What would it take to make you want to work again?
Higher wages? Manageable hours? Or a guarantee that your benefits and entitlements would not be jeopardised?
Or maybe all of the above?
In short, what would it take to lure you back into the workforce?
Recently released data shows that 28 Australians hold more than $100 million in super and 107 hold more than $50 million. These look like eye watering numbers, particularly when you realise that the earnings on these super accounts are taxed at the same level as for people with an ‘average’ balance of around $170,000.
These high balances have led to many calls to reduce the tax concessions on these accounts. We reported in March on the Federal Government’s intention to change how super is taxed. And earlier this month Treasurer Jim Chalmers presented draft legislation to do just that. If the legislation is passed the new tax will commence from 1 July 2025.
Recent research from financial services provider, AMP, reports that 70% of Australians do not know what an Account-Based Pension is. We doubt this is the case with Retirement Essentials members, but it was a handy reminder that the complexity of many aspects of retirement income is daunting for most.
So today we are sharing a very basic ‘Explainer’ of the who, what, why, when and how of Pension Funds. We are also sharing the latest comparison of performance between retirement and accumulation accounts, across different settings, to provide a useful benchmark for your own returns. We are indebted to Joshua Lowen at SuperRatings for his insights and assistance with this information.