WM Lect 10 Wk 11_Superannuation & SS_Jessica

WM Lect 10 Wk 11_Superannuation & SS_Jessica -...

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Wealth Management FINS2643 Lecture 10 Summary: Superannuation Three-pillar model to retirement funding 1. Age pension 2. Occupational based contribution 3. Personal contribution Contributions Superannuation Guarantee Charge: employer must contribute 9% of employee’s ordinary time gross earnings each quarter (Henry review recommended 12%) Personal contributions o Concessional contributions (15% contribution tax) – pre-tax income Extra 31.5% tax for contributions >$25K if person is <50 yo Extra 31.5% tax for contributions >$50k if person is >=50 yo o Non-concessional contributions – after-tax income No penalty up to 150k per year, or 450k over 3 years After exceeding limit taxed at 45% o Spouse contributions $3k contribution = maximum tax offset of 18% = $540 offset Government co-contribution (after tax) for low income earners (1000$) Accumulation Balance invested and taxed at concessional rate of 15% on income and 10% on LT cap gains Must meet at least one condition of release under Superannuation Industry (Supervision) Act 1993 o Retirement o Reaching age of 65 o Death o Permanent incapacity o Severe financial hardship o Compassionate grounds o Temporary incapacity o Payout in lump sum and/or pension Lump-sum payout tax free for 60+ Types of Funds Industry funds (lower fees) JESSICA YANG 1
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Standard employer-sponsored funds Public sector funds (lower fees); Public offer funds Retail funds Small superannuation funds; Self managed super funds (SMSF) Advantages of SMSFs Disadvantages of SMSFs Lower cost Permits transfer of non-cash
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This note was uploaded on 04/02/2012 for the course FINS 2643 taught by Professor Fong during the Three '10 term at University of New South Wales.

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WM Lect 10 Wk 11_Superannuation &amp;amp; SS_Jessica -...

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