Superannuation Discussion + market volatility

[SYD]

Ok. What defines a downsize contribution then because you can just put money in as well.

Downsizer super contributions | Australian Taxation Office

Check if and how you can contribute money from the sale of your home into your super fund via a downsizing contribution.

www.ato.gov.au

Once off $300k that doesn’t count towards your TBC (which also means someone over their TBC can still top up!).

 

[Pushka]

Downsizer super contributions | Australian Taxation Office

Check if and how you can contribute money from the sale of your home into your super fund via a downsizing contribution.

www.ato.gov.au

Once off $300k that doesn’t count towards your TBC (which also means someone over their TBC can still top up!).

Thanks. I didn't complete a downsized form so guess it is just a contribution.

 

[SYD]

Thanks. I didn't complete a downsized form so guess it is just a contribution.

But you probably used “Bring forward” arrangement?

 

[Brissy1]

Downsizer super contributions | Australian Taxation Office

Check if and how you can contribute money from the sale of your home into your super fund via a downsizing contribution.

www.ato.gov.au

Once off $300k that doesn’t count towards your TBC (which also means someone over their TBC can still top up!).

From that ato link... "However, downsizer contributions count towards your transfer balance cap."
?

 

[SYD]

From that ato link... "However, downsizer contributions count towards your transfer balance cap."
?

“but it doesn’t count towards the contribution cap.”

I was probably using TBC interchangeably….

 

[RAM]

Picking the 55yr age is disingenuous. The better number is preservation age. 55-67 is the age when most people can max their super contributions - mortgage free, no school fees etc etc.

The difference is the retired (ie the ones who have reached preservation age) cannot add/rebuild their super through SG, salary sacrifice, or through other income and compound interest (as they are drawing down their super)

No ulterior motive in picking 55 - that's the age that a number of funds will down rate the investment option for people who have not directed otherwise.

So, the points you make are even more reason why the degree of growth assets in the mix should NOT be decreased.

 

[Gremlin]

Ok. What defines a downsize contribution then because you can just put money in as well.

If you (inadvertently) didn’t do a downsized contribution first time round, then you obviously can do it again. But it’s likely to be a decent wait to meet the criteria a second time around. 10+ years held, CGT exempt (ie PPOR)

 

[Quickstatus]

At 68 you can convert part to pension phase and still keep working

Except that once fully retired , there are no further inputs into super

So, the points you make are even more reason why the degree of growth assets in the mix should NOT be decreased.

That the superfunds make investment options less aggressive at retirement actually recognises the fact that preservation of capital is an important consideration for those in retirement.

It is actually better to do that and then notify the account holder.

 

[Pushka]

Except that once fully retired , there are no further inputs into super


That the superfunds make investment options less aggressive at retirement actually recognises the fact that preservation of capital is an important consideration for those in retirement.

It is actually better to do that and then notify the account holder.

Yes but that doesn't have to happen at 68 unless you choose to do so.

I nominate the broad strategy of investment risk although of course it's the super fund that manages which options are considered conservative versus aggressive and invests accordingly. . I'd be pretty peeved if they decided that I, at my age, should only invest conservatively and then tell me. OMMV We did manage (and received excellent returns from property investment) in our SMSF but we transferred this to an industry super fund maybe 8 years ago.

 

[Gremlin]

Just realised I didn't directly your earlier question, @Pushka . There is a specific Form that you need to provide your super fund so that they know that specific contribution is a Downsizer Contribution.

 

[Quickstatus]

I'd be pretty peeved if they decided that I, at my age, should only invest conservatively and then tell me

Risk profiles vary wildly between account holders and yours is very individual and for most people will change depending on their ae.
My point is only that there should be a starting point of capital preservation at retirement. How the superfund account holder adjusts that is then up to them

 

[andye]

Except that once fully retired , there are no further inputs into

Are there many advantages to fully retiring (accepting you can change your mind anyway) as opposed to accessing via condition of release?
I can only see some restrictions in moving money from accumulation or commuting lump sums

 

[SYD]

Except that once fully retired , there are no further inputs into super

You can still contribute concessional contributions (upto whatever the age limit is). As per the earlier discussion, those with a decent pension stream can reinvest some back into super and claim the tax deduction to offset earnings from non-super assets!

Plus there’s the “downsizer” one-off.

 

[Quickstatus]

You can still contribute concessional contributions

Sure but then you are not fully retired

Post automatically merged: Dec 14, 2024

Are there many advantages to fully retiring

Yes they are not necessarily financial.

 

[SYD]

Sure but then you are not fully retired

Post automatically merged: Dec 14, 2024

Define fully retired?

I’m sure 99.9% of “Self funded retirees” would probably disagree that you can’t contribute to super if no longer in the workforce.

 

[OATEK]

With age 75 my next milestone, the remaining time to contribute to super is narrowing. I have met the work test for the current (24/25) year, but my downsizing is not likely to be until 25/26 year. The key catch is if you are buying a smaller property it likely won't be settled within 90 days from the sale of your home, and so could be a bit of a lottery deciding how much to contribute.

 

[Pushka]

With age 75 my next milestone, the remaining time to contribute to super is narrowing. I have met the work test for the current (24/25) year, but my downsizing is not likely to be until 25/26 year. The key catch is if you are buying a smaller property it likely won't be settled within 90 days from the sale of your home, and so could be a bit of a lottery deciding how much to contribute.

I think the word downsizing is also a misnomer taking into account the cost of buying something else. All the stamp duties fees amd taxes we have to pay most likely put many people off selling and repurchasing.

 

[OATEK]

I think the word downsizing is also a misnomer taking into account the cost of buying something else. All the stamp duties fees amd taxes we have to pay most likely put many people off selling and repurchasing.

Agree. In our case it is about trying to move to a single level dwelling that is not on the edge of the bush (the latter leading to endless battles against the encroachment of nature). Something comfortable and manageable. But we don't expect to make much money even if moving from 5 beds to 2-3.

 

[Pushka]

Agree. In our case it is about trying to move to a single level dwelling that is not on the edge of the bush (the latter leading to endless battles against the encroachment of nature). Something comfortable and manageable. But we don't expect to make much money even if moving from 5 beds to 2-3.

Sadly, And therein lies a major reason why people can't imagine selling buying and moving which is never an easy process.

 

[Quickstatus]

Define fully retired?

No longer working for $$$