as long as it is salary sacrifice, we have to pay tax 15 pct? In regards of pension accounts at the age of 60, can it be open while someone is still working full time? Or should the person retired first? Thank you again. Appreciated.
Really appreciate your content, very informative. If we sell our investment property for 100k profit and split profit to 50k each and reduce CGT to 25k each because we have held for over 10 years.? can we put that 25k into super using carry forward contributions so as not having to pay income tax and just pay 15% contributions tax into super ?
Chris. Lets say you have $600k in SMSF owned by family super trust. And lets say you hit 60 in 2 years (so by then there will be eat least $800k). And lets say your income is from full time employment. The rules around "employment" once you hit 60 apply also if you have hobby income or you start your own company income doing what you love instead of earning heaps more doing what you hate? Basically are there any income types (apart of salary) that do not attract tax rules? after 60.
A tradesman I worked with in 2010 done this. He spoke to the employer, they made him redundant paying out all entitlements. He then withdrew money from super to pay off his mortgage and was re-employed weeks later. Things still seem structured in a way that would still make this possible I believe
You can, however, the maximum you can draw down is 4-10% p.a unless you roll everything over to Pension Income Stream and then you can withdraw whatever amount you want.
Hello you video has confused me a little I have just got of the phone to Australian super and they inform me that is i was to close my account and take all money that it would be tax free ? further more that if i was to die that my beneficiaries would have the money tax free ? I will be 62 in October .The lady on the phone stated that the money falls all in one category even that i did salary sacrifice and put my own money in I guess i have it wrong when you talk of the different categories and the different taxes you will pay for each ? regards ron
Be careful getting super and tax advice from a call desk. I'm sure their intentions are good, but they are not licensed or educated to be providing personal financial advice.
So if you have reached 60 and I setup all my $700K super into retirement fund with a withdrawl of %5 per year. I then start work part time to earn 18K per year does the tax department add my tax free income stream to my 18K a year part time job together, to come up with a taxable amount?
Hi Chris, can I assume then that everyone with superannuation in accum accounts should convert to an account based pension at aged 60, just to get that extra 15% on earnings. Even if they don't need the money they can always recontribute back to super ?
Thanks Chris, is because I take advantage for carry-forward unused concessional contributions for tax deduction purpose in my working life, then this becomes taxable components in the total super balance and subject to 15% tax rate? But if I only withdraw after 60 years old, which means this 15% does not apply. Is this correct? I am not too sure whether I should use this unused carry-forward concessional contribution because I don't want to pay extra tax later on. Please advise. Thanks again.
If my wife and I own IP using smsf, she is older than I am by a few years, can we sell the house once she is at preservation age of 60, who must we wait until we’re both 60?
Selling your IP in you SMSF will still attract CGT tax after age 60. Only after you convert to pension stage will the earnigs be tax free in your SMSF. Talk to your accountant before you make such a move.
Once your accumulation account turns into a pension account, does anybody know if it continues to generate returns at a similar rate as the accumulation phase? Therefore, if it was generating a return of 8% for example, and you were receiving 4% per annum as your pension, it is possible that your pension balance could actually continue to increase year on year? Hope that makes sense 😁
The standard non-concessional (after-tax) contribution cap is $110,000 per year. The concessional (deductible) contribution cap is $27,500 per year (as at the time of writing).
@@ArmySigs That's an idea, might do that. The only thing that might make me home sick is missing seeing those facial and number plate recognition cameras at all the intersections here in Australia, which were installed the two years during covaids, o wait they came from china anyway. Not so bad after all.
What I get upset about is how there are different rules for politicians vs the rest of us. When they retire, the get their income as their pension for life and indexed each year. If they have investment properties and an income stream from these properties, they get to keep that and also they can get another job and make more money. If we did that, the pension is cut off. Double standards for those that mismanage the states and country.
Yup Australian government collect so much tax just to donate it to other countries. While Aussies suffer, and to top that Australia have so much resources like gas, coal, oil but sell it to other countries for pennies, while Australians pay so much.
