QuietGrowth Blog

Commentary on Superannuation Rates and Thresholds

Keep up to date with the latest rates and contribution limits.

1. Concessional contribution limits

Annual contribution limits for 2016/17 financial year:

Concessional contributions (before-tax)
Age 49 and over on 30 June 2016 $35,000
All others $30,000

2. Non-concessional contribution (after-tax) limits

The Government announced in the Federal Budget that from 7.30pm (AEST) on 3 May 2016, non-concessional (after-tax) contribution caps have been replaced with a $500,000 lifetime cap. This cap takes into account all after-tax contributions made since 1 July 2007. It applies to individuals aged up to 75 years.

Commentary on Australian Federal Budget 2016 – for Individuals

As part of the 2016 Federal Budget, Treasurer Scott Morrison presented the Government’s Superannuation Reform Package. The reforms centre on supporting the official objective of superannuation, “to provide income in retirement to substitute or supplement the Age Pension.

In his budget delivery speech, the Treasurer announced that the reforms are intended to improve the fairness of the superannuation system for women and lower income earners, while reducing the extent to which super is used by the wealthy for tax-minimisation or estate planning purposes.

According to the Treasurer:

  • 96% of people will be unaffected by changes to superannuation tax concessions for higher income earners
  • More than 4% of people will benefit from changes intended to improve the equity of the superannuation system for women and lower income earners.

How safe are my ETF assets?

How safe are my ETF assets

ETFs in Australia are regulated by the Australian Securities and Investments Commission (“ASIC”) as registered “managed investment schemes” (“MIS”) which means ETF issuers are governed by a detailed and strict set of regulations regarding the management of assets. To understand how safe ETF assets are, we need to understand the MIS rules – the laws which apply not only to ETFs but also to most traditional managed funds, and the fund’s constitution or governing rules.

Who owns the Assets in my ETF?

Who owns the Assets in my ETF?

All ETFs in Australia utilise a structure where each investor owns “units” which give an ownership share in the overall assets held by the fund. These ETF units are issued by a “unit trust”, which holds the assets of the fund on trust for investors. The structure used for ETFs is the same structure used by most traditional managed funds in Australia.

ETFs 101: Understanding ETF Bid and Offer Spreads

Understanding ETF Bid and Offer Spreads

Among the issues investors need to consider when buying and selling exchange traded funds (ETFs) are buy and sell spreads. Spreads are often seen as an unavoidable cost of trading and investing, and are not unique to ETFs per se.  What’s more, the competitive nature of open exchange markets – as well as the impact of dedicated market makers – help to ensure ETF bid-offer spreads are as tight as possible.

Using ETFs to generate efficient after-tax outcomes

Using ETFs to generate efficient after-tax outcomes

At this time of the year many investors and their advisers are focused on ensuring they implement the most tax efficient strategies in order to take advantage of any benefits or deductions before the end of the financial year. This post details an important but often underappreciated benefit that exchange traded funds (ETFs) can offer investors – tax efficiency. Tax-efficiency is, perhaps, a less visible benefit for investors, as, in the Australian financial market, fund manager performance is more often assessed on pre-tax returns, meaning investors may not be fully appreciative of this ETF related benefit.

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