Quill is a financial services business with a team of passionate professionals who are committed to working with family businesses, working families and retired families.
Why holding too much cash could burn a hole in your investment returns.
Monthly data just released by the Australian Prudential Regulation Authority (APRA) shows households across the nation are now holding record levels of cash.
APRA’s data shows the amount of cash held in authorised deposit-taking institutions (ADI) such as banks and credit unions rose to $1.65 trillion by the end of August from the $1.57 trillion at the end of 2024 – an increase of $80 billion, or 5.10%, over just eight months.
Although the growth rate has not been quite as pronounced, the amount of cash being held by self managed superannuation funds has also been growing steadily this year, reaching a record $170.6 billion at the end of June from $168.8 billion at the end of 2024, according to Australian Tax Office data.
And, according to separate data from the Reserve Bank of Australia, the weighted average interest rate being paid on all term deposits up to $10,000 was 2.85% per annum at the end of August – which compares with 3.35% at the end of last year.
The same RBA data shows the weighted average rates paid on term deposits has been 1.89% since the start of 2020.
How safe is cash?
In Australia, as in many countries, cash is often viewed as a safe and reliable way to store wealth.
The Financial Claims Scheme (FCS), administered by APRA, is an Australian Government scheme that provides up to $250,000 in protection per deposit account holder with an Australian ADI in the event the financial institution fails.
That protection is important however, when it comes to investing for long-term growth, cash has delivered lower returns than other asset classes over time.
This is illustrated in the recently released 2025 Vanguard Index Chart, which shows cash returned an average of 4.1% per annum over the 30 years from July 1, 1995 to June 30, 2025 – the lowest return among all major asset classes.
This compared with an average annual return of 10.8% from U.S. shares, 9.3% from Australian shares, and 8.3% from international shares. Australian bonds returned an average of 5.5% per annum. Of course, it’s worth keeping in mind that past performance is not a reliable indicator of future results and markets can, and do, change from time to time.
The impact of inflation
One of the primary reasons cash is often considered a poor long-term investment is inflation. Inflation refers to the general increase in prices over time, which erodes the purchasing power of money.
For example, if you keep $10,000 in a savings account earning less than 2% and inflation runs at 3% per year, your money will buy less in the future than it does today. While your account balance remains the same, its real value decreases.
Opportunity cost
Holding cash can mean missing out on potential gains from other investments. This is known as opportunity cost.
Money kept in cash could be invested elsewhere, potentially earning higher returns. Over time the difference in growth can be significant, especially when compounding is taken into account.
Not suitable for long-term goals
While cash is useful for short-term needs and emergencies, it is not ideal for long-term financial goals such as retirement or saving to buy a home.
Investments that offer growth may be better suited for these objectives because they have the potential to outpace inflation and increase in value over time.
When cash makes sense
Despite its drawbacks, cash can play an important role in a diversified portfolio. It can provide liquidity for living costs and unexpected expenses, act as a buffer during market downturns, and help manage risk.
While it’s important to keep some cash on hand, investors should also consider other asset classes to achieve their financial goals and protect their purchasing power.
The income road ahead for many people needing to generate income from their savings may become increasingly challenging as interest rates continue to fall.
Source: October 2025
This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™
Superannuation tax rules are changing again and there are implications for those with very large balances as well as those on lower incomes.
In a nutshell, the new plans include:
- more targeted tax rules for people with very large super balances
- extra support for low-income earners who contribute to super
- indexation (automatic increases) to make sure the tax thresholds keep up with inflation
- the removal of the proposed tax on unrealised gains
The new super tax rules will begin on 1 July 2026 and will be based on your total super balance as at 30 June 2027.
The changes follow feedback from industry groups, financial experts, and the public. Treasurer Jim Chalmers said the updates are designed to make the system fairer while still meeting the government’s goals.i
New rules for higher balances
If your total super balance (TSB) is more than $3 million, you’ll be affected by new tax rates on earnings.