Hey everyone, thanks for watching! Ready to take control of your retirement? Download our FREE 6-Step Superannuation Check today: www.superguy.com.au/super-tips/
the best vadvidse is retire in indonesia , that is the only sustainable retirement no matter if you got 1 million in superanuation it will be not enough to retire in Australia unless you live in your car
Why is the superannuation so complicated in Australia, it is almost like the government wants to try and trip you up to get more tax from you.
Yes. There’s always an ulterior motive
Exactly!
It’s like everything here in Australia 🇦🇺 we are penalised and dictated to by our government
Wonder why everyone in this country is disgruntled and totally unhappy with our system we have
There always needs to be loopholes for the favoured.
not all that complicated really.
Thanks for this Chris. I've been looking for exactly this information, but have struggled to find it concisely in one place. Much appreciated.
Thanks Chris
Could you also please cover what a Condition of Release rule means when reaching the Preservation Age for those under age 60 and for those who are age 60 plus when accessing their funds. This wasn’t covered and was a bit misleading!
Your explanation is very good & to the point. It still surprises me in the comment section how many people still get it wrong. Imagine if there was no Superannuation Scheme & everyone would have to rely on themselves for their own retirement funds - most of us would not save anything at all, plus the Governement is giving us Tax incentives to do so. Yet people still complain.
You do realise the government brought in the Super Scheme so people pay for their own retirement instead of the government paying them the aged pension? An aged pension they contributed to by paying taxes their entire working life... yet there was no reduction in those taxes being paid. And then to add insult to injury, they then want to tax your retirement money as well. Government: "We don't want to pay an aged pension for you in your retirement any more, even though that's one of the reasons you paid the taxes you did for your entire working life, so here's the Super Scheme (that you'll pay for)! But we'll keep taking the money you pay in taxes that was meant to cover that anyway, thanks. Oh, you have your own money for your retirement now? I'll have some of that, too, thanks!"
In a static world your would be correct. Unfortunately when socialism is in full swing they categorize anyone with a money storage, super account, or house as rich. Unthinkable 20 years ago. Everybody with something will become a target to involuntary take part of a wealth distribution program. The system you refering to as robust and fair was perfect for 1 or 2 generations and government with charismatic leaders and calibre. These people today are not at eyeheight with the working and middle class. They are butchers with MBA's talking about a phantasy direction, and modeling some unrealistic nonsens without funding. The Superfund is sticking out to be the next road kill, and then they keep marching on.
Thanks Chris. I am 60 next year and this was incredibly helpful for me. Keep up the great work, mate.
Great to hear! Will do!
Terrific information as usual, thanks Chris. I have recently sold my Sydney home and bought cheaper in the regions. I was pleased to see your tip on carrying forward concessional contributions as this is a great way to move cash from banks to gain tax advantage in Super.
You’re welcome! Glad it was helpful.
Worked in the Super industry (software side) for years and understood the 'business rules' around all this, but this explanation is the best I have seen that breaks it down and makes it understandable.
Thanks!
Excellent summary Chris with critical information for the 60 and overs!
Very clear and informative. Thanks mate.
Good advice. I am going to take that 5 Previous years thing and look into it. I most likely only have one year left before I retire.
Good thinking
Those tax free lump sum payments can bite you. We took out a lump sum after turning 60 to do some house repairs. At the end of the tax year we got a bill from the Tax office, apparently that lump sum might be tax free, but it is still considered taxable income, we had to pay back about 3 grand, as the lump sum was enough to mean we didnt get a rebate on our medical insurance that year, and we had to pay back the amount of the rebate that had been applied to our contributions.
Taxed on money that you have already been taxed on, glorious!
Great video. I'd be interested in what happens to super when you move to another country.
Great, so I work for 50 years paying 1 third of my wage in tax each week and then they screw me again at retirement.?
I agree, it sucks. They already get contributions tax on top of our income tax each month while we are working, then they want to charge us again at the end of our career when we withdraw !
Of course this is the Australian Government bunch of 🤡s
That is correct I stopped working 3 years ago because of a medical condition and drew all of my super and was taxed 22 % plus.1.5% Medicare, screwed me completely
@@frederickgent1918 you think you got it bad, As. a dual US/AUS citizen the USA insists they can tax my super at full rate because as far as they are concerned it is just an invesment account.
