Young People and SMSFs

XB said:
This thread has more details and a link to the relevant publication
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Thanks - forgot about that thread, knew I had written about it somewhere.

There is a double whammy - to quote from that thread, "You can actually receive less superannuation overall by salary sacrificing, in addition to reducing your salary".

Employer counts your salary sacrifice towards the 9%, and the 9% gets calculated on the reduced salary after the salary sacrifice bit is deducted. This happened at a former workplace of mine (plus the employer was making contributions very late).

Key thing when salary sacrificing is to GET IN WRITING that your contribution is in addition to the employers current contribution, and that the employer's contribution is not calculated on the post-sacrifice earnings.
 
That is a huge trap for "young and old players".I have always had my super deal separate to base salary in all written agreements so I was never alive to this risk.

I still think that if you get the SS sorted in writing it's a great way to build the SMSF base early.Very helpful in buying PM if you are taking the long term view.

Lock and Load.
 
When we desire something that is more expensive than we can afford, usually the solution we are looking for is saving. But in this way we will be able to reach a certain amount, and then again and again we will need to save.
Rarely, some of us think of investing. Yes, the risk is greater, but also the result can be stunning. Of course, if we invest on the right place. :)
 
My daughter received her super paperwork last week. She's been working casual jobs here and there since leaving TAFE, but has mostly been in HostPlus. It was a 6 month statement.

Last statement showed she had about $1000 in HostPlus.

New statement showed she had "invested" approximately $1100 over the past 6 months.

That's easy, $1000 + $1100 = $2100. Doesn't it?

No sorry. Final balance is actually about $1900.

Deductions included:

Insurance $40 ( a good rate and one she could not match privately though I don't know what the benefits she receives are worth)
Admin fees paid: About $40 (mmm? Pay someone to help you have less than what you actually contribute?)
Government taxes: $170. <<<< Well at least if this industry fund collapses her super will be guaranteed. Won't it?

Earning rate over the last 6 months was 3.44%. Over the past year was 1%. Over the past 5 years = 0.15%.

Not much incentive to pay any extra into super is there?

Clarifies for me as well why the government would be keen to increase the super contribution to 12% as well.
 
yeah my industry superfund lost like 600 dollars or something for me including fees i think. im just glad to be finally out of it.
 
Have you started receiving your employer contributions into your account Fykus? How have you managed to deal with the PAYG 15% tax deductions - are they automatically deducted at some point or do you need to send it manually to the ATO under esuper's setup?

I'm interested in this field and after reading a lot written by the ATO and those who want to see SMSF spreadsheers, I'm keen to see how it all works in real applications.
 
Yeah im all set up and recieving my super into my smsf bank account now so its all good. Not sure on the payg thing though, id say itll have to be done manually at some stage though. Will have to look into that.
 
Thanks for replying Fykus. Glad to hear it seems to be working well. Now it is set up have you found the esuper documents worthwhile or in hindsight do you think you would have preferred to do the Declaration of Trust, ATO rollover etc, yourself?

Make sure you leave 15% of your employer contributions in your refular bank account and not all invested or you'll have hassles if the ATO want their tax at short notice.
 
yeah most of it is just in cash atm, waiting for the price of silver to drop a bit more. i think i also have to pay a few hundred dollars in feb to the government because its a company aswell. as for esuper it really did make it pretty much hassle free. they sent me the docs, i signed them and sent them back. the worst part was waiting for my super fund to actually transfer me the money. plus i got one of the deals where i didnt have to pay anything for them to set it up, plus i get next years audit for free or something like that. Only thing i had to pay for was the company registration.

Unsure of what it would of been like to do it all myself/through an accountant.
 
Fykus said:
Unsure of what it would of been like to do it all myself/through an accountant.
Click to expand...

Getting it done now...it's been a breeze...and surprisingly cheap (accountants have no idea how underpaid they are ;) )
 
Fykus said:
i think i also have to pay a few hundred dollars in feb to the government because its a company aswell.
Click to expand...

Is the only thing that your company does is act as trustee for your super fund? If so you can convert it to an SPV (special purpose vehicle) and you will only pay about $40ish per year for ASIC registration instead of $212 for a regular company.
 
yeah it is, i must be getting the idea of having to pay a few hundred mixed up with something else.
 
It's 230 for ASIC these days. The ATO levy (charged on the tax return of the trust/super fund) would be 180 (up from 150).

The ATO and ASIC need their money for important compliance works so I'm happy to pay. /sarcasm.
 
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