Here’s how it works:
- for balances between $3 million and $10 million, earnings will be taxed at 30 per cent instead of the usual 15 per cent for the proportion of earnings between the thresholds
- for balances over $10 million, a tax of 40 per cent will apply on the proportion of earnings over the threshold
These are still concessional rates, meaning they’re lower than the top personal income tax rate, but they’re higher than the standard super tax rate.
The thresholds will be indexed over time. The $3 million threshold will increase in steps of $150,000 while the $10 million threshold will increase by $500,000 each time.
This means fewer people will be affected in the future as the thresholds rise with inflation.
Only a small number of Australians will be affected by the new rules. Less than 0.5 per cent of super account holders are expected to have balances exceeding $3 million in the 2026-27 financial year. The $10 million rule is expected to apply to fewer than 8,000 accounts, less than 0.1 per cent of all super accounts.ii
If you’re affected, you can choose to pay the tax from your super account or from funds outside of super.
No tax on unrealised gains
One of the most controversial parts of the original proposal was a tax on unrealised gains, meaning increases in the value of assets that haven’t been sold yet (such as property or shares).
This idea has now been dropped.
Instead, the new tax will only apply to realised gains (actual earnings such as interest, dividends or profits from selling assets).
Extra top-up for low income earners
The government is increasing support for low-income earners through the Low Income Superannuation Tax Offset (LISTO).iii
LISTO is a 15 per cent tax offset paid by the government into the super accounts of people earning up to $37,000 a year and is worth up to a maximum of $500.
From 1 July 2027, the current LISTO income threshold will increase to $45,000 to match the top of the second income tax bracket. Around 3.1 million Australians will then be eligible for LISTO.
The maximum government top-up payment will also be increased from $500 to $810 to account for the recent increase in the Superannuation Guarantee (SG) rate to 12 per cent.
Special rules for defined benefits funds
Some judges and politicians are members of defined benefit super funds, which work differently from regular super accounts.iv
Because it’s harder to calculate earnings in these funds, the government will develop equivalent arrangements to apply the new tax fairly.
We’re here to help you understand how the changes may affect your super and your long-term financial goals, so please give us a call.
i Reforms to support low-income workers and build a stronger super system | Treasury Ministers
iii Low Income Superannuation Tax Offset | Treasury.gov.au
Sweeping reforms to aged care are set to begin on 1 November to help improve the quality, transparency and flexibility of care.
With more care levels, clearer pricing, and greater control over how your funding is used, the new system aims to better match services to individual needs. Providers will be required to offer detailed cost breakdowns, empowering you to make informed decisions about your care.
While the reforms are a step forward in care quality, they also come with changes in how services are funded and that may mean higher out-of-pocket costs for some.
What you pay depends on your financial situation – whether you receive a full or part pension or are self-funded – and the services you access.
As the aged care landscape evolves, staying informed is key to making confident choices. Whether you’re planning for yourself or supporting a loved one, understanding the new system will help you access the right care at the right time.
Help at home
From 1 November the current Home Care Packages will be replaced by a new program called Support at Home.
The key changes include:
- Eight levels of care (up from four) to better match individual needs
- Extra funding for assistive technology, home modifications and palliative care
Services are expected to remain the same but the way you pay for them may change.
- For example, clinical care (such as nursing or physiotherapy) will be fully funded by the Government.
- You may pay more for everyday living services (such as meal preparation or cleaning) than you do for independence supports (like personal care or transport).
- The out-of-pocket costs for everyday living will range from 17.5 per cent for full pensioners to 80 per cent for self-funded retirees.
- Non-clinical support, like showering, will cost five per cent for full pensioners to 50 per cent for self-funded retirees.
If you were approved for a Home Care Package on or before 12 September 2024, you will be eligible for fee concessions to ensure you are not worse off under the new rules.
The package level you are assigned sets the total funding available to pay for care, with 10 per cent allocated to the care provider to cover the cost of care management.
