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Superannuation Made Simple
The "Big Dollars" books are quick and easy investment guides by one of Australia's most respected financial advisers. This guide looks at choosing the right super fund, working out what it means for your tax and deciding how much to contribute. It shows you how to have enough to retire in comfort.
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Displaying 1 - 8 of 8 reviews
May 14, 2018
Summary:
This book achieves what it sets out to do: provide an entry level guide to superannuation. It's clear, has good examples and covers a range of different situations. It's not particularly exciting, but that's the nature of the beast. Nonetheless, it is a good step towards furthering your financial literacy.
I would recommend this book to everyone in Australia. It's good to understand the basics of this system so you can get the most value out of it.
The main message I took from this book is that superannuation is a tax efficient vehicle for our money that we should be aware of in order to capitalise on it. Particularly if you are nearing retirement age.
Some notable points:
- Paul Keating implemented a 15% tax on fund fund earnings. While unpopular at the time, the rationale behind this was not to boost tax revenue, but to force superannuation companies to invest in shares in companies that paid franked dividends. These franked credits can be offset against the tax due and be used to avoid paying income tax. This created a climate where superannuation funds can be assured of a growing stream of contributions, most of which are invested in Australian shares. This has boosted our stock market and made it one of the least volatile in the world.
- Concessional contributions are for contributions for which somebody, usually an employer, has claimed a tax deduction. They suffer a once-only tax of 15% on entry into the fund. When withdrawn from the fund, the money contributed, together with its earnings, may be subject to an exit tax.
- Catch-up contributions are for people with an erratic employment history and provides a chance to catch up on their missed contributions. Those with super balances of less than $500,000 aree able to access a higher annual cap and contribute their remaining unused concessional contribution cap on a rolling basis for a period of five years.
- Non-concessional contributions are capped at $100,000 per year, but you can bring forward three years worth and contribute $300,000 in one lump. If you have $1.6 million or more you can't make any more non-concessional contributions. There is no entry tax on these contributions and they can be withdrawn tax-free when you retire but you'll face exit tax if you withdraw prior to age 60.
- You can divert 85% of deductible contributions and 100% of non-concessional contributions to your spouse.
- It may be preferable to take your full salary and use the after-tax dollars to speed up repayments on your home mortgage rather than tying up money in superannuation while young. However, as you approach retirement age, superannuation remains a tax efficient vehicle for your money.
- If you intend to leave your money untouched for at least five years, you should choose a balanced or growth investment distribution. If you're nearing retirement you should keep enough money in the capital secure, cash or capital stable area to cover the next three years' planned withdrawals, but you can still have the rest of your money in balanced or growth.
-Determining how much superannuation you need is difficult, but important to assess. A rough guide is $100,000 of assets for each $8,000 per annum of retirement income you need. You can head to mylongevity.com.au to help determine life expectancy.
- Investment bonds are a good tool for estate planning as they sit outside the will and cannot be challenge. This ensures money will be distributed how you planned without causing legal strife within your family. A binding nomination, if used correctly, can also help with estate planning.
- Superannuation is a good vehicle for anybody in business because the contributions can be made tax deductible to the business are thus no different to paying wages or other business expenses.
- The super co-contribution is an initiative whereby the government will make a c0-contribution of up to 50% of an employee non-concessional contribution for employees earning less than $36,201 a year. The maximum co-contribution from the government is $500.
This book achieves what it sets out to do: provide an entry level guide to superannuation. It's clear, has good examples and covers a range of different situations. It's not particularly exciting, but that's the nature of the beast. Nonetheless, it is a good step towards furthering your financial literacy.
I would recommend this book to everyone in Australia. It's good to understand the basics of this system so you can get the most value out of it.
The main message I took from this book is that superannuation is a tax efficient vehicle for our money that we should be aware of in order to capitalise on it. Particularly if you are nearing retirement age.
Some notable points:
- Paul Keating implemented a 15% tax on fund fund earnings. While unpopular at the time, the rationale behind this was not to boost tax revenue, but to force superannuation companies to invest in shares in companies that paid franked dividends. These franked credits can be offset against the tax due and be used to avoid paying income tax. This created a climate where superannuation funds can be assured of a growing stream of contributions, most of which are invested in Australian shares. This has boosted our stock market and made it one of the least volatile in the world.
- Concessional contributions are for contributions for which somebody, usually an employer, has claimed a tax deduction. They suffer a once-only tax of 15% on entry into the fund. When withdrawn from the fund, the money contributed, together with its earnings, may be subject to an exit tax.