@@julianelischer6961 that is just so wrong 🤨
Timely video thanks Chris nearing 60
Great video,thank you, I’d like to see one explaining how your super income affects your age pension, thanks again 😊
I'm about to turn 64 and have been thinking about what happens if I was to die. I have my two adult children nominated to share my super after I die. However I didn't realise that if I die and they get my super they have to pay tax on those amounts. If I withdraw my super when I'm alive and pass the money on they receive it tax free. Seems crazy to me the scenarios are treated so differently. I've read about things you can put in place to stop that but they seem just so contrived. Can you do a video on this issue?
Look at creating a testamentary trust within your will and make your children beneficiaries of that. This way they are less impacted by tax, and are also protected by the trust in other ways.
I didn't have to pay income tax on my Fathers super when he passed. but the ATO comes come with their hand out for 15% + Medicare levy. Anyone that says there isn't a death tax is lying to you.
Dependent on how much you have in your Super Pension and how it impacts Centrelink Payments - there comes a point where it makes no difference on tax or centrelink whether it is in Super or not, then it would make sense to pull out your Super so it doesn't affect your kids on your death. Most Super Pensions invest into managed funds - you can do the same outside Super. You would also have higher earnings as the fees tend to be lower outside of Super. There also isn't a min pension payment and you can keep you funds invested if you want.
Mate great information.
Thankyou! I will be in touch.
Every one should be eligible to get the Government Pension like in the old days. Other countries like NZ,gives everyone a pension, but here in Australia they have such a ridiculous low threshold that even a very low earner will reach it
@fc7424 Thanks for the info. My problem is my wife still works and will be doing so for at least the next ten years. Because the threshold is so very low my wife exceeds it by at least thirty percent. Not that she is a high earner and even unskilled workers earn easily more than the threshold. The pension threshold in my opinion, made very low to deny people who have worked all there lives a chance of getting it
We had a system, many decades ago, where everyone contributed. Over time it accumulated a significant pool of money. Then, a mismanaged cash strapped Menzies government got its greedy eyes on it and absorbed the lot of it into consolidated revenue.
Thanks, Chris. Good info once again.
Confusing, tricky, slimy. Thank you for the info.
Slimy? haha
Great tips! Subscribed. Just happen to be turning 60 in a few months and this popped up, awesome!
you explain everything so clearing to understand thanks Chris
Glad to help!
Good info as always Chris! Do you have any info on reducing CGT on an investment property before retiring Vs keeping it as a passive income stream (especially if the house was purchased post 1985 for $100k and now valued at $1.2M?
We’re 5 years away from retirement and salary sacrificing like crazy to top up before we TTR. ✌🏻
Cheers!
I would love some information on this too😊
It’s stressful knowing how much tax we face in Australia. However after a recent trip to SE Asia where the footpaths were unwalkable & broken, no adequate ambulance service or garbage/sanitary services……I’m happy to pay tax. The average Aussie has a fantastic quality of life, I wouldn’t trade.
Good perspective! Thanks for the comment.
comparing us to a 3rd world country--- we are a 3rd world country
@@666dualsport I'd suggest then, that you go and live in the US, France or the UK.
"(Australia is a) 3rd world country", pfft!
Ambulance is not FREE!
Take it you haven’t travelled much?
Love your presentation.. awesome!
Tip 1 - I don't know anyone who could suddenly make $150k of carry forward contributions. You'd have to have been unemployed or seriously underemployed for 5 years before then having $150k spare money. Would need a lotto win or an inheritance, but then you'd choose undeducted contribution instead.
@@glen646 That would be a rare situation I suspect. Maybe the reason the superguy made this his No1 tip is because it doesn't get used much.
We probably have at least one client a week in this situation. Self employed person/non-working spouse who sold an investment property are two examples.
You forgot the smart people who had the wisdom to buy a couple of Bitcoin a mere 8 years ago.
@@marko1314 You mean the smart bitcoin players who are now serving very long jail sentences, or do you mean those who lost all their bitcoins in exchange failures? Nothing smart about bitcoin gamblers, some were lucky, many were not.
@@einfelder8262 Sour grapes mate - Clearly you weren't that smart and you obviously missed out.
❤ Great tips. Thank you Super Guy.