You then work with your provider to decide how you want to spend the rest of the budget. The provider will set their fees for services and you will make a contribution based on your income.
Residential aged care
Room prices in aged care facilities have been steadily rising following an increase in the Refundable Accommodation Deposit (RAD) threshold from $550,000 to $750,000.
Higher RADs mean you may need to use more of your savings or income to cover aged care costs.
From 1 November 2025, anyone who moves into care after this date and pays a RAD, will have two per cent of that amount deducted each year, for up to five years.
You can still opt to pay a Daily Accommodation Payment (DAP), but this will increase every six months in line with inflation.
Other fees include:
- the basic daily fee (set at 85 per cent of the single age pension)
- a means-tested fee or non-clinical care contribution
- potentially a higher everyday living fee (previously known as extra or additional services)
Fee caps and planning ahead
The lifetime cap on aged care contributions continues. You won’t pay more than $130,000 (indexed) over your lifetime towards home care and residential care combined.
Understanding how the changes affect your financial future is vital. You’ll need to consider:
- whether someone will remain in the family home
- your current income and assets
- potential age pension entitlements
- estate planning strategies
Use the government’s fee estimator at MyAgedCare to get a clearer picture of your potential costs.
Get advice early
Navigating aged care can be complex and the upcoming changes add new layers of decision-making.
We can help explain your options, structure your assets, minimise fees and plan for your future care needs.
If you would like to discuss your aged care options, please give us a call.
The government has announced some key changes to the proposed Division 296 super tax following industry feedback.
The tax will now only apply to realised investment earnings — that is, actual profits when an asset is sold — rather than unrealised gains on paper.
It will still apply to super balances over $3 million, with those earnings taxed at 30%, but there will now be a second tier for balances over $10 million, where earnings will be taxed at 40%.
Both thresholds will be indexed to keep pace with inflation, and the new rules are set to start from 1 July 2026, with the first tax assessments expected in 2028.
Treasurer Jim Chalmers said the changes are designed to make the system fairer while maintaining generous tax concessions for the vast majority of super fund members.
In a world of constant financial noise, from market updates and interest rate speculation to economic forecasts, it’s easy to feel overwhelmed and choose to do nothing.
But inaction can be costly when it comes to building long-term wealth. Whether it’s leaving money in cash, delaying investment decisions or ignoring the power of regular contributions, the financial consequences of sitting still can quietly erode your future goals.
Inflation is a wealth killer
One of the most overlooked risks of doing nothing is inflation. While your money might feel ‘safe’ sitting in a savings account or term deposit, its purchasing power is shrinking every year.
For example, if you’d tucked $10,000 under the mattress in 2014, ten years later in 2024 it was worth just $6926.70 in real terms, thanks to the average annual inflation rate of 2.7 per cent. That’s a 30.7 per cent loss in value without spending a cent.i
Even in low-inflation environments, the real return on cash is often negative once you factor in tax and inflation.
The ‘cost’ of cash
Holding too much cash for too long can be a drag on your portfolio’s performance. While cash plays an important role, it’s not designed for long-term growth.
Consider this:
- Over the past 30 years, Australian shares have returned an average of 9.3 per cent per year, while cash has returned 4.1 per cent annually.ii
- That difference compounds significantly over time. Based on those rates, $100,000 invested in shares could grow to approximately $1.4 million in 30 years, while the same amount in cash might only reach around $330,000.
By staying in cash, investors miss out on the growth potential of other asset classes.
The perils of ‘set and forget’
Many investors start out with good intentions. They set up a portfolio, make an initial contribution and then leave it untouched for years.
While long-term investing is a sound strategy, neglecting your portfolio entirely can lead to missed opportunities.
Here’s what you need to be aware of:
- Asset allocation changes – Market movements over time can affect your portfolio’s intended risk profile.
- Dividends – If dividends are paid out and not reinvested, you lose the benefit of the compounding effect.
- Changing goals – Your financial needs are likely to change as you age, but your portfolio won’t reflect that unless it’s reviewed.
