Amanda Hardy Lai, Author at Retirement Essentials

Key changes ahead for 2025: What you need to know

by Amanda Hardy Lai | Centrelink Age Pension, Superannuation

As 2025 arrives, there are several significant changes coming that could affect your retirement planning and superannuation strategy. Understanding exactly what these changes mean in your particular situation helps you stay ahead.

1. Super Guarantee rate increases to 12% (starting 1 July 2025)

The Super Guarantee (SG) rate will increase to 12% on 1 July 2025, meaning employers will contribute more to your superannuation. This change will increase your retirement savings, especially if you are still working or nearing retirement.

Before (11.5% SG Rate): Annual salary of $60,000, with employer’s super contribution of $6,900 (11.5% of $60,000) per annum.

After (12% SG Rate): Annual salary of $60,000, with employer’s super contribution of $7,200 (12% of $60,000) per annum.

The increase of 0.5% will add an extra $300 to the superannuation contribution annually.

2. Legacy Pensions: New flexibility for older income streams

From 7 December 2024, holders of legacy pensions (those started before 20 September 2007) will have five years to commute their pension to a more flexible Account-Based pension (ABP), accumulation account, or cash. This will give retirees with older pension products more flexibility to adjust their arrangements to meet current needs.

Learn more about this change.

3. Government-funded parental leave

From 1 July 2025, superannuation will be paid on government-funded Parental Leave Pay, with contributions calculated at 12% of the payment. Eligible parents will receive these contributions as a lump sum, including interest, after the financial year ends.

Applications for Parental Leave Pay will remain with Services Australia, while the ATO will manage super payments starting July 2026. This change aims to boost retirement savings for parents and is part of the government’s Working for Women strategy.

When was the last time you reviewed your financial plan?

by Amanda Hardy Lai | Retirement Advice

Do you need to reconsider your financial approach based on changes?

Some life events make it obvious that it’s time to revisit your finances – being made redundant, receiving an inheritance, or a major health event. But smaller, less noticeable changes can also have a significant impact. These might be fluctuations in your super balance or changes to government rules about superannuation, pensions or tax.

You may also have missed reading your 2024 superannuation member statement, especially since these often arrive months after the end of the financial year. By the time they land in your inbox, it’s the holiday season, and reorganising your money situation is often pushed down the to-do list.

The thing is, we have competing claims on our attention and time; we may have conflicting schedules with our financial partners or end-of-year burnout. It’s easy to procrastinate, or maybe we are eager to dive into a review, but don’t have all the information we need to make an informed decision.

The short answer to ‘Do I need to reconsider my financial approach?’ is yes!. Financial changes – big or small – happen constantly, and reviewing your plan each year ensures you’re adapting to the current economic environment, market conditions and ever-evolving rules relevant to superannuation, pensions and taxes.

Gifting gone wrong: Avoiding the ghosts of bad decisions

by Amanda Hardy Lai | Retirement Advice

We can all get a dopamine hit from choosing the perfect gift, knowing the happiness it can spark. But in the realm of financial planning, not every act of generosity comes without strings. Without careful thought, well-meaning gifts can backfire, leaving consequences that linger like the ghosts of Christmas past – haunting your retirement plans and even your eligibility for government support.

Whether it’s helping family, celebrating milestones, or giving to charity, it’s important to understand the implications of gifting—especially if you’re receiving or applying for Age Pension or other social security benefits. Gifting rules exist to ensure that assets or income aren’t simply given away to boost entitlements. Let’s take a closer look at how gifting can go wrong and ways to steer clear of potential pitfalls to ensure your generosity aligns with your financial goals.