You're welcome! Glad they are of value.
thanks for this. it is sad that we are taxed, ie punished, for saving, because our earnings, which have already been taxed, and bloody taxed again.
It's not taxed again - employer contributions going in are taxed going in at 15%, personal contributuons are taxed only if you claim a tax deduction. Earnings on your Super is Taxed at 15% but this is only on new money not exisiting. After age 60 it's tax free for the majority of Australians (there are a few minor exeptions, normally gorvenment fund who have not been taxed previously).
@@kachdragonfly quite right you are . Paying tax on what you invest or stick in the bank is inappropriate. Why should you be punished for taking on all the risk. Government has to provide you with an alternative if it decides to take your money without asking. Fuck em. I earn 18 k in Aus and the rest is oversees in my wife’s account and she ain’t a resident and I’m dual resident. I have a house in another country and I have a flat in mellbourne and they can take me court before I pay one penny of tax. It’s nonsense
Ridiculous comment, did you not listen¿
@@Bokgatyour a great citizen, you must be so proud😅
Yep i timed my carry foward contributions during COVID. Dumped all in super at the bottom
Well explained. Thanks
Turned 60 switched out of accumulation to pension. I received a 4% mandatory payment from my financial advisor then reinvested 1/2 back into super. Tax was $2.5k but got back $17k from ATO. It helps having a lawyer, financial adviser and accountant all on the same page. I got a 13% return last year and just got and from my advisor to hurry up and spend more because your ex dividend and more is coming through. Seriously WTH do you do with it, we own two houses and are both tight arse boomers because of the 90s. We planned to have security but being tight for so long is hard to spend it.
Sounds like an enviable position. Well done!
Very clear thanks for posting.
Was going to watch this, but didn’t get past the ads
UA-cam Premium saved my mental health, no more adds. Best money I've spent.
You get what you pay for.. no ads at all for me.
Nice job explaining it.
Great advice thanks buddy
Very helpful. Thank you. We are indeed blessed in Australia with work, wealth and security.
Well not anymore thanks to albo and his circle of idiots
Still confused by this tax system.
I turn 60 in 2025.
What do I do then ?
Do I get my super money ($130,000) in full if I want it all in full, or not ?
Seems the tax department will have their hand out.
This video can help ua-cam.com/video/Kh336VuhWmw/v-deo.htmlsi=EjTgmD9YTz9SaE-0
Once I hit 60 I am going to start a TTR and work less.
The period between 60 and 65 is tricky. Statistically I think this is where most people can still enjoy life in full. After 65 it gets harder health etc. There are three choices at 60 if I understood it correctly. A - Fully retire then use superannuation tax free including earnings B - Work in jobs people hate and establish TTR and use jobn income to boost super till tax free threshold and draw minimum to TTR free tax C - Same as B except changing job you hate income to activity you love income. This is where it gets tricky on definition of "employment".
At 60, you can meet a condition of release by "ceasing an employment arrangement", so this does not necessarily need to be retirement. You could also cease one employment arrangement (if you had 2 in place) and this would also satisfy this condition. The options are listed in this article if you're interested -> superguy.com.au/accessing-superannuation/
So good info. Thank you.
You're welcome!
I assume that this is applicable to Australia judging by your accent? No country mentioned.
Yes
the ato is confusing
"The unused cap amounts you can carry forward depends on the amount you have contributed in previous years, starting from 2018-19. You can carry forward unused cap amounts from up to 5 previous financial years, including when you were not a member of a super fund.
Unused cap amounts are available for 5 years and expire after this. For example, a 2019-20 unused cap amount that is not used by the end of 2024-25 will expire."
ie the first 5 previous
the second 5 total
Yes, that is the first $27,500 in my calc.
It is only 5 yrs of contribution caps I can carry forward.
Even if I add the 2024/25 cap $30k and drop the 2019/20 $25k cap I still only get $137,500
Hi there. Thanks for the tips. So what you’re saying is that withdrawals from a TTR pension are tax free after 60, but investment earnings from the TTR pension account are not?
Correct. Only investment earnings within an ordinary account based pension are tax free.