Annual check-ups can help ensure your investments are still working for you.
Missed opportunities
Compound interest is one of the most powerful tools in wealth creation. But compounding works best if you’re consistently contributing and reinvesting.
Consider two hypothetical investors who both invest $10,000 earning an average 7 per cent per annum:
- Investor A contributes an extra $5,000 each year
- Investor B contributes nothing after the initial $10,000 investment
After 30 years (and not accounting for fees and other costs):
- Investor A may end up with more than $500,000
- Investor B may end up with around $76,000
The difference? Regular contributions and the magic of compounding.
You can do your own calculations with ASIC’s MoneySmart calculator.
From passive wealth to active growth
The cost of doing nothing can be even more pronounced for high-net-worth investors. With larger sums at play, the opportunity cost of holding excess cash or delaying strategic investment decisions can translate into millions of dollars in missed growth over time.
While capital preservation is important, so is capital productivity. Allocating funds across diversified asset classes can help balance risk while enhancing long-term returns.
Inaction, especially in times of market uncertainty, may feel prudent, but it often results in underutilised capital that fails to keep pace with inflation or evolving financial goals.
After all, your financial plan should evolve with you. A portfolio designed five years ago may no longer suit your goals, risk tolerance or tax situation. Life changes – marriage, children, career shifts, retirement planning – and your investments should reflect those changes.
The bottom line
Doing nothing might feel safe but it’s often the riskiest choice of all. Inflation erodes your savings; cash underperforms over time and missed opportunities can delay or derail your financial goals.
By taking small, consistent steps such as contributing regularly, reinvesting earnings and reviewing your plan regularly, you can build a strong foundation for long-term financial success.
We’re here to help you take control and make your money work harder for your future.
What You Can Do!
Leaving debts outstanding with the ATO is now more expensive for many taxpayers.
General interest charge (GIC) and shortfall interest charge (SIC) imposed by the ATO is no longer tax-deductible from 1 July 2025. This applies regardless of whether the underlying tax debt relates to past or future income years.
With GIC currently at 11.17%, this is now one of the most expensive forms of finance in the market — and unlike in the past, you won’t get a deduction to offset the cost. For many taxpayers, this makes relying on an ATO payment plan a costly strategy.
Refinancing ATO debt
Businesses can sometimes refinance tax debts with a bank or other lender. Unlike GIC and SIC amounts, interest on these loans might be deductible for tax purposes, provided the borrowing is connected to business activities.
While tax debts will sometimes relate to income tax or CGT liabilities, remember that interest could also be deductible where money is borrowed to pay other tax debts relating to a business, such as:
- GST
- PAYG instalments
- PAYG withholding for employees
- FBT
However, before taking any action to refinance ATO debt it is important to carefully consider whether you will be able to deduct the interest expenses or not.
Individuals
If you are an individual with a tax debt, the treatment of interest expenses incurred on a loan used to pay that tax debt really depends on the extent to which the tax debt arose from a business activity:
- Sole traders: If you are genuinely carrying on a business, interest on borrowings used to pay tax debts from that business is generally deductible.
- Employees or investors: If your tax debt relates to salary, wages, rental income, dividends, or other investment income, the interest is not deductible. Refinancing may still reduce overall interest costs depending on the interest rate on the new loan, but it won’t generate a tax deduction.
Example: Sam is a sole trader who runs a café. He borrows $30,000 to pay his tax debt, which arose entirely from his café profits. The interest should be fully deductible.
However, if Sam also earns salary or wages from a part-time job and some of his tax debt relates to the employment income, only a portion of the interest on the loan used to pay the tax debt would be deductible. If $20,000 of the tax debt relates to his business and $10,000 relates to employment activities, then only 2/3rds of the interest expenses would be deductible.
Companies and trusts
If a company or trust borrows to pay its own tax debts (income tax, GST, PAYG withholding, FBT), the interest will usually be deductible if it can be traced back to a debt that arose from carrying on a business.
