Ben should invest in an ETF outside super and when it grows wind back his working hours to be with his family, using the supplementary income from ETF to live well in advance of retirement.
Dont forget the ultimate income from super is tax free. 15 percent in, instead of 45 (or top marginal rate), 15 percent along the way, instead of 45, then tax free withdrawal post 60, instead of usual income tax rates. Think it makes a a huge difference. Even if looking at conventional fire, you just need to plug the gap from your fire age to 60. Worth pointing out most FIRE aspirants keep earning anyway.... but we all get old eventually, and can get the benefits of super when we do. That's my thinking. ETFs for normal FIRE planning hardly add up income wise - save a million, but live on 40k - the tax benefits of super even things up a bit.
Super tax on contributions for high income earners is 30%. It’s called division 293 tax, triggers at $250k total package (including super). Most won’t even know about it until they reach that level and the ATO sends a bill for an additional 15% of all of their super contributions that year. There’s also a max contribution that companies have to pay. This year it maxes out at $30k. So a surgeon on $600k only gets $30k super and pays 30% tax on it. Makes it difficult to make catch up contributions, as they’d have been on lower income through most of their 20s. While compounding, it’s 15% with a 33% CGT discount if CG on >12 months ownership. Tax on the way out depends on super balance. Ie: Same income drawn from super is taxed at different rates depending on super balance. Up to $1.9m is 0%, after that it’s 15% and from $3m super balance, it’s 30% now. Government didn’t get through their unrealised gains super tax, thankfully. Disappointing that this idea even made it into proposed legislation or is even being spoken about. Highlights the lack of financial understanding that politicians have.
Ben should invest in an ETF outside super and when it grows wind back his working hours to be with his family, using the supplementary income from ETF to live well in advance of retirement.
Dont forget the ultimate income from super is tax free. 15 percent in, instead of 45 (or top marginal rate), 15 percent along the way, instead of 45, then tax free withdrawal post 60, instead of usual income tax rates. Think it makes a a huge difference. Even if looking at conventional fire, you just need to plug the gap from your fire age to 60. Worth pointing out most FIRE aspirants keep earning anyway.... but we all get old eventually, and can get the benefits of super when we do. That's my thinking. ETFs for normal FIRE planning hardly add up income wise - save a million, but live on 40k - the tax benefits of super even things up a bit.
Super tax on contributions for high income earners is 30%. It’s called division 293 tax, triggers at $250k total package (including super). Most won’t even know about it until they reach that level and the ATO sends a bill for an additional 15% of all of their super contributions that year. There’s also a max contribution that companies have to pay. This year it maxes out at $30k. So a surgeon on $600k only gets $30k super and pays 30% tax on it. Makes it difficult to make catch up contributions, as they’d have been on lower income through most of their 20s.
While compounding, it’s 15% with a 33% CGT discount if CG on >12 months ownership. Tax on the way out depends on super balance. Ie: Same income drawn from super is taxed at different rates depending on super balance. Up to $1.9m is 0%, after that it’s 15% and from $3m super balance, it’s 30% now. Government didn’t get through their unrealised gains super tax, thankfully.
Disappointing that this idea even made it into proposed legislation or is even being spoken about. Highlights the lack of financial understanding that politicians have.