Good video- Question- I'm a bit dirty on the fact that must withdraw 4% After 60. I feel this is overreach. I intend to withdraw all my super as a lump sum at this point, but I'm worried how it will be viewed regarding anything to do with assets testing, like getting the aged pension down the track. What are the ramifications of lump sum withdrawals? I just can't stand the thought of the government telling me how much of my own money I must withdraw from my stack each year. In a falling market I wouldn't take ANY!
You could always reinvest what you don’t need to live on outside of super. As long as returns you earn on investments stay under the tax free threshold you won’t pay tax
Withdrawing all your super and losing the tax free benefits seems like an extreme response to the minimum drawdown requirements.
I hear you though on the requirement to sell in a falling market. In the 2008 GFC (Labor) and 2020 COVID (Coalition) the government halved the minimum drawdown level. Admittedly, these were extreme events, and there is no guarantee this would be repeated in a more moderate market decline in the future.
True, I just don't understand why they'd even set a minimum? 4%can easily fail for smaller balances, especially if you have a scare at the start of retirement, and then follow the pied piper down the 'bonds are safe' path. Either I'll make most of my super gets passed down-which is why I'm doing it? Government's wishes be damned. @@andrewmcalister3462
@@andrewmcalister3462Hi Buddy sorry to chip in but the person who want or has the potential/possibility to take all the money out of super is well worth in my personal opinion the reason is very simple all our superfumd are invested in directly correlated and over inflated assets like stocks bonds ETF, housing, Bitcoin etc. As the economy today is basically debt consolidation which It is now a certainty that he will be unpaid. Who wants to leave their savings with these scoundrels?
You take 4% if you take an income stream otherwise you can leave it there and just withdraw if you need it.
And for all of these deceitful taxes, I HATE POLITICIANS. THEY ARE THIEVES….
and guess which sector of the community has the most generous superannuation scheme, yes that is right, politicians
Assuming you’ve never used taxpayer funded things: roads, schools, hospitals, police…
The government can just print money! Taxes are just to keep us poor as well as money printing and inflation
It's a shame you are allowed to vote.
@@Enthusiasmisgood "Assuming you’ve never used..."
So if a thief steals your money then throws you a slice of bread in return that suddenly makes it ok?
Great video. Thanks for sharing.
Thanks for watching!
We pay tax on income and everything we buy.
Why are we taxed twice?
I receive a "invalidity pension" from the Commonwealth Superannuation Corporation under Military Superannuation Benefits Scheme, they call it a pension and even though it is in reality a lump sum payment they and the ATO continue to call it a "defined benefit". The day I turned 60 my tax dropped dramatically, from memory it went from $330 f/n to $140 f/n, but I still pay tax, and my group certificate or whatever they call them these days has a "taxed element" listed and the tax free component is listed as NIL. Should I be still be paying tax?
Bludger😊
Great job. Thankyou 👍
You're welcome! Thanks for watching and commenting.
Another fantastic clear explanation. Thank you, Chris
I just have a quick question. Am I able to use the capital gains from a property that I'm selling to invest into my superannuation fund? I'm aware of the 5-year going back on concessional contributions and the 3-year bring forward rule on the non-conceptional and would like to take advantage of that.
Are you over 55 and owned the property for more than 10 years? I believe there is a special case for that scenario that allows you to contribute to $300k of the house sale proceeds. Look it up.
@@lynettejwhite yeah thanks for that. I've done a lot of looking up and that's why I'm asking here. I'm looking for a clear answer. But to be quiet, honest, I don't think your question about age and how long you been on the property for is relevant. I may be wrong but I've not seen things like that as part of my research.
@@iamkanga Well since YT won't allow me to post a link, you'll have to google "Super downsizer contributions' to understand what I mean.
@@lynettejwhite Thanks but downsizer contributions are directly related to the sale of your principal place of residence. I would not be subject to capital gains tax on my principal place of residence. But I'm happy to have you clarify if I'm missing something.
I have a different situation.....I am 74 and do not receive a aged pension because?........My wife is 65 and still working.....She does NOT share her income with ( nor should she have to) me I have a place to stay, and food to eat, but no money to spend on anything.....tough luck eh?
If you don't believe your wife needs to share her income with you, then logically you would probably agree that no one else in the country should have to either, because that's how the Age Pension is funded.