However, if a director or beneficiary borrows money personally to cover those debts, the interest would not normally be deductible to them.
Partnerships
The position is more complex when it comes to partnership arrangements. If the borrowing is at the partnership level and it relates to a tax debt that arose from a business carried on by the partnership then the interest should normally be deductible. For example, this could include interest on money borrowed to pay business tax obligations such as GST or PAYG withholding amounts.
However, the ATO takes the view that if an individual who is a partner in a partnership borrows money personally to pay a tax debt relating to their share of the profits of the partnership, the interest isn’t deductible. The ATO treats this as a personal expense, even if the partnership is carrying on a business activity.
Practical takeaway
Leaving debts outstanding with the ATO is now more expensive than ever because GIC and SIC are no longer deductible.
Refinancing the tax debt with an external lender might provide you with a tax deduction and might also enable you to access lower interest rates.
The key is to distinguish between tax debts that relate to a business activity and other tax debts. For mixed situations, you may need to apportion the deduction.
If you’re unsure how this applies to you, talk to us before arranging finance. With the right strategy, you can manage tax debts more effectively and avoid costly surprises.
Understand the latest indexed changes to the pension income and assets tests
Receiving the full government Age Pension, or even a partial pension payment, can provide eligible retirees with a significant amount of income over time that can supplement income earned from other assets.
Millions of Australians are eligible to receive Age Pension payments every fortnight once they turn 67.
But there are strict limits on how much individuals and couples can earn, and on the value of assets that can be held, which the government uses to determine eligibility.
While there were no changes to the fortnightly Age Pension payment rates themselves on 1 July, the start of the 2025-26 financial year saw some indexed increases to both the income and assets test limits used by the government to determine eligibility for the pension.
For example, individuals can now earn to $218 per fortnight (a $6 increase) and couples up to $380 per fortnight (an $8 increase) and still receive the full Age Pension.
Assets test limits have also increased for individuals and couples by between $7,500 and $17,500, depending on home ownership status.
For example, individual homeowners can now have up to $321,500 in assets in addition to the value of their home (an increase of $7,500) and still receive the full Age Pension. For couples who are homeowners, the total amount is now $481,500 (an increase of $11,500).
The asset test limits are higher for non-homeowners.
It’s important to know the Age Pension test limits. The following tables, sourced from the Department of Social Services, provide a detailed breakdown of the latest income test and assets test changes.
The income test
Individuals and couples can earn up to a set amount of income every fortnight in addition to the Age Pension to receive the maximum pension payment.
The pension amount received will then be reduced for every dollar of income earned above the maximum payment limit and will totally cut out at the government’s disqualifying income limit.
What the income test limits are for a full pension
Single person
| Income per fortnight | Amount your pension will reduce by |
|---|---|
| Up to $218 (free area) | $0 |
| Over $218 | 50 cents for each dollar over $218 |
Couple living together or apart due to ill health
Different rates apply for partners getting a payment other than a pension.
| Combined income per fortnight | Amount each member of the couple’s pension will reduce by |
|---|---|
| Up to $380 (free area) | $0 |
| Over $380 | 25 cents for each dollar over $380 |
What the cut-off points are
If your income in a fortnight goes over the cut-off point, the government will pay $0 for that fortnight.
Your cut-off point may be higher if you receive Rent Assistance or Work Bonus, or may be lower if you don’t live in Australia.
| Your situation | Fortnightly income cut off point |
|---|---|
| Single | $2,516.00 |
| A couple living together | $3,844.40 combined |
| A couple living apart due to ill health | $4,976.00 combined |
| A transitional rate pensioner – single | $2,580.00 |
| Transitional rate pensioners – couple living together | $4,191.50 combined |
| Transitional rate pensioners – couple living apart due to ill health | $5,104.00 combined |
The assets test
The government also applies the assets test (based on property or possessions owned in full, in part, and assets that an individual or couple have a financial interest in) to determine whether individuals and couples can qualify for full or part pension payments.
