Build & Manage Wealth

Superannuation is the most tax effective structure for the building of wealth for retirement. It is subject to various rules and regulations which, to date, have changed regularly.

Understanding if Superannuation Guarantee contributions will be made on your behalf in your new role is critical.
Understanding your ability to make additional tax deductible super contributions, can make an enormous difference in your retirement savings.
If you are operating under a company structure, being aware of how you can potentially make super contributions more tax effectively will be important.
You may need to rollover existing superannuation from your previous employer’s fund. Understanding your choices and what alternative super fund is most appropriate for you is critical.
By leaving your previous employer you may have access to some superannuation benefits that were previously unavailable – do you know what these are?
Have you kept track of all your previous Superannuation http://www.findmysuper.com.au/
In the context of your new role, you should consider the benefits of ongoing superannuation contributions for long term wealth accumulation and tax concessions

Changes to Super

Changes to superannuation recently announced by the Federal Government mean that super is now a key strategy for many Australians in the creation of wealth. In summary the major changes are:

Both lump sum and pension benefits paid to retirees aged 60 and over from most super funds will be exempt from tax from 1st July 2007. However, tax will still be payable on benefits paid to someone under age 60, although simpler rules will apply. As a result, super becomes far more attractive for all of us.
One of the more significant changes is the abolition of ‘Reasonable Benefit Limits (“RBLs”). There will no longer be limits to how much can be withdrawn from super at concessional tax rates.
The current age-based deduction limits will be abolished and replaced with a single limit. The first $50,000 per annum of employer and personal deductible contributions will be taxed at 15%. Any amount above this will be taxed at the top marginal rate plus Medicare levy. As a transitional arrangement, people aged 50 and over will be able to contribute $100,000 per annum on a concessional tax basis until 2011-2012.
As a transitional arrangement, people who are eligible to contribute to super may make $1million of undeducted contributions up until 30 June 2007.
From 1 July, 2007 anyone eligible to contribute to super may make up to $150,000 of undeducted contributions each financial year. For people under age 65 they can contribute up to $450,000 in a single year but, in doing so, forego the ability to make undeducted contributions in the two following years.

These changes make super the most tax effective investment available to you.

However, the changes also mean that individual financial strategies need to be reviewed in order to take full advantage of the benefits.

If you would like further information about the changes to the Superannuation Legislation and how this relates to you, please contact Neridah Moore (03 8627 1700) at ipac for the dates of upcoming superannuation seminars.