Robert's Retirement Blog

Well, it isn’t exactly a limit, it is more essentially saying that balances in superannuation for an individual above $3 million will incur an additional tax of 15% on earnings above the $3 million you hold. Currently, the tax rate is 15% so this will effectively increase it to 30% on earnings for balances above $3 million.

This was announced firstly I believe back in February 2023 by Jim Chalmers (see article here).

It is planned to take effect from 1st of July 2025 but has not been legislated yet at the time of writing.

There are a few concerns about the proposal which include, it is set to tax also the portion of “unrealised gains” the superannuation fund has above $3 million. Whereas currently superannuation capital gains are taxed when the event happens, i.e. sale of shares or property. The proposed legislation is saying even if you don’t sell the shares, they will be applying a tax on the unrealised growth that you haven’t sold yet. This can be problematic for a few obvious reasons as funds might not have the money to pay the tax if they haven’t sold the asset!

There is also no proposed indexation on the $3 million dollars. Now that might seem fine, but the argument is for people my age or younger, having over $3 million …

This blog post I wrote is just to raise awareness of what is happening in the superannuation provider space with HESTA. Like a lot of low-cost industry funds, they utilise outsource providers to keep costs down to provide savings to members. In this case they are currently using a company called MUFG and are now moving to a company called GROW Inc to do a lot of their administration.

This move and change will see a limited service period that has started mid April 2025 and is expected to finalise at the start of June 2025. Off the top of my head (so don’t quote me), since I have been in the industry over 8 years, I don’t recall a super fund every having such a large, limited service period (except for when a merge of 2 super funds have taken place). This however isn’t a merger, rather just a change in who does their back end work.

During this time, members and financial advisers like myself are unable to have online access to view current account details including things like balances of accounts or to check if contributions have been applied correctly in an account.

There are a few things that still to me seem a little bit hard to understand, for example if you would like to make investment changes – it is a bit unclear of how …

Many people when selling an investment property might consider concessional contributions to super to reduce potential capital gains tax. The limits for these contributions aren’t too generous, however what if you have considerable left over funds? Well, provided you haven’t used a “downsizer contribution” previously – you may be able to take advantage of these rules.

The “downsizer contribution” was first made available in 2018. The main purpose was to allow Australian’s 65 years and older (which the age is now 55 years plus) to sell your principal residence that you have lived in for at least 10 years and contribute any surplus up to $300,000 (singles) or $300,000 each (couples) into superannuation.

The idea is to encourage people to sell their “big” family home, move to something smaller and free up capital to help support their retirement. Even though it is designed in principle for this reason - you might have had a home you lived in from 2010 – 2020 and then it has since become an investment property. When you sell this investment property, provided you meet all the other criteria and haven’t previously used the downsizer contribution, you can still use the downsizer contribution rules even though it isn’t your current …

For those on government entitlements like the Age Pension, generally outside of your superannuation – your home is your biggest asset. But what happens to your Age Pension when it comes time to sell your home and downsize? Downsizing doesn’t happen overnight so does your Age Pension get wiped out whilst you are in between houses? Well, in some cases no and here’s why.

The Government will give you for those selling from the 1st of Jan 2023 onwards up to 24 months (provided it is your intention to become a homeowner again) an exemption period where they WON’T asses the asset value of your property up to the amount you intend to purchase another home for. I.e. your current home is worth $2 million and you sell then only plan to purchase for $1.5 million. Only the $1.5 million is exempt NOT the whole $2 million. Noting that the actual asset value will still have an impact on your income test i.e. it will be deemed.

This can be very handy in keeping government entitlements as you might be staying with family for a period of time until your next home is ready – or you might be temporarily renting until you are ready to move in. Now, the rules get very tricky here and it is important to seek specialised advice as in some instances as you …

An annuity is generally known as an income that is guaranteed and pays you for a certain number of years or the rest of your life.

However, in the recent number of years we have seen quite a bit of innovation in the “traditional annuity” space. For example, if you start an annuity with a provider with $100,000, it might pay you $5,000 for the rest of your life (all the payment amounts are dependant on your age, I.e. the older you are and closer to statistical life expectancy, the higher the payment and vice versa for the younger you are).

Some payments might be guaranteed, and others might not be in terms of they might fluctuate with investment markets. So, some years it might be positive and your payments will increase and other years it might be negative such that your payments will decrease.

Another term for an annuity that you might hear is a lifetime income stream or a fixed-term pension but regardless of what the product is called, every provider I know of in Australia is very different in how they are structured, and it is important to get specialised advice from a licensed financial planner around this.