What the assets test limits are for a full pension
When your assets are more than the limit for your situation, your pension will reduce.
If you’re a member of a couple, the limit is for both you and your partner’s assets combined, not each of you.
| Your situation | Homeowner | Non-homeowner |
|---|---|---|
| Single | $321,500 | $579,500 |
| A couple, combined | $481,500 | $739,500 |
| A couple, separated due to illness, combined | $481,500 | $739,500 |
| A couple, one partner eligible, combined | $481,500 | $739,500 |
What the limits are for a part pension
From 1 July 2025, part pensions cancel when your assets are over the cut off point for your situation.
If you’re a member of a couple, the limit is for both your and your partner’s assets combined, not each of you.
| Your situation | Homeowner | Non-homeowner |
|---|---|---|
| Single | $704,500 | $962,500 |
| A couple, combined | $1,059,000 | $1,317,000 |
| A couple, separated due to illness, combined | $1,247,500 | $1,505,500 |
| A couple, one partner eligible, combined | $1,059,000 | $1,317,000 |
Conclusion
The Age Pension provides a fortnightly government payment that acts as a financial safety net. Even a part pension can help cover essential living costs like groceries, utilities, and healthcare, reducing the pressure on your superannuation or personal savings.
Many retirees draw income from superannuation, investments, or part-time work. The Age Pension can supplement these sources, helping to smooth out fluctuations in investment returns or market downturns.
The Age Pension is indexed and paid for life, offering protection against outliving your savings. This is especially valuable as people live longer and may need income support well into their 80s or 90s.
Combining the Age Pension with other income streams allows for greater flexibility in managing your finances.
You can draw less from your super during market downturns or use the pension to cover fixed costs, preserving your capital for discretionary spending or emergencies.
Source: Vanguard July 2025
This article has been reprinted with the permission of Vanguard Investments Australia Ltd. Copyright Smart Investing™
GENERAL ADVICE WARNING
Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) (VIA) is the product issuer and operator of Vanguard Personal Investor. Vanguard Super Pty Ltd (ABN 73 643 614 386 / AFS Licence 526270) (the Trustee) is the trustee and product issuer of Vanguard Super (ABN 27 923 449 966).
The Trustee has contracted with VIA to provide some services for Vanguard Super. Any general advice is provided by VIA. The Trustee and VIA are both wholly owned subsidiaries of The Vanguard Group, Inc (collectively, “Vanguard”).
We have not taken your or your clients’ objectives, financial situation or needs into account when preparing our website content so it may not be applicable to the particular situation you are considering. You should consider your objectives, financial situation or needs, and the disclosure documents for the product before making any investment decision. Before you make any financial decision regarding the product, you should seek professional advice from a suitably qualified adviser. A copy of the Target Market Determinations (TMD) for Vanguard’s financial products can be obtained on our website free of charge, which includes a description of who the financial product is appropriate for. You should refer to the TMD of the product before making any investment decisions. You can access our Investor Directed Portfolio Service (IDPS) Guide, Product Disclosure Statements (PDS), Prospectus and TMD at vanguard.com.au and Vanguard Super SaveSmart and TMD at vanguard.com.au/super or by calling 1300 655 101. Past performance information is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance. This website was prepared in good faith and we accept no liability for any errors or omissions.
Important Legal Notice – Offer not to persons outside Australia
The PDS, IDPS Guide or Prospectus does not constitute an offer or invitation in any jurisdiction other than in Australia. Applications from outside Australia will not be accepted. For the avoidance of doubt, these products are not intended to be sold to US Persons as defined under Regulation S of the US federal securities laws.
© 2025 Vanguard Investments Australia Ltd. All rights reserved.
The best time to start planning for retirement is yesterday.
But the second-best time? Today.