We are 70 years old , both my wife and I . Do We have to pay tax when downsize my resident home to a small unit and put money in my superannuation as allowed to maximum 300,00 each and if tax is how much . Thanks
Downsizer contributions will enter super tax-free and can be withdrawn from super tax free.
You pay no tax when selling your personal residence. There may not be any advantage putting it into Super as investments in Super & outside super is assessed the same Under Centrelink rules. Best to get advice before making a large contribution into Super.
The sale of your Pimary Residence is not subject to Tax.
Excellent video, a lot of useful information.
Glad it was helpful!
food for thought, thanks, subscribed
You're welcome. Thank you!
Everyone agrees that a victim should do everything they can to get out of an abusive relationship..... except when the abuser is the ATO and government
Funny how you pay 15% on investment income in your accumulation fund, but when it goes backwards you can't claim a tax deduction!
They are 2 separate entities that's why you can't claim it it is the fund's loss.
@@graemelamont4094 don't think so mate its my money invested
While in accumulation, I understand your super is safe from all but your wife. Is it still safe from creditors and government once transferred to a super administered pension fund.
“Safe from
all but your wife” 😂😂😂😂😂
Good question.
By default, your super is not part of your estate, so unless you've specifically nominated her as the beneficiary of your super, how would she get it?
As I understand it, the super fund is not bound to comply with your nominated beneficiaries and rely more on dependency, Also, a wife seeking a divorce can have her solicitor include super into the mix of assets split.@@Hakucho64
@Hakucho64 If you don't nominate a beneficiary, it automatically becomes a part of the Estate, so yes, the wife would get it.
Very useful, thanks!
Glad it was helpful!
Hi Chris, if I have unused carry forward concessional contributions , but my super > $500K , at age 60 , can I declare retirement , withdraw a lump sum so my balance
Good question
Hi Chris, I’m 60 but still working full time and have my own SMSF. Can I start receiving a tax free pension now such that tax on my investment earnings is reduced to zero?
You need to retire (or be age 65) to be able to start an income stream that allows for tax-free investment earnings.
Thanks Chris, upon my retirement, can I also withdraw a tax free lump sum in addition to a pension stream?
Hey everyone, I'm new to retirement pension and looking for advice. Any tips?
People forget that builtninto our taxes WAS our pension fund. We already paid it until keeting took it away.
Hi Chris, Lets assume I have $1million + in super at age 65 . If I don't intend to retire
until I turn 67/68, rather than leave in accumulation should I commence a pension at 65 leaving
a small amount in accumulation for future contributions. My plan would be to withdraw $120,000 P/A
from pension then reinvest back into accumulation as non concessional to reduced the taxed component on my death. Also I would be saving the 15% tax on earnings in the pension phase. It seems like a win win for me. I have I got this right? Cheers Mate.
If you are still working wouldn't that be a TTR and the investment income in the fund be taxed at the 15% anyways?
My understanding is that would only be in the accumulation account which is the very same account before the pension. The pension account would be tax free. Once your 65 your pretty much free to what you want with your money.@@billk9856
From 65 you can commence the pension income and CGT tax free
The plan you laid out is a TTR where you can draw down between 4-10% of you Super per annum (based on your 1st July balance). Leaving the smaller balance in the accumulation account to add more as you continue to work.
You won’t be able to do the lump sum reinvest because your account balance is over $500k, but your employer can still make the standard SG payments as always.
Ouch I was told by my super accountant that in TTR i would not be taxed on super earnings. Self managed super with property investments. Can you confirm?
It sounds like they might need to remove the term 'super' and 'accountant' from their title! In saying that, earnings within a TTR pension were tax free prior to 2017, but haven't been ever since.
For some of us that were born after a certain year I didn't think we could pull any Super out until the age of 67. Are there age conditions on pulling Super out at 60?
The 67 age is related to the government pension. Super remains at 60 (or a bit less if you are pre 1965). Many people get these age limits confused
So I was born in 1966 and have a government super fund, am I right in saying I can access it at 60?
You need to have met a condition of release to access your Super - basically change employer or retire after after age 60 (just Google)
Great info as always
Thank you
Hi Chris,
I'll be 61 in a few months. I only work 3 days a week and want to start TTR to supplement the income.