- Catch-up contributions are for people with an erratic employment history and provides a chance to catch up on their missed contributions. Those with super balances of less than $500,000 aree able to access a higher annual cap and contribute their remaining unused concessional contribution cap on a rolling basis for a period of five years.
- Non-concessional contributions are capped at $100,000 per year, but you can bring forward three years worth and contribute $300,000 in one lump. If you have $1.6 million or more you can't make any more non-concessional contributions. There is no entry tax on these contributions and they can be withdrawn tax-free when you retire but you'll face exit tax if you withdraw prior to age 60.
- You can divert 85% of deductible contributions and 100% of non-concessional contributions to your spouse.
- It may be preferable to take your full salary and use the after-tax dollars to speed up repayments on your home mortgage rather than tying up money in superannuation while young. However, as you approach retirement age, superannuation remains a tax efficient vehicle for your money.
- If you intend to leave your money untouched for at least five years, you should choose a balanced or growth investment distribution. If you're nearing retirement you should keep enough money in the capital secure, cash or capital stable area to cover the next three years' planned withdrawals, but you can still have the rest of your money in balanced or growth.
-Determining how much superannuation you need is difficult, but important to assess. A rough guide is $100,000 of assets for each $8,000 per annum of retirement income you need. You can head to mylongevity.com.au to help determine life expectancy.
- Investment bonds are a good tool for estate planning as they sit outside the will and cannot be challenge. This ensures money will be distributed how you planned without causing legal strife within your family. A binding nomination, if used correctly, can also help with estate planning.
- Superannuation is a good vehicle for anybody in business because the contributions can be made tax deductible to the business are thus no different to paying wages or other business expenses.
- The super co-contribution is an initiative whereby the government will make a c0-contribution of up to 50% of an employee non-concessional contribution for employees earning less than $36,201 a year. The maximum co-contribution from the government is $500.
July 8, 2025
Very easy read in simple language highlighting the tax benefits of superannuation.
July 21, 2020
A highly informative book that thoroughly explains the importance of superannuation in the 21st century since people are definitely living longer, and it's imperative that they make their money last as long as they do. Renowned finance guru Noel Whittaker unravels the mysteries and myths surrounding superannuation and shows how you can utilise it to save on tax and therefore build your wealth. Noel explains all about contributions, salary sacrifice, the types of funds, accessing your super when you retire and also what happens to it after you die-as well as how to leverage any government benefits you get as well as what to do with your super in the event of a divorce or if you have a small business. Highly recommend this book for anyone who needs help with superannuation and wants to find out more about it, and also wants to know the history of how it all worked before, and also how to cope with the changes and work with your financial advisor to do so.
November 18, 2020
This is an excellent book which explains the basics of superannuation as the title suggests. Whittaker takes a potentially dull subject and uses plain English to describe the ins and outs of the complexities of superannuation to a level that anyone can understand. He uses many examples and the text is broken up by some cartoons which lighten up the nature of this topic.
This is essential reading for all Australians in the workforce and especially those approaching retirement or have considered taking out lump sums from superannuation during the COVID-19 pandemic - the long term implications of such withdrawals should be seriously considered! A glossary of terms and index also helps to refer back to sections of the book you may want to re-read. My big take from this is: don't underestimate the power of compound interest! We are so lucky to live in a country which has such a solid scheme as superannuation for making our retirement years the best years. Highly recommended.
This is essential reading for all Australians in the workforce and especially those approaching retirement or have considered taking out lump sums from superannuation during the COVID-19 pandemic - the long term implications of such withdrawals should be seriously considered! A glossary of terms and index also helps to refer back to sections of the book you may want to re-read. My big take from this is: don't underestimate the power of compound interest! We are so lucky to live in a country which has such a solid scheme as superannuation for making our retirement years the best years. Highly recommended.
March 10, 2022
Well, the book does what it says it’s gonna do. Quick and dirty. Not the most riveting topic. Nonetheless comprehensive.
September 25, 2022
Not what I was hoping for. Basically if you’re over 40 you should start utilising super due to it’s tax saving advantages. If you’re below 40 buy a house and leverage instead. The government has done a really good job of setting the rules for superannuation to stop it being exploited until you’re closer to retirement.
March 7, 2020
Very good book, very through in explaining everything about Superannuation. Some of the examples were not clear or intuitive, other than that I loved everything else.
February 17, 2018
The 2017 edition was an easy read and it was easy to understand for the Australian situation. Only a small book but lots of good information
Displaying 1 - 8 of 8 reviews