About two-thirds of Australians retire earlier than they anticipated because of unexpected events such as job loss or redundancy, they need to care for a family member, have a sudden illness or injury, problems at work or a partner’s decision to retire.i
But, whether you’re in your 50s, 60s, or even beyond, it’s never too late to take meaningful steps toward a more secure and fulfilling retirement.
The good news is that with the right guidance and a few smart moves, you can still build a retirement plan that reflects your values, supports your lifestyle and gives you peace of mind.
Where to begin
Before you make any changes, it’s important to understand your current financial position. This includes:
- your superannuation balance
- other savings or investments
- debts such as your mortgage, credit cards and personal loans
- expected retirement income sources including the Age Pension, rental income and part-time work
Boost your super
Even if you’re starting later, there are ways to accelerate your super growth using:
- Salary sacrifice Contributing pre-tax income into super can reduce your taxable income while boosting your retirement savings.
- Personal contributions You may be eligible for a tax deduction or government co-contribution depending on your income.
- Catch-up contributions You may be eligible to add to your super but be aware of the caps on contributions.ii
These strategies can be especially powerful in your 50s and 60s, when your income may be higher and retirement is on the horizon.
It’s also a good idea to regularly consider your super investment options and review your risk tolerance and time horizon.
Deal with debt
If possible, getting your debt under control before you retire is a useful strategy.
You could consider using your superannuation or other savings or downsize your home to pay off a mortgage or other loans. But first, it’s essential to carefully check the tax impact, the effect on your super and whether any potential government benefits will be affected.
Reassess your lifestyle goals
Retirement isn’t just about money, it’s about how and where you want to live, how much travel you’d like to do and if you’d continue to work part-time.
Clarifying your lifestyle goals helps shape your financial strategy. It also ensures your retirement plan reflects your values, not just your bank balance.
How much will I really need?
Aim to create a retirement budget. Estimate your future expenses including housing, food, travel and healthcare and compare them to your expected income. This helps identify any shortfalls and guides your savings strategy.
You will also need to consider the amount of time you might spend in retirement. This will depend on when you retire (planned or unexpected) and how long you live. This is called longevity risk. Given life expectancy is unpredictable, there is a possibility that your retirement savings may not last throughout retirement.
Understand your entitlements
Many Australians are eligible for government support in retirement, including:
- Age Pension Based on income and assets, available from age 67 (for those born after 1957).
- Concession cards For discounts on healthcare, transport and utilities.
- Rent assistance If you’re renting privately and receive the Age Pension.
Even if you don’t qualify now, you may be able to restructure your finances to maximise future entitlements.
Review regularly and remain flexible
Retirement planning isn’t a one-time event. Life changes and so should your strategy. Regular reviews help you:
- Adjust for market movements or legislative changes
- Update your goals and spending patterns
- Ensure your estate planning is current
Flexibility is key. Whether you retire gradually, take a sabbatical, or pivot to a new venture, your plan should evolve with you.
Next steps
Retirement planning is about taking the next step rather than chasing perfection. Whether you’re starting late or simply refining your strategy, every step you take now helps shape a more secure and meaningful future.
And remember that retirement isn’t an end point. It’s a new beginning even if you retire earlier than you anticipated. With the right plan in place, you can step into this next chapter with clarity, confidence and purpose.
We’d be happy to help you review your current retirement plan and identify any gaps in retirement goals and create a strategy should you need to retire earlier than expected.
ii Understanding concessional and non-concessional contributions | Australian Taxation Office
On 1 July 2025 the superannuation guarantee rate increased to 12% which is the final stage of a series of previously legislated increases. Employers currently need to make superannuation guarantee (SG) contributions for their employees by 28 days after the end of each quarter (28 October, 28 January, 28 April and 28 July). There is an extra day’s allowance when these dates fall on a public holiday.
To comply with these rules the contribution must be in the employee’s superannuation fund on or before this date, unless the employer is using the ATO small business superannuation clearing house (SBSCH).
The ATO has been applying considerable compliance resources in this space in recent years which can have an impact on both employees and employers.
