Newsletter - September 2020 Edition 1

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Cents & Sensibility | Tax News | Views | Clues 

 

10 September

Making sense of it all by Ali Roshan - 3 easy strategies to continue building your retirement savings

 

The Coronavirus Pandemic has caused significant emotional and physical turmoil for many people around the world.  A positive that has come out of this crisis is that it has encouraged people to think about their financial goals and objectives.  I have noticed that there has been a higher level of engagement from clients regarding their super and retirement plans as a result.   

Below I present 3 easy strategies that could be considered under our current climate to continue building your retirement savings: 

 

1. Know what you need to retire comfortably. 

As your adviser, I will work with you to determine what you need in savings to live the retirement you envision.  

 

2. Contribute a little and often to your super.  

You don’t need to contribute large amounts to make an impact.  You can make small contributions which can make a huge difference once you retire.  If there is a little extra leftover at the end of the month contribute a small amount to your fund.  You may also consider putting a little of your tax return away. 

 

3. Check if you are eligible for government support. 

If your financial circumstances have changed you might now qualify for a lower income tax offset.   

 

If you would like to further discuss either your retirement objectives or even to discuss how best to manage your financial wellbeing please feel free to contact me for a free, no obligation initial discussion. 

 

Ali Roshan is an Authorised Representative (ASIC No. 000378611) of Lifespan Financial Planning

 

ABN 23 005 921 735 AFSL Number 229892

 

No Advice Warning / General Advice

 

The purpose of this article is to provide general information only and the contents of this website do not purport to provide personal financial advice. knp Solutions strongly recommends that investors consult a financial adviser prior to making any investment decision.

 

The contents of this knp Solutions article does not take into account the investment objectives, financial situation or particular needs of any person and should not be used as the basis for making any financial or other decisions.

 

The information is selective and may not be complete or accurate for your purposes and should not be construed as a recommendation to invest in any particular product, investment or security. The information provided on this website is given in good faith and is believed to be accurate at the time of compilation.

Superannuation guarantee rate increase update

 

Recently, arguments both for and against increasing the rate of compulsory superannuation guarantee ('SG') have continued to be tossed around!

 

The SG is the compulsory amount of superannuation an employer must pay into an eligible employee’s chosen super fund.

 

The rate of SG has been frozen at 9.5% of an employee’s ordinary wages since July 2014, but from 1 July 2021 it is due to incrementally increase (by 0.5% each financial year) until it ultimately reaches 12% in July 2025

 

As a result, the superannuation guarantee rate is currently set to increase to 10% from 1 July 2021.

 

Note: At this stage, despite a lot of political rhetoric and media coverage, no change has been announced to change these set plans.

Superannuation guarantee amnesty ends 7 September 2020

 

Speaking of the superannuation guarantee, time is rapidly running out for employers to apply for the SG amnesty and catch up on past unpaid super without incurring a penalty.

 

The ATO encourages employers to apply for the amnesty and make payments as early as they can. 

 

Importantly, eligible amnesty amounts paid by 7 September 2020 are tax deductible!

 

The ATO must receive amnesty applications by 11:59 pm (local time) on 7 September 2020

 

Broadly, to be eligible for the amnesty:

  • the unpaid super must be for a quarter between 1 July 1992 and 31 March 2018;
  • the shortfall cannot have already been disclosed to the ATO; and
  • the ATO cannot already be examining the shortfall.

 

If an employer cannot pay in full, the ATO will work with them to set up a flexible payment plan.

 

Superannuation guarantee payments and PRNs

Applicants will need their payment reference number (‘PRN’) to make SG amnesty payments. 

 

The ATO has been sending employers their PRN within 14 business days of receiving their application, however, if an amnesty application has not been lodged by mid-August, they can get their PRN:

  • from a super guarantee charge related statement issued for the same Australian Business Number; or
  • by phoning the ATO on 1800 815 886 between 8.00am and 6.00pm from Monday to Friday.

 

Note: If you wish to discuss the implications of the SG amnesty and any related payment plans (or indeed anything else with respect to SG obligations and liabilities) please contact our office to discuss.

 

Ref: SG amnesty ends 7 September 2020, ATO website, August 3 2020