The 12-month work test exemption gives new retirees with a low superannuation balance the chance to enjoy a better lifestyle.
Living off a low super account balance in retirement can be a daunting prospect. It’s one that baby boomers dread, having entered the workforce long before compulsory super was introduced. Many are far short of the $640,000 a couple are estimated to need for a comfortable retirement.
It is something the federal government is trying to address with the work test exemption for recent retirees. Announced in the 2018-19 budget, the measure comes into effect this month.
Under the old rules once you turned 65 you had to meet the work test to make super contributions. You had to work at least 40 hours in 30 consecutive days during the financial year in which contributions are made. But new retirees won’t need to meet this test.
From the start of this financial year – July 1, 2019 – people aged 65-74 with a total super balance of less than $300,000 will be able to make voluntary contributions to super for one more year after they stop work despite not working.
Glen McCrea, deputy CEO, and chief policy officer of the Association of Superannuation Funds of Australia (ASFA) say it’s a positive measure given the median super balance for people aged 65-74 is only about $170,000.
This story is from the July 2019 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the July 2019 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.
