The Basics of Super. Presented by: David Logan

Transcription

1 The Basics of Super Presented by: David Logan This information is issued by H.E.S.T. Australia Limited ABN AFSL No , Trustee of Health Employees Superannuation Trust Australia ( HESTA ) ABN It is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. This information contains H.E.S.T. Australia Ltd. s interpretation of the law but should not be relied upon as advice. HESTA Financial Planners are representatives of Industry Funds Financial Planning, a division of Industry Funds Services (IFS) ABN AFSL IFS are responsible for the advice given by its representatives. HESTA Superannuation Advisers and HESTA Superannuation Advice Officers are representatives of H.E.S.T. Australia Limited. For more information about HESTA call for a copy of our Product Disclosure Statements, which should be considered before making a decision about the Fund. Past performance is not a reliable indicator of future performance. Third-party services are provided by parties other than the Trustee and terms and conditions apply. Product ratings are only one factor to be considered when making a decision. See hesta.com.au/ratings for more information.

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7 What is Super?

8 Super basics Employer Total salary

9 Super basics Employer Total salary Take home pay

10 Super basics Employer Total salary Take home pay Super 9.5% of your gross pay

11 Delay to SG increase timetable The previous schedule was: Financial year Current SG rate (%) The new schedule is: Financial year SG rate (%)

12 Case Study Contribution decisions Jill, Tom & Sue Tom, Jill and Sue are all 25 years of age Each earn a gross salary of $45,000 p.a. (excluding 9.5%) $0 super balance See how different contribution decisions impact on their final super balances at age 67.

13 Case Study Extra contributions make a difference! Tom: makes no additional contribution to super

14 Case Study Extra contributions make a difference! Jill: contributes $20 extra a week from her take home pay over the next 42 years

15 Case Study Extra contributions make a difference! Sue: from age 45 she contributes $40 extra per week from her take home pay Assumptions: Investment earnings of 6.50% net per year and employment is constant until age 67. Assumes contributions are optimized to make the most of Co-contributions. Inflation of 2.5% per year, and figures are in today s dollars (i.e. the final value is discounted for inflation). Figures include SG contributions and the government co-contribution. Calculated at 01/07/2015. This example is an illustration only and is not guaranteed. Actual outcomes may differ. Investments may go up or down.

16 It s never too late or too early to start building your super

17 Investing with HESTA

18 Investing with HESTA Core Pool - Default Balanced option of moderate to high risk Four Ready-made Investment Pools Seven Your Choice Asset Classes

19 Risk vs return Private Equity Return International Shares Australian Shares Infrastructure Property Cash Global Bonds Risk

20 Core Pool asset allocation Strategic Asset Allocation Defensive 27% Growth 73%

21 Returns to 30 June 2015 Ready-Made Investment Options Since inception (% p.a.) 10 year (% p.a.) 5 year (% p.a.) 1 year return % Conservative Pool (1/7/95*) Core Pool (1/8/87*) Shares Plus (1/7/95*) Eco Pool (1/2/00*) Investments can go up and down. Past performance is not a reliable indicator of future performance. The returns shown are net of fees and taxes. *Refers to date of inception for the investment option.

22 Returns to 30 June 2015 Your Choice Investment Options Since inception (% p.a.) 10 year (% p.a.) 5 year (% p.a.) 1 year return % Cash (1/7/01*) Global Bonds (1/7/01*) Property (1/7/01*) Infrastructure (1/7/01*) International Shares (1/7/01*) Australian Shares (1/7/01*) Private Equity (1/7/01*) Investments can go up and down. Past performance is not a reliable indicator of future performance. The returns shown are net of fees and taxes. *Refers to date of inception for the investment option.