I want to retire when turned 65, my question is when I retired can I do lump sum withdrawal?
Thanks.
Danny
Hi Chris,
Regarding untaxed contributions by employer via defined benefit of tax that wasn't paid employer.
Once you have meet the conditions to access the super and convert it to pension phase.
When does the taxable component is paid/apply?
What is the tax rate? Or is it included in your yearly income ATO assessment?
Cheers
Adam
PS Thanks for the Video😁👍
My wife is in a defined benefit too and you pay the tax upon each withdrawal (if no tax was paid when it was going in). The tax rate depends on what your tax bracket for that financial year though so it could be between 15-30%.
Ask your accountant to confirm the rate for you mate. ✌🏻
Thanks for That 😁👍
can you do a video about the triple change on July 1?
SG goes up 0.5%
tax cuts kick in giving a net pay rise
the super limit goes up to 30k p.a.
will be interesting to see what happens to net pay if salary sacrifice goes from 27.5k to 30k given the extra SG and tax cut
Just for you ua-cam.com/video/HmpIdJGn8BA/v-deo.htmlsi=Z6zyrVcBRXvTJ41h
All sounds so simple
How did we get to the '$150k or more 'carry forward concessional deduction? At year end 2024 the max contribution would be $132,500 (27,500+27,500+27,500+25,000+25000)?
Did you include current year cap?
Chris says that super earnings are tax free after 60 once you move from an accumulation account to a pension account. I'm not entirely sure that's true. I am receiving a government defined benefit pension and the notional balance of that pension account exceeds the Transfer Balance Cap (TBC). Consequently, I've been told that my lump sum component that's still in an accumulation account can never receive tax free earnings even if I move it into a pension account. 🤔
Your comment seems contradictory.
@@SuperGuyAu what specifically is contradictory? I checked the ATO website and it says that the Transfer Balance Cap is the maximum amount that can be converted to a tax free pension. Any excess above the TBC continues to have its earnings taxed at 15%. The TBC was $1.7M when I retired in Feb 22 and my total super bal was approx $2.6M - so I have an excess above the TBC that continues to have earnings taxed at 15%.
At 7.25, you said income and capital gains become tax free. I assume this is how they are assessed when paid after 60 from pension phase. Earlier you said, that the fund is comprised of taxed and tax free components. My questions is in the event of death and proceeds going to beneficiaries, are the unpaid " interest and capital gains" still assessed as tax free in the hands of beneficiaries or will they have to pay tax at their marginal rate on this component along with other taxed components.
Hi Guy, that means at the age of 60, someone need to call their superfund to transfer into Pension Fund? What is Pension Fund itself? If the person is still working at the age of 60 and contribute salary sacrifice monthly, will that be taxed at 15 pct? Thank you.
Most super funds also offer a pension account. Yes, salary sacrifice contributions will incur contributions tax of at least 15%.
Thank you. To reconfirm, either below 60 or 60 and over, as long as it is salary sacrifice, we have to pay tax 15 pct? In regards of pension accounts at the age of 60, can it be open while someone is still working full time? Or should the person retired first? Thank you again. Appreciated.
Really appreciate your content, very informative. If we sell our investment property for 100k profit and split profit to 50k each and reduce CGT to 25k each because we have held for over 10 years.? can we put that 25k into super using carry forward contributions so as not having to pay income tax and just pay 15% contributions tax into super ?
Tax tax tax every way possible
It’s disgraceful.
Chris. Lets say you have $600k in SMSF owned by family super trust. And lets say you hit 60 in 2 years (so by then there will be eat least $800k). And lets say your income is from full time employment. The rules around "employment" once you hit 60 apply also if you have hobby income or you start your own company income doing what you love instead of earning heaps more doing what you hate? Basically are there any income types (apart of salary) that do not attract tax rules? after 60.
Rent seeker.😊
Great video, and thank you! A question, though, at minute 7:30. Does the super pension account attract CGT on realised investments?
Can I withdraw from my super at 60 to pay out my morgage
Good question, I'd like to know this too.
I think you need to have left work and said you will no longer be working,not while you are still working I think
Yes you can but can't be working or on social security
A tradesman I worked with in 2010 done this. He spoke to the employer, they made him redundant paying out all entitlements. He then withdrew money from super to pay off his mortgage and was re-employed weeks later.
