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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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Consolidating your super

October 22, 2020

Consolidating your super can save you time and money. Consolidating your super means that rather than having multiple different accounts, all your super is in one account.

Why you should consolidate your super:

Before you consolidate your super:

Don’t simply choose the account with the highest balance. Rather, take into consideration the performance of that super fund, the fees you are required to pay, whether it is linked to any insurance and any other factors. Upon reviewing this, you may find that rather than choosing between your current super funds, starting with a completely new fund might be the best way to go.

How to consolidate to one of your current super funds:

Transferring to a new fund

In the case you decide that transferring to a new fund is the best option, you can consolidate either by contacting the new fund directly, or using an ATO rollover form.