My own views as to why we are seeing more annuity style products come up in the marketplace today is the government is …

It is always a consideration of health being number one and then finances come second with when you decide to retire and if you can do it a bit earlier. In this article I am going to look at a recent client situation where Client A who is 65 and Client B is 67 are a married couple living together and how when Client A is working still earning $30,000 p.a. and how that affect’s Client B’s age pension entitlement.

Currently when Client A is earning $30,000 p.a. That will mean that Client B is only eligible for a total of approximately $17,436 p.a. of Age Pension instead of the full Age Pension being $22,518 p.a.

That means currently their total household income is $30,000 p.a. (Client A’s work) + $17,436 (Client B’s Age Pension) = $47,436 p.a.

Noting this doesn’t include any superannuation income streams I have setup for them to top up their income. I am just trying to focus on work income and Centrelink entitlements in this example.

Now Client A decided to retire early which dropped their income to $0. They then moved on to what is called the “JobSeeker” entitlement from Centrelink. This has very different rules for different age categories, it is also means tested. For Australian’s over the age of 60 – to be eligible you have to …

Superannuation is a choice and like anything that we can choose, consumers (including me!) like to research things online before we spend money on anything. One thing that consumers do is compare returns from month to month, year to year, 10 years to 10 years of various super funds. Obviously returns is one of the key reasons to invest your money (i.e. your taking risk on your money and you want to make sure that whoever is looking after it is giving you something back in return that is the same if not better than others!).

However, it shouldn’t be the only deciding factor and returns quoted can differ from fund to fund making it harder to compare. One fund I deal with a lot in South Australia is SuperSA Triple S, now consumers get caught sometimes comparing returns to other super funds (and when I say other super funds I am referring to a standard accumulation where concessional contributions, earnings etc are taxed on the way in). SuperSA Triple S is different where employer contributions and earnings don’t get taxed until the end i.e. upon roll out or retirement for example.

What is the tax rate? Well, it can be up to 15% on unrealised gains and income. So this means that looking at SuperSA Triple S and their returns, you are …

For those already on an Age Pension, it is important to update Centrelink on a regular basis with changes in your situation. It is optional to notify them of smaller changes which they identify as below:

• car, boat, real estate or personal effects of $1,000 or less
• shares, investments, bank balances or loan of $2,000 or less.

However, anything larger – needs to be updated with them within 14 days of the change occurring. You are required to tell them about any significant changes, i.e. your income or assets change, you start working, or you change addresses. Please see a full list of what to tell them here.

A lot of the time the updates can be done online, however – as I work with clients and their Centrelink a lot of the time, even though you tell them when it happens straight away online (which fulfills your obligation), Centrelink may take some time (even months to process it). Now the best course of action is to get it sorted straight away with Centrelink so you are getting your correct entitlement as you can be missing out on extra income or have to back pay them if your assets increase!

An example is if you have $10,000 in a bank account (that Centrelink already know about) – then you decide to go spend the $10,000 on a …

I have made another blog post in the past about another super fund’s “Balanced” option. Note – these blogs are just general in nature and not advice, all I am trying to do is highlight that what something looks like on the outside, isn’t always the case on the inside. Case in hand this time is First Super.

Their “Balanced” option highlights as per the below that their fund contains 66% growth assets and defensive of 34%. This actually doesn’t sound too bad compared to other “Balanced” fund’s on the market in terms of it doesn’t carry as many growth assets as others.

However, when we actually drill into the pie chart and the breakdown, I believe they are misinterpreting what is a defensive asset (which they think is 66% as noted above).

When I look at the pie chart below I can really only see 3 defensive assets totalling 24% - i.e. Cash (4%), Australian Fixed Income (10%) and International Fixed Income (10%).

Again, people/companies can call a growth asset what they want and a defensive asset what they want – whether it is right or not is up for interpretation.

After a quick google search of the Moneysmart government website – their interpretation of a defensive and a growth asset aligns with mine as below:

Again, I am not …

For those who have worked in the South Australian Government before or know someone that has – you might have heard of SuperSA Triple S Scheme which is the default superannuation account for new employees in the SA Government. Although this news I am about to share has been around for a few years now – there are still a lot of new client enquiries I get who aren’t aware of the changes.

Essentially previously to 30th of November 2022, if you were employed by the SA State Government, they had to contribute your employer super contributions to the Triple S scheme. So, for example if you were a nurse working 3 days per week for the SA Government and then 2 days per week in the private sector, you would essentially need to carry two superannuation funds. However as per their notice that was communicated back in September 2022 (see here) from the 30th of November 2022 onwards, employees now have more choices.

One of the changes that are now available is that being an SA Government employee – your SA Government contributions don’t have to go towards your Triple S account now and you can choose any other complying accumulation fund. Now this can be a benefit in some scenarios so you aren’t carrying multiple super funds. However, it is …