Things still seem structured in a way that would still make this possible I believe
You can, however, the maximum you can draw down is 4-10% p.a unless you roll everything over to Pension Income Stream and then you can withdraw whatever amount you want.
What about sale of properties that are not bought via super? If over 60 are they CGT free?
No. They are assessed for tax based on the entity that owns them. But there are ways to reduce or eliminate CGT.
Still subject to CGT just like shares.
Hello you video has confused me a little I have just got of the phone to Australian super and they inform me that is i was to close my account and take all money that it would be tax free ? further more that if i was to die that my beneficiaries would have the money tax free ? I will be 62 in October .The lady on the phone stated that the money falls all in one category even that i did salary sacrifice and put my own money in I guess i have it wrong when you talk of the different categories and the different taxes you will pay for each ? regards ron
Be careful getting super and tax advice from a call desk. I'm sure their intentions are good, but they are not licensed or educated to be providing personal financial advice.
you should clearly state that this is based only on australian law
So if you have reached 60 and I setup all my $700K super into retirement fund with a withdrawl of %5 per year. I then start work part time to earn 18K per year does the tax department add my tax free income stream to my 18K a year part time job together, to come up with a taxable amount?
Under current rules, payments from super are not included as taxable income.
Original recipe or hot and spicy? It’s like Sophie’s choice..
hot and spicy for sure
Would it be worth salary sacrificing and moving funds into TTR to pay off an investment loan?
Hi Chris, can I assume then that everyone with superannuation in accum accounts should convert to an account based pension at aged 60, just to get that extra 15% on earnings. Even if they don't need the money they can always recontribute back to super ?
One thing what amount can you have in super, before you start losing money from the pension. ?
This all depends on what country you live in, surely.
Yes, Australia.
What about a tax deferred super?
Thanks Chris, is because I take advantage for carry-forward unused concessional contributions for tax deduction purpose in my working life, then this becomes taxable components in the total super balance and subject to 15% tax rate? But if I only withdraw after 60 years old, which means this 15% does not apply. Is this correct? I am not too sure whether I should use this unused carry-forward concessional contribution because I don't want to pay extra tax later on. Please advise. Thanks again.
If my wife and I own IP using smsf, she is older than I am by a few years, can we sell the house once she is at preservation age of 60, who must we wait until we’re both 60?
Selling your IP in you SMSF will still attract CGT tax after age 60. Only after you convert to pension stage will the earnigs be tax free in your SMSF. Talk to your accountant before you make such a move.
Once your accumulation account turns into a pension account, does anybody know if it continues to generate returns at a similar rate as the accumulation phase? Therefore, if it was generating a return of 8% for example, and you were receiving 4% per annum as your pension, it is possible that your pension balance could actually continue to increase year on year? Hope that makes sense 😁
I thought you could contribute up to $110k tax free each year ...eg personal saving that U put directly into Ur super
The standard non-concessional (after-tax) contribution cap is $110,000 per year. The concessional (deductible) contribution cap is $27,500 per year (as at the time of writing).
Did i.miss where you say what country this is for?
Australia.
Yep that’s Australia, where politicians pilfering the public is common place. Tax, tax, tax.
China has very low taxes, maybe you would like to live there?
@@ArmySigs That's an idea, might do that. The only thing that might make me home sick is missing seeing those facial and number plate recognition cameras at all the intersections here in Australia, which were installed the two years during covaids, o wait they came from china anyway. Not so bad after all.
Tax that's usually massively reduced if you have super.
What I get upset about is how there are different rules for politicians vs the rest of us. When they retire, the get their income as their pension for life and indexed each year. If they have investment properties and an income stream from these properties, they get to keep that and also they can get another job and make more money. If we did that, the pension is cut off. Double standards for those that mismanage the states and country.
Under the TTR approach - is the salary sacrifice limited to the max annual concessional contribution cap or is there a different cap applied.
Yup Australian government collect so much tax just to donate it to other countries. While Aussies suffer, and to top that Australia have so much resources like gas, coal, oil but sell it to other countries for pennies, while Australians pay so much.