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Super guarantee frozen

Over the past week, the government has confirmed its decision to freeze the compulsory superannuation guarantee at 9.5% for the next seven years. It will rise to 10% in 2021 and then increase incrementally before plateauing at 12% in 2025. Previous to this, the superannuation guarantee was planned to reach 12% by the 2019/20 financial year.

In light of these changes, individuals may have to reconsider their approach to superannuation if they want to maintain their current retirement plans. If it is possible for you in your current circumstances, you may want to consider salary sacrificing into your super. This is also known as making concessional, or before tax, contributions. The advantage of salary sacrificing into superannuation is that it will be taxed at the low rate of 15% (as long as it is below the concessional contributions cap), which for most people is far less than their marginal tax rate. Even salary sacrificing as little as $10 a week into your superannuation can go a long way in counteracting the impact of the frozen superannuation guarantee.

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Superannuation for Women

January 18, 2019

It’s no secret that the median super balance for Australian women at the time of retirement is significantly lower than that of their male counterparts. The Australian Commission & Investments Commission (ASIC) have reported that men retire with about twice the amount as women. The discrepancy is reportedly even higher between Mums and Dads. Between lower wages and a higher likelihood of having an interrupted working life for women, women also tend to live longer and thus require more super to cover more years. Unfortunately, between personal finances, business financial capabilities, and governmental policies, actions to close this gap can be limited.

Where viable, private companies can consider: