17th June 2021

    AUTHOR: Sarah Bowrey

    From 1 July 2021, the Superannuation Guaranteed (SG) is increasing to 10%. SG is the minimum amount employers are required to pay into their eligible employees’ chosen superannuation fund. The percentage is controlled and legislated by the Australian Government.

    The goal of this increase, which is causing great debate, is to help meet the basic needs of Australian retirees in the future.

    It is said that increased savings for retirement will lead to  better outcomes both for the individual retiree (they will be have a increased retirement income) and also for society (decreased reliance on the age pension).

    Recent findings from the Retirement Income review show that without compulsory superannuation, our middle income earners would simply not save enough for retirement. Higher rates of compulsory superannuation will allow people to achieve retirement incomes that are closer to their pre-retirement income. That is, as the superannuation system matures, people will increasingly fund more of their own retirement.

    The SG percentage will rise a further 0.5% every year until 1 Jul 2025 when it will reach 12%.

    Irrespective of these increases, the Age Pension will continue to supplement the retirement income of a large proportion of Australians but it is hoped to a lessor degree.

     Also from 1 July this year, you will have the opportunity to contribute more money to your superannuation through changes to the contribution caps (noting that these caps do include any compulsory employer superannuation contributions made on your behalf).

     From 1 July 2021, the new contribution caps are:

    • Concessional contribution cap $27,500
    • Non-concessional contribution cap $110,000

    It is important to note that your ability to contribute to superannuation is based on a number of factors, including:

    • Your contributions made to date
    • Your total superannuation balance
    • Your age

    Contribution caps and SG can be complicated; we highly recommend speaking with a professional accountant if you are unsure of your personal caps or SG circumstances. PVW Partners does not hold an Australian Financial Services License and the above comments should not be considered to be financial product advice.


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