The Federal Treasurer was accused of doing a backflip this week on his special tax on super-sized superannuation balances, but from where I sit, I reckon it was more like a half-twist.
The government is sticking with its proposal to tax the earnings on superannuation balances over $3 million at 30 per cent instead of the usual 15 per cent, but it’s now agreed to increase this threshold over time in line with the rising cost of living (among other changes).
This is a common sense move, because while there’s no question $3 million is a healthy super balance right now, when my kids hit 67 that kind of nest egg might be par for the course.
While this policy still isn’t even close to getting through parliament, what it is, is yet another fantastic reminder that your super balance isn’t just made up of money you and your employer chip in, but also money that your fund earns for you. So, what kind of returns should you be aiming for? Our latest research shows that of the My Super funds we looked into, the average fund has delivered a return of around 7 per cent a year across the last seven years. Not bad. But the highest performers are closer to 8 per cent and that seemingly small discrepancy can potentially make tens of thousands of dollars difference in retirement.
In other wallet wins, check out the credit cards that give you airport lounge access, just remember that glass of bubbles isn’t free but paid for in the card’s annual fee. For those not looking to leave the lounge, we’ve got the ultimate list of free streaming services–I’m always up for bingeing a few episodes of Fisk on ABC iView to get my dose of the Webmaster–and those that offer free trials you can channel surf without paying a cent.
Got a wallet win or burning question? Send it my way at sally@canstar.com.au
Catch you next week.