23 What is the Retirement age?

24 When can you access your super? Preservation age Date of birth Preservation age Before 1 July July June July June July June July June After 30 June

25 When can you access the Age Pension? The current schedule is: The proposed** new schedule is: People born between Eligibility age People born between Eligibility age Before 01/07/ /07/52 31/12/ /01/54 30/06/ /07/55 31/12/ /12/56 and later 67 Before 01/07/ /07/52 31/12/ /01/54 30/06/ /07/55 31/12/ /01/57 30/06/ /07/58 31/12/ * 01/01/60 30/06/61 68* 01/07/61 31/12/ * 01/01/63 30/06/64 69* 01/07/64 31/12/ * *Changes proposed in the 2014/15 Federal Budget. **Source : 2014 Strategy Steps Pty Ltd 01/01/66 and later 70*

26 You have two ways to top up Before-tax or After-tax

27 Tax thresholds Income range $ (from 01/07/2013) Tax rate % 0-18, ,201-37, ,001-80, , , , The above rates do not include the Medicare levy or the Temporary Budget Repair Levy. The Temporary Budget Repair Levy is payable at a rate of 2% for taxable incomes over $180,000.

28 1. Contributions from your before-tax pay How much can I contribute? Age* Maximum before-tax earnings you can contribute to super Under 49 $30,000** 49 or over $35,000** * Individuals age at 30 June ** Includes contributions your employer makes on your behalf. This is the concessional contributions cap.

29 2. Contributions from your after-tax pay Do you earn less than $50,000? After-tax Government co-contribution

30 1. 2. Contributions from from your your after-tax pay after-tax pay How much free super from the government could you get? Total income for the financial year (2015/16) After-tax contribution required Maximum government co-contribution $35,454 $1,000 $500 $38,000 $830 $415 $42,000 $564 $282 $46,000 $296 $148 $50,454 $0 $0

31 What is your biggest asset?

32 You!

33 Your health!

34 Insurance through HESTA

35 Income Protection (IP) Cover Can provide monthly income to help pay expenses if you are off work due to illness or injury.

36 Income Protection (IP) Cover Can provide monthly income to help pay expenses if you are off work due to illness or injury. Death Cover Can provide a lump-sum to your estate or dependents if you die before 75.

37 Income Protection (IP) Cover Can provide monthly income to help pay expenses if you are off work due to illness or injury. Death Cover Can provide a lump-sum to your estate or dependents if you die before 75. Lump-sum Total & Permanent Disability (TPD) Cover Can provide a lump-sum payment if you re permanently unable to work before 70.

38 Default cover for new members Income Protection Cover 2 units Death Cover 2 units $850 per month benefit to age 67 $6.30 gross per week ($5.36 net) * Conditions apply. Refer to HESTA Insurance Options for details of who is eligible for default cover. Insurance cover is subject to acceptance by HESTA s insurer. Most members pay the net insurance fee, which is up to 15% less than the gross cost. This is because HESTA is able to claim a tax deduction or the cost of providing insurance, which we pass on to members, resulting in a lower net insurance fee.

39 Why insure yourself? You are your biggest asset. Insurance can help you: Maintain your Protect your Pay your bills Enable your lifestyle other assets and expenses if family to you can t work continue on

40 Death Cover Insured amount paid to your beneficiaries if you die (in addition to your super account balance) Age at death Death benefit for each unit Death benefit for 2 units (Default cover) Up to 39 $85,000 $170, $84,000 $168, $54,750 $109, $38,400 $ 76, $25,200 $ 50, $17,100 $ 34, $ 8,700 $ 17, $ 4,200 $ 8,400 Members can have their Death Cover paid out in advance if diagnosed with a terminal illness.* *Terminal illness has a specific meaning and is a defined term in the insurance policy document; see Insurance Options for more information.

41 Why Income Protection Cover? Amount paid to you if you have to stop work because of illness or injury Annual income Units required to insure 85% of annual income Maximum monthly amount payable* $12,000 2 (basic cover) $850 $18,000 3 $1,275 $24,000 4 $1,700 $30,000 5 $2,125 $36,000 6 $2,550 $60, $4,250 *Benefit is limited to 85% of pre-disability before-tax salary. Offsets may apply. Subject to the insurer s terms and conditions see Insurance Options Guide available at hesta.com.au/pds for more information.

42 Lost track of your super? * hesta.com.au/superfinder * Prior to consolidating your various super funds you should enquire if you will encounter any exit fees or loss of benefits (e.g. insurance)

43 Convenience update online hesta.com.au/insure Additional cover is subject to eligibility and acceptance by our insurer.

44 More people in health and community services choose HESTA for their super