Employers
To be eligible to claim a tax deduction on SG contributions the quarterly amount must be in the employee’s super account on or before the above quarterly due dates. The only exception to this is where the employer is using the ATO SBSCH. In that case a contribution is considered made provided it has been received by the SBSCH on or before the due date.
Employers using commercial clearing houses should be mindful of turnaround times. Commercial clearing houses collect and distribute employee contributions and may be linked to accounting / payroll software or provided by some superannuation platforms. Anecdotally it seems that turnaround times for some clearing houses could be up to 14 days, so it is recommended that employers allow sufficient time before the quarterly deadlines when processing their employee SG contributions.
If these deadlines are missed (yes even by a day!) that will trigger a superannuation guarantee charge (SGC) requirement which will result in a loss of the tax deduction and other penalties. The SGC requirements are outlined in the ATO link below:
The super guarantee charge | Australian Taxation Office
Employers do have the option to make SG payments more frequently than quarterly and this is something that employers will need to become used to if the proposed ‘payday’ superannuation reforms become law. This change is proposed to commence from 1 July 2026 and would require SG to be paid at the same frequency as salary or wages. There is some discussion on the payday super proposal at this link (noting that this is not yet law). The SBSCH will close at this time so employers using this service should start to consider transitioning to a commercial clearing house, please let us know you would like assistance with this.
Employees
It is recommended that you regularly check your superannuation fund statements and reconcile employer contributions to the amounts listed on your pay slips.
Where SG contributions are not received on time (or at all!) employees are encouraged to discuss this first with their employer. Should this not result in a satisfactory conclusion, employees can consider bringing this to the attention of the ATO.
There is some helpful discussion on this process at the following link.
The Productivity Commission (PC) has been tasked by the Australian Government to conduct an inquiry into creating a more dynamic and resilient economy. The PC was asked to identify priority reforms and develop actionable recommendations.
The PC has now released its interim report which presents some draft recommendations that are focused on two key areas:
- Corporate tax reform to spur business investment
- Where efficiencies could be made in the regulatory space (ie, cutting down on red tape)
The interim report makes some interesting observations and key features of the draft recommendations are summarised below.
Corporate tax reform
The PC notes that business investment has fallen notably over the past decade and that the corporate tax system has a significant part to play in addressing this. The PC is basically suggesting that the existing corporate tax system needs to be updated to move towards a more efficient mix of taxes. The first stage of this process would involve two linked components:
- Lower tax rate: businesses earning under $1 billion could have their tax rate reduced to 20%, with larger businesses still subject to a 30% rate.
- New cashflow tax: a net cashflow tax of 5% should be applied to company profits. Under this system, companies would be able to fully deduct capital expenditure in the year it is incurred, encouraging investment and helping to produce a more dynamic and resilient economy. However, the new tax is expected to create an increased tax burden for companies earning over $1 billion.
Cutting down on red tape
The interim report notes that businesses have reported spending more time on regulatory compliance – this probably doesn’t come as a surprise to most business owners who have been forced to deal with multiple layers of government regulation. Some real world examples include windfarm approvals taking up to nine years in NSW while starting a café in Brisbane could involve up to 31 separate regulatory steps.
The proposed fixes include:
- The Australian Government adopting a whole-of-government statement committing to new principles and processes to drive regulation that supports economic dynamism.
- Regulation should be scrutinised to ensure that its impact on growth and dynamism is more fully considered.
- Public servants should be subject to enhanced expectations, making them accountable for delivering growth, competition and innovation.
These are simply draft recommendations contained in an interim report so we are a long way from any of these recommendations being implemented. However, the interim report provides some insight into areas where the Government might look to make some changes to boost productivity in Australia.
The PC is inviting feedback up until 15 September on the interim report before finalising its recommendations later this year.
Sign Up To Receive Our Insights blog
"*" indicates required fields
©2026 Quill Group All Rights Reserved
Give yourself the peace of mind you deserve – today!
